Planet Money reruns its 2014 episode The history of light in memory of economist Bill Nordhaus, who died at 85.
Nobel-winning Yale economist Nordhaus found a day's wages bought ten minutes of Babylonian light and twenty thousand hours by the 1990s.
The episode's lesson is that growth can make everyone better off, with kerosene and Edison's lamp replacing candles and whale oil.
The four-thousand-year collapse in the price of light
The history of light is the history of economic growth, told through a single price. For four thousand years light came from burning fat, so a day's wages bought only minutes of it and most people were subsistence farmers. Kerosene and then electricity broke that pattern. Nordhaus's measurement of the price, from a Babylonian lamp burned in his dining room to twenty thousand hours of light per day's work, is his evidence that the pie can get bigger for everyone.
Takeaways
The falling price of light measures progress. Nordhaus's yardstick was how much light a day's wages could buy. By the 1990s the answer was about twenty thousand hours, against roughly ten minutes in ancient Babylon, his evidence of how much richer ordinary people had become.
Lighting barely improved until the nineteenth century. Even in the 1700s most people were subsistence farmers, and travel still meant walking or riding. Nordhaus found lighting improved very modestly from Babylon to around 1800, then the pace changed enormously.
Professional science was new, so kerosene came late. Kerosene came so late because professional science was still new in the 1800s, when universities began paying people to run experiments daily. A century earlier Yale taught Greek and logic and had no scientists.
Edison needed bankers as much as invention. Edison's eureka moment was not enough without money, and JPMorgan and other investors bankrolled the first power station. Edison compared his costs with gas constantly, and most growth comes from the structure around an invention, the patents and companies that let investors risk money.
Growth brought coal pollution and physical limits. The first power plants burned coal and the pollution was bad, with coal feeding stopped when health department photographers appeared. John Edmond of Cree says LED output might double from here but not triple or quadruple, because of physical limits.
Growth buys less work and former luxuries. Goldstein says growth is not all good, but it lets people work less or buy things once reserved for the wealthy, like books and vacations. Kestenbaum frames the story as why billions do not worry about starving.
How light got cheap
For most of four thousand years, light came from burning things. People made do with animal fat, dried salmon in the Pacific Northwest, firefly lanterns in the tropics and storm petrels in Scotland, fitted with a wick down the throat.
By the nineteenth century whale oil was the main alternative, and a day's work bought about an hour of light.
Kerosene, developed in Canada around 1850, was cleaner and about five times more efficient than whale oil, so a day's work bought about five hours. It lit the world and saved the whales.
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On this episode 6
Show 1
Edison's 1882 central station lit about a square mile of Lower Manhattan, but reaching it took JPMorgan's money and a company through which investors could risk it.