Tim Harford:

But given the huge investment this involved, they were often disappointed with the savings. Until about 1910, plenty of entrepreneurs looked at the new electrical drive system and opted for good old-fashioned steam.

Why? Because to take advantage of electricity, factory owners had to think in a very different way. They could, of course, use an electric motor in the same way as they used steam engines. It would slot right into their old systems.

But electric motors could do much more. Electricity allowed power to be delivered exactly where and when it was needed.

Small steam engines were hopelessly inefficient but small electric motors worked just fine. So a factory could contain several smaller motors, each driving a small drive shaft.

As the technology developed, every workbench could have its own machine tool with its own little electric motor.

Power wasn’t transmitted through a single, massive spinning drive shaft but through wires.

A factory powered by steam needed to be sturdy enough to carry huge steel drive shafts. One powered by electricity could be light and airy.

Steam-powered factories had to be arranged on the logic of the driveshaft. Electricity meant you could organise factories on the logic of a production line.

More efficient

Old factories were dark and dense, packed around the shafts. New factories could spread out, with wings and windows allowing natural light and air.

In the old factories, the steam engine set the pace. In the new factories, workers could do so.

You needed to change everything: the architecture and the production process.

And because workers had more autonomy and flexibility, you even had to change the way they were recruited, trained and paid.

Factory owners hesitated, for understandable reasons.

Of course they didn’t want to scrap their existing capital. But maybe, too, they simply struggled to think through the implications of a world where everything needed to adapt to the new technology.

In the end, change happened. It was unavoidable.

Mains electricity became cheaper and more reliable. American workers become more expensive thanks to a series of new laws that limited immigration from a war-torn Europe.