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Selling Power

Economics, Policy, and Electric Utilities Before 1940

We remember Thomas Edison as the inventor of the incandescent light bulb, but he deserves credit for something much larger, an even more singular invention that profoundly changed the way the world works: the modern electric utility industry. Edison’s light bulb was the first to work within a system where a utility generated electricity and distributed it to customers for lighting. The story of how electric utilities went within one generation from prototype to an indispensable part of most Americans’ lives is a story about the relationships between political and technological change.
John L. Neufeld offers a comprehensive historical treatment of the economics that shaped electric utilities. Compared with most industries, the organization of the electric utility industry is not—and cannot be—economically efficient. Most industries are kept by law in a state of fair competition, but the capital necessary to start an electric company—generators, transmission and distribution systems, and land and buildings—is so substantial that few companies can enter the market and compete. Therefore, the natural state of the electric utility industry since its inception has been a monopoly subject to government oversight. These characteristics of electric utilities—and electricity’s importance—have created over time sharp political controversies, and changing public policies have dramatically changed the industry’s structure to an extent matched by few other industries. Neufeld outlines the struggles that shaped the industry’s development, and shows how the experience of electric utilities provides insight into the design of economic institutions, including today’s new large-scale markets.

336 pages | 7 halftones, 26 line drawings, 9 tables | 6 x 9 | © 2016

Markets and Governments in Economic History

Economics and Business: Economics--Government Finance, Economics--History, Economics--Urban and Regional


“Neufeld’s account of the development of electricity markets in the United States clearly outlines the problems stemming from the industry’s character as a natural monopoly. Chronicling the responses of public officials over time, he explains why each response occurred within the context of political struggle and carefully explains how some policy responses, while solving a current problem, created future problems as the industry evolved and technology changed. Neufeld is a leading authority on the economics of the early electric industry, and this book will be of interest to economic historians, energy economists, scholars of both historic and modern industrial organization, historians of the progressive era, and political scientists interested in better understanding the rise of government in industries.”

Carl Kitchens, Florida State University

“Neufeld has written extensively and incisively on the history of the US electric utility industry, making him well positioned to undertake a comprehensive examination of the history of this unique industry. Blending solid economic theory with the historian’s attention to detail, this book likely will be his magnum opus.”

William J. Hausman, College of William and Mary

Selling Power is a thoughtful and well-written history . . . . Its detailed and rigorous treatment of primary sources will make it a valuable resource for scholars who want to incorporate electricity into their work on this period, for economic historians who want to grapple with some of these same questions applying different theoretical frameworks, and for scholars and policy makers analyzing the twenty-first-century challenges of the technological dynamism and political economy who want to understand the historical foundations of this industry.”


"Presents a history of the electric-power industry, concentrating on the structure of its economic institutions and the ways in which economics and public policy have been affected by that structure."

Journal of Economic Literature

"[T]his work is a valuable window into the way that electricity has shaped American political and economic institutions and an interesting case study of the modernizing American economy of the pre–World War II era....Selling Power is an interesting and valuable addition to the history of electricity, industrial growth and development, the intersection of private and public policy during the Progressive and New Deal eras, and the modernization of the U.S. in the early twentieth century."

American Historical Review

"...Neufeld’s command of economics and his deep reading of the primary sources produce a work notable for its willingness to render judgements...Selling Power is a welcome addition to the growing scholarship on the history of electrification."

Robert Lifset | Technology and Culture

Table of Contents

List of Illustrations
List of Tables
Introduction. The Economics of Electric Utilities
Chapter 1. Early Commercialization
Chapter 2. The First Electric Utilities
Chapter 3. The Adoption of State Commission Rate Regulation
Chapter 4. Growth and Growing Pains
Chapter 5. Public Utility Holding Companies: Opportunity and Crisis
Chapter 6. Public Utility Holding Companies: Indictment and “Death Sentence”
Chapter 7. Hydroelectricity and the Federal Government
Chapter 8. Rural Electrification
Conclusion and a Look Forward from 1940

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