jrlhistory

By Jeremy Luther

July 23, 2026

In many cases, Americans are familiar with Thomas Edison as an inventor, but in reality he was a constant thinker and tinkerer. Beyond his inventions, he dealt in business, finances, and the economy of his time. Like some of his contemporaries, he could be both brilliant in some ways and stubborn in others. Also like his peers, Edison often thought of ways to better the society around him. The following research highlights a few examples of how Thomas Edison interacted with the economy, finances, and business of his time in the early twentieth century.

Edison had initial success in the audio industry due to a lack of competition. When competition arrived in the early 1900s, Edison failed to take public opinion and the advice of his business managers and suffered as a result. Edison’s company mass marketed the phonograph between 1880 and 1910.^[1] Initial sales were slow until he designed cheaper models.^[2] Still, by that time, the Victor Talking Machine Company, run by Eldridge Johnson, was marketing its disc gramophones in competition with Edison’s cylinder models.^[3]

The Victor’s success could be attributed to better marketing strategies and design. First, the machines were more appealing, and owners could store and keep records more easily than Edison’s cylinders.^[4] Second, initial records could play for four to seven minutes, compared with two minutes on a cylinder.^[5] Also, Victor Company kept in close communication with its merchants and made exclusive contracts with contemporary artists.^[6] Finally, the company put a lot of its money into mass media marketing.^[7] Compare these strategies with Edison, who sold his machines by promoting their superior craftsmanship and sound, did little advertising (initially), and largely ignored requests for popular artists.^[8] Edison eventually made some concessions. He made the Blue Amberol, a cylinder that could play up to four minutes with an even greater sound quality, and he also produced discs, called Diamond Discs.^[9] Still, he continued to focus on his cylinders, believing that they were more useful and of better quality.^[10] Despite giving some concessions to better marketing by the 1920s, Edison’s Talking Machines only gained 2% of the market by the end of the 1920s due to his neglect of sound marketing strategies.

Edison also tried his hand in economics with the hope of stabilizing the economy and helping American farmers. Edison ruminated about how to keep the monetary value sound by backing it with agricultural commodities. In 1922, he sent a proposal for an amendment based on his ideas. According to his plan, farmers could store their commodities at a government storage facility or warehouse for free.^[11] Then the Federal Reserve could issue two certificates to the farmer: one was an interest-free mortgage certificate worth up to half of the commodity’s total value, and the other was a certificate of ownership to the commodity that the farmer used when he took his commodity to sell.^[12]

Edison sought the advice of others before proposing his idea, but he mostly ignored the wisdom of Federal Reserve members and economic scholars. Several noted that taxpayers would have to pay for the warehouse storage facilities and management of transactions between farmers and the Federal Reserve.^[13] From Princeton, E. W. Kimmerer claimed that Edison failed to take into account that the idea did not adjust for currency supply and trade demands, while also increasing administrative costs.^[14] Additionally, E. M. Patterson of the University of Pennsylvania claimed that commodities were an unsatisfactory means of exchange for everyone.^[15] Finally, two members of the Federal Reserve did not believe that the currency would be sound or effective in international trade.^[16]

Edison was no stranger to failure, nor was he afraid to venture into new territories in business and innovation. It was his constant thinking of how to make life better and prepare for inevitable shortages that drove his thinking. His methods of production are still imitated among modern industries. Edison strongly believed in research alongside manufacturing.^[17] Research included more than just diverse product designs and innovations. It also included business models.^[18] In business, Edison attempted to control every aspect of production, and when a major product performed well, he set up specialized product divisions to better serve his customers.^[19] In leadership, Edison managed his company like a family company where he oversaw most, if not all, operations and maintained the final say in decisions.^[20]

Thomas Edison often approached business marketing more like an inventor than an advertiser, and it did cost him on occasion. He worked tirelessly even until his old age. At 81 years old, he was working on ways to grow, harvest, and manufacture rubber within the United States in the event of a war.^[21] His stubbornness could cost him, but his method of research influenced future businesses.

---

^[1] Leonard DeGraaf, “Confronting the Mass Market: Thomas Edison and the Entertainment Phonograph,” Business and Economic History 24, no. 1 (1995): 88, http://www.jstor.org/stable/23703274.

^[2] Leonard DeGraaf, “Confronting the Mass Market,” 90.

 

^[3] Leonard DeGraaf, 90.

^[4] DeGraaf, 92

 

^[5] Ibid. 

 

^[6] Ibid. 

 

^[7] Ibid. 

 

^[8] Ibid.

^[9] DeGraaf, 92-93.

 

^[10] Ibid., 93.

 

^[11] David L. Hammes and Douglas T. Wills, “Thomas Edison’s Monetary Option,” Journal of the History of Economic Thought 28, no. 3 (2006): 297, https://doi.org/10.1080/10427710600857773.

^[12] David L. Hammes and Douglas T. Wills, “Thomas Edison’s Monetary Option,” 297.

 

^[13] Hammes and Wills, 302. 

 

^[14] Hammes and Wills, 303.

 

^[15] Ibid., 303.

 

^[16] Ibid.

 

^[17] “Edison’s Other Genius,” The Wilson Quarterly 16, no. 1 (1992): 16, http://www.jstor.org/stable/45270689.

^[18] “Edison’s Other Genius,” The Wilson Quarterly 16, no. 1 (1992): 16, http://www.jstor.org/stable/45270689.

 

^[19] “Edison’s Other Genius,” 136.

 

^[20] Ibid.

 

^[21] Harry Goldberg, “What Thomas A. Edison is Trying to do: Eighty-One Years Old this Week, the Great Genius of American Invention is Endeavoring to Wrest from Nature the Secret of Growing Rubber in North America, Thus to Make His Country Independent of Foreign Supply,” The Washington Post (Feb 05, 1928), https://www.proquest.com/newspapers/what-thomas-edison-is-trying-do/docview/149947754/se-2.

Bibliography

Primary Sources:

Goldberg, Harry. “What Thomas A. Edison is Trying to do: Eighty-One Years Old this Week, the Great Genius of American Invention is Endeavoring to Wrest from Nature the Secret of Growing Rubber in North America, Thus to make His Country Independent of Foreign Supply.” The Washington Post, Feb 05, 1928. https://www.proquest.com/newspapers/what-thomas-edison-is-trying-do/docview/149947754/se-2.

Special Dispatch to the Baltimore Sun. “GASOLINE AUTO DOOMED: THAT IS WHAT THOMAS A. EDISON DECLARES.” The Sun, Aug 04, 1903. https://www.proquest.com/newspapers/gasoline-auto-doomed/docview/536721646/se-2.

Special to The New York Times. “SAYS ALL MOTOR CARS WILL HAVE OWN STILLS: THOMAS A. EDISON JR. ANNOUNCES HE IS SEEKING SUBSTITUTE FOR GASOLINE.” New York Times, Jun 05, 1921. https://www.proquest.com/newspapers/says-all-motor-cars-will-have-own-stills/docview/98448482/se-2.

Secondary Sources:

DeGraaf, Leonard. “Confronting the Mass Market: Thomas Edison and the Entertainment Phonograph.” Business and Economic History 24, no. 1 (1995): 88–96. http://www.jstor.org/stable/23703274.

“Edison’s Other Genius.” The Wilson Quarterly (1976-) 16, no. 1 (1992): 16, 136. http://www.jstor.org/stable/45270689.

Hammes, David L., and Douglas T. Wills. “Thomas Edison’s Monetary Option.” Journal of the History of Economic Thought 28, no. 3 (2006): 295–308. https://doi.org/10.1080/10427710600857773.