Planet Money
00:13:54 · Bill Nordhaus, David Kestenbaum, Jacob Goldstein, Paul Israel, S6
[00:13:54] S7: Why were why were they doing those experiments a century earlier? Well, Yale didn't have scientists a century earlier. They were teaching Greek and they were teaching logic. [00:14:05] S5: Now all these scientists are working on better ways to make light. And light is getting cheaper. More people are using it. No more locking yourself in and huddling in the dark all night. Around this time, street lights start popping up, and people start going out at night. [00:14:18] S1: So we have kerosene. What's the next big advance after that? [00:14:21] S7: Okay. Next big advance after that is the electric lamp. [00:14:25] S4: The big one. [00:14:27] S7: Well, you might think so. [00:14:29] S5: You know, Jacob, I thought I knew the story of the light bulb. You know, Thomas Edison, the great inventor, story about science and innovation. You know, Edison trying all these different filaments, these different designs, and finally getting one that'll glow for hours. But this Eureka light bulb moment, it is not... It's not enough to get you to the world of really cheap light because Edison needed this other thing. He needed money. He needed lots and lots of money. [00:14:53] S1: After the break, how many bankers does it take to turn on a light bulb? One, JPMorgan, more or less. [00:15:02] S6: Stay tuned for the following announcements and messages from our sponsors.
00:15:02 · S6, S0, Paul Israel
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00:16:29 · Paul Israel, Jacob Goldstein, David Kestenbaum
[00:16:29] S4: So right now, we're at the location of the original power plant in Lower Manhattan. [00:16:34] S1: This is Paul Israel. He's an Edison scholar. We met him here in New York City. We're standing in front of this plaque. It says Thomas Alva Edison in big letters, and there's this picture, an etching. [00:16:47] S4: And the image that they show is the generator room of the power plant. [00:16:51] S1: With a bunch of guys in really long mustaches and hats. [00:16:54] S4: Right. This is 1882, so lots of mustaches at that point. [00:16:58] S5: The money part of building the power plant is so important that when they finally get this historic thing completed in 1882, they get the power plant built, and they're ready to turn it on. Edison is not here. He's a few blocks away at a big impressive stone building, where today there is another plaque to a guy you may have heard of, JPMorgan. It reads, the capitalist's capitalist known throughout the world of finance, sought out by presidents, helped bankroll the industrialization of America. Can't write that on too many people's plaques. JPMorgan's bank and a bunch of investors, they put up the money for the power plant. [00:17:33] S1: To be clear, they built this great big expensive complicated power station, the first central power station in the world. Right? Basically, inventing electric light. And when they turn it on, Edison is not there. Right.
00:17:33 · Jacob Goldstein, Paul Israel, David Kestenbaum
[00:17:33] S1: To be clear, they built this great big expensive complicated power station, the first central power station in the world. Right? Basically, inventing electric light. And when they turn it on, Edison is not there. Right. [00:17:47] S4: Right. He was where he needed to be with the people who had funded the whole thing. Right? So at 3PM on September 4, Edison flicked on the switch here at JPMorgan's office. [00:17:58] S1: And what happened? [00:17:59] S4: It went on. And as did lights all over the district, about a square mile of Lower Manhattan suddenly was lit by electricity. [00:18:08] S5: You think of Edison the inventor, but even more important is Edison the businessman. At the time, buildings in Lower Manhattan were running off gaslights, and Edison knew that was who he had to beat. [00:18:19] S1: So he spent a lot of time thinking about economics. [00:18:21] S4: Yeah. Well, he he did. Yeah. In fact, if you look at his notebooks, constantly, he's going through and comparing the cost of what he's doing to what the cost of a gas system is. [00:18:31] S5: You never think about that. [00:18:32] S4: Well, and that's what made him such a good innovator. Right? Because he he recognized that these economic questions were just as important in designing what he did in the laboratory. [00:18:43] S1: When you think of economic growth, how much do you think of it as coming from, like, individual, like, eureka moments and inventions and stuff like that? And how much is it the stuff around it? Like, the ability to finance these things, the economic structure around it.
00:18:43 · Jacob Goldstein, Paul Israel, David Kestenbaum
[00:18:43] S1: When you think of economic growth, how much do you think of it as coming from, like, individual, like, eureka moments and inventions and stuff like that? And how much is it the stuff around it? Like, the ability to finance these things, the economic structure around it. [00:18:56] S4: So most of it is actually the structure around it. [00:18:59] S1: To light a square mile of Lower Manhattan, Edison needed a whole financial system. He needed patents, a way to protect his ideas so no one would steal them. He needed a company, a way a bunch of different investors could come together and risk money, a lot of money, to build a power plant and lay wires so you could try this crazy thing, light without fire. Edison comes along at a time when all this machinery, patents, corporations, banks is in place. [00:19:26] S5: There were consequences to growth. I mean, those first power plants burned coal, and pollution was pretty bad. Edison built a huge power plant on the East Side Of Manhattan. And at some point, the city health department got involved. And this is according to the New York Times, quote, when it was found, health department men were trying to photograph the smokestacks. Scouts were put on the company's roof who ordered the feeding of coal stopped whenever photographers appeared. On the other hand, you now had a city lit up with cheap electric light. Trade offs.
00:19:26 · David Kestenbaum, Jacob Goldstein, Bill Nordhaus
[00:19:26] S5: There were consequences to growth. I mean, those first power plants burned coal, and pollution was pretty bad. Edison built a huge power plant on the East Side Of Manhattan. And at some point, the city health department got involved. And this is according to the New York Times, quote, when it was found, health department men were trying to photograph the smokestacks. Scouts were put on the company's roof who ordered the feeding of coal stopped whenever photographers appeared. On the other hand, you now had a city lit up with cheap electric light. Trade offs. [00:19:52] S1: Around this time, everything is getting faster and cheaper. Scientists keep making new discoveries. You get the internal combustion engine, the tractor. For the first time in human history, most people don't have to work as farmers. [00:20:04] S5: This went on decade after decade all through the twentieth century. All kinds of things got much cheaper like light. [00:20:10] S1: And if you look at the really long arc here, it's it's amazing. I mean, go all the way back to the Babylonians. Okay? Babylonians worked all day. You got the equivalent of ten minutes. Ten minutes of light. [00:20:23] S5: Four thousand years later, in the nineteenth century with kerosene lamps, things are better. [00:20:28] S1: A day's labor gets you five hours of light. And by the time Nordhaus does his light study in the nineteen nineties, if you work a day, how much light do you get? [00:20:38] S7: Maybe twenty thousand. [00:20:40] S5: Twenty thousand hours?