Necessity, the mother of invention.

Almon Strowger started life as an ordinary man. Born in 1839, Almon fought in the American Civil War and ended up as an undertaker in Kansas Cty. From these humble beginnings though, he was to become a crucial cog in the machine that became the iPhone.

We have blogged before, here about the predictions that AI will take over several job sectors, making millions of people redundant. Many people are in denial at the moment, but ChatGPT 2 had the processing power of a Honey Bee brain, ChatGPT 4 had one of a Squirrel and some researchers think that it will have one of a human by 2037. In the past, big developments in technology such as the invention of the steam-powered loom have met with violent uprisings such as the Luddites.

The difficult part is to predict what jobs will be lost and give those workers alternative work. The reason it is important to do this, is that technological change has always made us wealthier and created new work, but it is always slow and uneven. In some cases this has lead to whole parts of the country, trapped in grinding poverty. From an investment point of view it is also important to try to understand what sectors will change this radically, as this will effect returns for those companies.

In Almon Strowger’s time a large part of the female workforce, worked in the large telephone exchanges. In those days, you called the operator and asked to be connected to another person. The operator would physically connect a circuit to connect your phone line to the line of the person that you wanted to talk to. It was a good job for young women of the time in America and led to other office based jobs.

The specific problem for Almon was that there was at least one other funeral director in Kasas City and that funeral director’s wife worked at the telephone exchange. When callers phoned for Almon, his competitor’s wife would direct the caller to her husband’s business, instead of connecting them to Almon. This was a big problem for Almon who was losing increasing amounts of business as the Telephone as a technology, became more common.

So what did Almon do?

Almon Strowger the funeral director, invented the automatic telephone exchange switch. He patented it and called it the Strowger switch. His single invention wiped out every single telephone operator’s job within a few years and solved the problem of the lost funeral business.

New technological invention is not smooth and gradual. It tends to come in bigs leaps like the Strowager switch, followed by slower consolidation. It looks as though AI will continue its leaps forward and wipe some jobs out but it will be lumpy and unpredictable. We can’t ignore it, we need to keep an eye on developments.

As for Almon, well he sold his patents in 1898 for the equivalent of about $330,000 today. He returned to being a funeral director and when he died, 4 years later, was moderately wealthy. These same patents were sold on to Bell systems just 14 years after his death, for the equivalent of $63,000,000. We don’t know if he was happy with the balance of his life but we do know from her complaints after his death, that his widow Susan certainly wasn’t.

Leave a Reply

Discover more from Altor Wealth

Subscribe now to keep reading and get access to the full archive.

Continue Reading

Scroll to Top
%d bloggers like this: