The Social Construction of Industry:
Electricity in the United States: 1880-1925
Director: Mark Granovetter

The vigorous stream of work in recent years on the sociology of the economy has focused especially on relatively high or low levels of aggregation--such as the role of government, or the motives of individuals and firms. With a few notable exceptions, middle levels of aggregation, such as the sociology of industry, have not been targeted for close attention. Neoclassical economics presents a well-developed theory of industrial organization, in which the structure of an industry results from the nature of the product, the existing technology (as reflected by production functions), cost curves, and the contours of consumer demand. Sociological amendments or alternatives to this conception should be rooted in a coherent conception of how people and organizations combine to produce goods and services. One way to develop such a conception is to focus in detail on a single important industry from its inception, and show that in addition to technological and economic constraint, the structure of the industry results also from the mobilization of resources by concerned individuals, operating through their network of colleagues and competitors.

We have pursued such an investigation of the electricity industry in the United States for the last seven years. The study has amassed considerable qualitative evidence that several defining features of the industry as it developed from 1880 to 1925 were not inevitable, and were in fact heavily contested. These include: 1) separation of the production of generating equipment from that of electricity; 2) the provision of electricity by central stations, over long distances, as opposed to small-scale (isolated) generation in each home and business; 3) dominance of the industry by investor-owned rather than municipally-owned companies; 4) the integration of generation, transmission and distribution in single companies--in effect, merging wholesale and retail provision of the product; and 5) the development of huge holding companies, integrating the provision of electricity by many smaller companies, over large geographic areas.

The evidence suggests that these patterns were gradually but purposefully constructed by a focused network of individuals originally associated with Thomas Edison and his protégé Samuel Insull. In the course of amassing qualitative evidence from archives and secondary sources, we have unexpectedly found large amounts of previously unanalyzed or completely undiscovered quantitative data, such as comprehensive annual or even quarterly directories of all utility companies in North America, detailed proceedings of two trade associations meetings, as well as numerous sources on the thousands of individuals who were decision-makers in this industry.

This project will gather these data and use them for several interesting analyses: studies of the evolution of interlocking directorates over time, coordinated with studies of how the industry reached its highly concentrated 1920s form; analysis of the role of equipment suppliers, to understand how they became clearly separated from producers of electricity and how the industry became a duopoly (General Electric and Westinghouse); network analysis of individuals in the industry, through information provided in trade association proceedings and other biographical sources; study of the movement over time of individuals among organizations, and how this movement enhanced consensus in the industry and shaped social networks.

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