Maury Klein

The Change Makers

The worst was yet to come. In 1934 Insull was indicted for mail fraud in an atmosphere that had grown virulently antibusiness. The charges were dubious at best, but they transformed the man who only a few years before had been an icon for the best attributes of business into a scapegoat for its transgressions. Despite the lurid publicity surrounding the trial, Insull was found innocent. A year later the state of Illinois tried him on embezzlement charges but failed to gain a conviction. Although Insull beat the charges, the headlines and notoriety damaged his reputation beyond repair. He spent his few remaining years broke and discredited. As his biographer observed, 'For his fifty-three years of labor to make electric power universally cheap and abundant, Insull had his reward from a grateful people: he was allowed to die outside prison.'

No such fall from grace befell Thomas Edison, who remained heroic figure in the public's eyes to his dying day. Still, he remains unique among the great entrepreneurs not only for the breathtaking number of his accomplishments but also for the astonishing number of his failures and gaffes. No man was so right about so many fundamental things and so wrong about so many others. He invented the phonograph but insisted that it was a business machine. 'I don't want the phonograph sold for amusement purposes,' he said. 'It is not a toy. I want it sold for business purposes only.' When he returned to the machine decades later and devised several major improvements, he resisted for a long time moving from his once successful cylinders to disks as a recording medium. Then, after making a belated success of disks, he adamantly refused to regard radio as anything more than a passing fad even though it soon devastated the phonograph and recording business with its programs of free music.

Edison's pioneering work in motion pictures, which engulfed him in endless litigation, led to the creation of the 'true father of all modern motion picture cameras' and the use of thirty-five-millimeter film, which remains standard. He also erected the first building intended as a studio for making films, and explored the use of color and sound in movies. At the time, however, Edison became best known for devising the kinetoscope, a peep-show machine that exhibited short movies to individual viewers. It was a stunning success and instant moneymaker, and to Edison it represented the future of the industry. To the suggestion that movies ought to go into a bigger hall or theater where large numbers or people could watch a longer version at the same time without interruption, he turned an already deaf ear. No amount of argument could convince him to leave 'the narrow world of vaudevillian one-reelers, preachy vignettes, and didactic "home library" subjects' in favor of full-length feature films.

By far his greatest misjudgment occurred in the very field that brought him immortal fame. His invention of the incandescent light bulb and organization of the first electric power generating and distribution system ranks among the greatest technological achievements in history, and his efforts to expand that system marked the beginning of the electric power industry. It also became a trap that led him into wrongheaded embarrassment, if not infamy. In utilizing direct current for his system, Edison dismissed the potential of alternating current as unsafe despite the severe limitations of DC, which could not be transmitted over an area much greater than a mile. No amount of argument could dislodge his prejudice against AC. Edison had never been able to detach his ego from his inventions or give rivals their due. Of the man who became his bitter rival he once said, 'Tell Westinghouse to stick to air brakes. He knows all about them. He don't know anything about engines.'

In fact, George Westinghouse knew a great deal about engines and even more about the potential of AC, which he proceeded to develop. His success prompted Edison to launch the 'war of the currents,' in which he used every means fair or foul to thwart Westinghouse and his supporters, including the charge that they were foisting a lethal technology upon an unwary public. It proved an ugly fight, but in the end Edison's DC was no match for a system that could transmit current hundred of miles compared to mere city blocks. The successful spread of AC forced even the Edison companies to adopt it by the turn of the century. Here, as elsewhere, Edison was spectacularly wrong in his dogged refusal to grasp or accept change in a field he had pioneered. It was as if his genius could take him only so far before becoming an obstacle instead of a beacon.