Considering how life-changing some of Edison’s inventions were I don’t remember ever reading that he was one of the wealthiest men in America at that time.
We read about Carnegie and Rockefeller, but was Edison ever as wealthy as they were? Was he not a smart businessman? Was his push of DC versus AC a financial disaster for him? Why wasn’t Edison a mega-millionaire? Or was he?
IIRC, it is for the same reason that the Wright Brothers didn’t become rich. One invented, his products were so easily duplicated that he spent what little money he did get fighting patent battles.
Edison did have, at least at some point, a lot of money. He plowed a lot into other inventions, most of which didn’t pan out – but which major concerns did? . But his electrical system was a major thing in its time, and he had one of the first motion picture studios in the country. His light bulb was virtually a monopoly, and his phonograph was an immense seller. Not to mention a zillion inventions you probably never heard of that did well (recording telegraph, his stock ticker, etc.)
Why he wasn’t reckoned a major rich guy – because of too many bad forays, bnad breaks, or whatever, I don’t know.
he was buddies with Henry Ford and other rich people.
It’s a combination of many factors. Edison was wealthy by any ordinary standard. He just wasn’t super-rich.
In no special order:
Edison spent money faster than it came in. In particular he practically bankrupted himself in a now-forgotten scheme to draw iron from otherwise worked-over slag. He could never get it to run properly, but trying to build on an industrial scale drained him.
He invented lots of stuff, but so what? There were operating systems before MS-DOS, music players before the iPod, search engines before Google. Being first is rarely the route to making money. Building on someone else’s first steps is historically far more lucrative. Edison put out a slew of new inventions but then he went on to other new inventions. The very first phonograph was never going to be a giant consumer item.
He was wrong in some major things, notably the obsession with DC. That held the company back for years while Westinghouse took the lead.
Patents are only good if you can keep others from infringing and pirating. Edison was part of the movie trust, but nobody could keep the flood of new camera and projector designs off the market, and nobody could control the zillion places that sprang up to show “illegal” movies. And the movie-makers went to Hollywood, so distant from New York City in those days that it was almost like living in another world. They violated the trust a thousand times a year and eventually won.
Few inventors are ever good businessmen. George Westinghouse was a rare exception. Edison always had to go to banks for money and they were the ones that created the businesses. General Electric was formed by a merger of Edison General Electric, itself a merger of several companies that Edison had created, with The Thomson-Houston Electric Company, started by Elihu Thomson, as good an inventor as Edison. Neither ran the new company. That went to businessmen who cared about spending 24 hours a day on money. Edison didn’t.
Running a giant corporation is as much of a special skill as inventing. And it calls for the same sort of all-consuming obsession. Edison (and Thomson and Tesla and many others of that era) wanted to work in their labs. That’s totally incompatible with being a CEO. Patents and royalties on them run out after a few years. Corporations create their own teams to devise a constant stream of new patents, and then have to develop them and market them and run them and work with wholesalers and consumers and the banks and the stock markets and investors. After a while that cuts out the original inventor.
The corporate world was also different in those days. It’s easier for founders to keep control of huge blocks of stock today and get rich from IPOs. Then, the people putting up the money took the majority of stock. Edison became a figurehead in GE. Wealthy, sure. But no inventor was among the super-rich at the turn of the 20th century. That was for moguls and bankers.
Thanks EM. That makes a lot of sense.
And when that went down, he tried to re-use the machinery involved to make concrete houses. That is, the entire house - furniture and all - was to be a single mould into which you just poured concrete, polished and lived in. Of course it didn’t and couldn’t work - if it flowed well enough to get into all the nooks and crannies of the mould, it was too weak to make good foundations and walls - and the cost of the moulds turned out to be prohibitive. Then he tried to re-purpose that same machinery again to make just concrete furniture, such as sofas, pianos and phonographs!