The Lessons of History

It has been said that those who fail to learn from history are doomed to repeat it. But what if the lessons of history are worth repeating? What of the events, people, and ideas of the past that moved mankind forward? Shouldn’t we seek to emulate them? Consider Sam Insull and the electric industry as an example.

Insull was one of the leading forces behind the modern electric utility. He discovered numerous innovations that helped Consolidated Edison become one of the largest and most successful providers of electricity in the United States.

One of his innovations was tiered pricing. He discovered that his production plants weren’t being utilized to their maximum efficiency. Electricity demands were highest in the evening. During the day, his plants operated at a fraction of their capacity. In response, Insull instituted tiered pricing. He charged less for electricity during the day, and thereby encouraged more electricity usage during the day. His cost per unit fell, and so, he was also able to reduce the price of electricity at night. Everyone benefited.

When Comcast introduced tiered pricing—providing faster Internet connections for a fee—the critics responded by demanding “net neutrality.” It wasn’t fair, they argued, that some people got better service, even if they were paying for it. And so, they fought for laws that will prohibit such “discriminatory” practices.

Consider what would have happened if “progressives” had argued for “electricity neutrality.” Insull, and those who followed his example, would have been prohibited from achieving economies of scale that ultimately benefited all consumers. In the name of fairness, all users would have been forced to pay higher rates.

But economic arguments are only one lesson that we can learn from history. We can also learn that economic arguments are ultimately trumped by moral arguments. However, that is a lesson for another post.

History is not an unending story of mistakes and failures. We would not enjoy the standard of living we do it that were the case.

History is a philosophical laboratory. We can see the implementation and results of fundamental ideas. If we study history, we can see the results of good ideas and bad ideas. And then we can decide which are worth repeating and which should be fought.

Comments are closed.