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Thomas Edison was Scrooge

After all, just think of all the candle manufacturers he killed. HT to Galen Dole (what follows is his commentary).

How many candle makers were put out of business by Thomas Edison?

In my answer to this question, I will assume that all candles before Edison’s time were used exclusively for lighting purposes, and will also assume that all bulbs are incandescent (and not fluorescent) light bulbs, for these are Edison’s invention. I will give two estimates as to how many candle makers were put out of business, one estimate assuming that for every candle we now use a light bulb, and a second assuming that in today’s world, we need much more light (wintercow20: this is also a function of the lower prices today, but for simplicity’s sake, just ignore it for now), so multiple candles must be substituted for each candle. My first calculation shall be based on the first assumption:

Let n=number of light bulbs used in household.

n=1 porch light + 1 hall light +1 kitchen light + 1 bathroom light + 1 bedroom light + 1 study light + 1 living room light = 7, which could range up to, say, 20, accounting for 3 extra bedrooms, 2 extra bathrooms, desk lamps, standing lamps, etc. An average household, therefore, has an average of 13.5 lights.

n = 13.5

Candle sales in the US in 2004 are estimated at \$2.1 Billion ).Taking prices from www.yankeecandle.com, the average commercial candle costs about \$10. The census estimates that there were 107,672,899 households in the US in 2004. 107,672,899 x 13.5 x \$10 = \$14,535,841,365 which is the projected money lost by the candle industry due to light bulbs today. Subtracting the actual candle sales gives \$14,535,841,365 – \$2,100,000,000 = \$12,435,841,365. Assuming that half of the industry’s revenues were offset by manufacturing costs (a generous estimate), then \$6,217,920,682.50 was paid to employees.

According to this site, the average candle store retail manager earns a salary of \$40,000 per year.

\$6,217,920,682.50/\$40,000 = 155,448 candle makers put out of business by Edison in the year 2004. That’s the low-end estimate. (wintercow: if you allow that total compensation exceeds wages and salary by 50% more, then this estimate is high by 33%.

But is a candle really enough light? Indeed, today’s 40W light bulbs supply approximately 500 lumens of light, compared to the average candle’s measly 13. That means that in order to have the same amount of light that we do today, we would need 500/13 ≈ 39 candles for every light bulb, instead of our previous estimate of one. Therefore, (13.5 bulbs/household) x (39 candles/bulb) = 526.5 candles per household. Wow!

Given that same estimate and equal costs, the candle industry would be losing out on much more money:

107,672,899 x 526.5 x \$10 = \$5,668,978,132,350 – \$2.1 Billion = \$5,666,878,132,350. That’s over five trillion dollars! And applying the same reasoning as before, \$2,833,439,066,175 is the amount the candle industry would be making in the United States after factoring in manufacturing costs. And that amount divided by the average salary, \$40,000, means that 70,835,977 candle makers worldwide would be out of work because of the United States’ candle consumption alone. Thank you, Thomas Edison.

Thank you indeed! Of course, that should tell you two things. First, just how much better off we are today than our measured income captures. By conventional standards, the typical American is 5 to 7 times better off today in terms of household income. But, just factoring in changes in lighting usage shows us that we are hundreds if not thousands of times better off in terms of our ability to access light.

Second, I only brought this question up in class because I was having students think about the impact of trade on gross job loss (we know it has zero to a positive effect on net jobs). If the anti-traders among us were consistent in their beliefs that trade is bad because some people lose their jobs, then why do they not be consistent and precise in their condemnation of modern technology – which destroys more jobs in a single year than trade does in an entire generation?

"1" Comment
1. kerosene had already replaced candles to a large extent. but agree with premise that technology displaces more people than trade ever has. how many welders put out of jobs by robots? toyota, Gm etc.