The simplest, but perhaps most significant, change was light. Before electrical lighting, people had candles and oil lamps, but they were not very effective. The amount of light they gave off was not sufficient for many tasks, and there was even less outdoor lighting.
Before electrical lighting was common, most people simply went to bed when it got dark. If they had oil lamps, they might stay up for an hour and do some reading or sewing, but the lamps were smelly and dangerous, and the oil cost money.
With the advent of electrical lighting, people could stay up long after the sunset, and there was enough light for all kinds of activities.
Of course, lighting was only one of the many changes which electrification brought to daily life. Dozens of electrical appliances for households quickly became common, once most homes had electricity. But how did this electrification occur? A report from Mercury Radio Arts explains that it all began when
In 1881, a young English clerk named Samuel Insull sailed from England to America and took a low-paying job as a private secretary for a determined inventor named Thomas Edison. Insull worked hard, coming in before his boss in the morning and staying until long after Edison, who wasn’t exactly lazy himself, had gone home at night.
Edison was one of the greatest and most prolific inventors in history. Samuel Insull had a job which would give him a better technical education than most universities. Insull realized that not only could he get paid for working with Edison, but more importantly, he could learn while working with Edison.
Over time, Insull’s hard work and loyalty did not go unnoticed. He was promoted several times, eventually winding up in charge of Edison’s business affairs.
Having a responsible management position in Edison’s company placed Insull in the center of technological development. The products which came from Edison’s workshops changed the world, and Insull got to see from the inside what a world-changing business looked like.
After twelve years absorbing as much knowledge as he could, Insull finally left to pursue his own American dream. He moved to Chicago, took out a personal loan for $250,000, and built the largest power plant in the world.
Samuel Insull took a huge risk. He had knowledge and experience, but he didn’t have much money. He had to borrow the money to start a business.
If the business succeeded, he’d earn enough money to repay the loan. If the business failed, he’d have to repay the loan anyway. He’d have to pay the $250,000 back to the bank, and in the 1890s, that was a lot of money.
At the time, electricity was like private jets are today - grossly expensive and available only to those who don’t spend much time worrying about their bank account. But Insull had a dream that electricity could be produced on a much larger scale and used by the masses. By developing revolutionary ideas, like variable pricing and inexpensive home wiring, he turned electricity from a luxury into a virtual commodity.
Samuel Insull found a way to lower the price of electricity. In one single year, the average family found that their electricity bill was more than 30% lower.
Electricity became affordable and became part of everyday life.
Before long, Insull’s new company was servicing over ten million customers in 32 states and had a market value of over $3 billion (somewhere around $66 billion in today’s dollars, which is about the size of Amazon.com and Kraft Foods, combined). Insull also benefited personally. At one point, his net worth was estimated to be $100 million. Time magazine even celebrated his success by putting him on their cover in 1929. He was a true American success story - a foreigner with virtually nothing to his name who had made it big through hard work and innovation.
Samuel Insull was a symbol for successful immigration. He came to the United States with no money, but he came with the desire to work hard and learn.
Such examples of successful immigration gave rise to the phrase “land of opportunity” when people spoke of immigration into America. Naturally, not all immigrants became as wealthy as Samuel Insull. But they found that they experienced a better standard of living after coming to the United States. They found that they had chances and opportunities.
Entrepreneurs like Insull not only were able to work themselves out of poverty, but they created opportunities for others. They created well-paying jobs in their factories and offices. They created investment opportunities for families.
But, as the Mercury Radio Arts report continues, “then the world changed.”
As the Roaring Twenties morphed into the Great Depression, Insull’s business struggled. The debt and equity he’d financed his company’s growth with had become virtually worthless, leaving over a million middle-class Americans who’d invested in his stock in financial straits. The public outrage was palpable.
What could have been a short-term economic downturn in 1929 became a long-term economic crisis. Samuel Insull lost his wealth, as did millions of his customers and his investors. Losing the wealth was a minor problem. The major problem was that people blamed Insull for the crisis.
It is easy, in hindsight, to understand that there was no way that Insull could have created these problems, and there is no way that he would have wanted to destroy his own wealth. But sometimes, during disasters, people’s desire to find someone to blame - people’s desire to punish a scapegoat - is strong enough to make them act irrationally.
In the matter of a few short years Insull had gone from hero to villain; from the poster boy for everything great about American capitalism to the poster boy for everything wrong with it.
There are a number of lessons to be learned from the Great Depression, and how people joined forces against Insull to blame him and eventually to attack him in court. Economists have developed various competing theories to explain the Great Depression, but none of them would hold Samuel Insull as responsible for the collapse of his own company.
Eventually, the courts failed to validate people’s irrational rage, and declared Insull innocent:
The government, seizing on the public’s fury over their lost wealth, charged him with fraud, and though he was acquitted at trial, it didn’t matter - the damage was done. Insull was the most hated man in America.
It is a basic fact about economies that they have occasional downturns - this is sometimes called the “business cycle.” There will be years when wages and profits increase, and there will be years when they decrease. It is not pleasant to live through these cycles, but if people wait patiently, the economy works its way back toward positive growth.
Such short term downward trends can become long term - the business cycle can get stuck - if the government takes action. Although such government intervention is usually well-intended, it nonetheless stymies the economy’s organic tendencies to return itself to levels which are closer to equilibrium.
The Great Depression of the 1930s was not the fault of Samuel Insull. It was caused by government intervention into the ordinary buying and selling which shape the economy. But Insull was the scapegoat, the target of people’s unjust rage.
All he'd done to deserve it was to build a remarkable company that, like so many others, suffered during the Depression.
Although declared innocent in a court of law, Insull’s reputation and career were permanently damaged. Eventually, he left the United States.
As an immigrant, Samuel Insull arrived in America with no money. He’d worked hard and studied, he took risks and looked for opportunities. He’d gained a lot of wealth, and in the process, he’d created income for millions of other people, lifting them from the lower classes to the middle class. He’d benefitted from the chances which are made available in a free economy.
But when the government took the economy’s freedom away, by regulating and taxing, the income went away, too. Even though the government thought it was doing something to help people, it was actually harming them.
Although Samuel Insull was the most dramatic victim of the government’s terrible mistake, he wasn’t the only victim. Millions of Americans would suffer through the Great Depression. Their suffering could have been avoided if the government had simply done nothing.
Insull became a symbol, both for amazing possibilities offered by America’s free economy, and for the misery and anger caused by governmental regulation.
In 1938, Samuel Insull, who’d fled America for France (oh the irony), died of a heart attack in a Paris subway station. He had eight cents in his pocket. It was a sad and lonely ending for a man who exemplified the American dream by bringing affordable electricity to millions.
He’d done nothing wrong and nothing illegal. He’d been praised by millions of people around the nation, people who’d benefitted materially from his work. When people suddenly felt sharp economic pain, they lashed out blindly, needing someone to blame and to punish. Samuel Insull was an innocent man who was also a convenient target.
Forced to defend himself at trial, he said:
I find myself somewhat in this sort of situation. What I did, when I did it, was honest; now, through changed conditions, what I did may or may not be called honest. Politics demand, therefore, that I be brought to trial; but what is really being brought to trial is the system I represented.
The sad fact is that innocent men are sometimes made into scapegoats simply because people are angry and don’t know who to blame.
