S5 — margin flow and 7 chains (electricity)

Sankey: annual profit pool P4 (~1925, $M, normalized in S4) — segment → who captured the margin. Flow color = segment margin.

Profit flow P4 ~1925

Who paid for what → where the margin settled

high marginmediumlow (commodity)recipient

Reading: the largest P4 flow is financial capital/holding ~$80M (but it collapsed in 1932). Those who held on durably: GE (electrical equipment + lamps ≈$65M), land developers ($60M), ALCOA, RCA/broadcasting. Commodities (copper/coal, in gray) — there is volume, but the margin is thin, and what exists sits in refining (ASARCO). Labor and the carrier barely participate in the profit flow.

7 chains on the real graph

Brief instantiation (nodes + $ + transfer to your bet)

1 Value DAG: faraday→dynamo→ac_system→comed[metered]→{lamps,aluminum}. The money is with the model + the patent, not with the theory. ★ Takeaway: aim at the S4 model + the complement.

2 Supply: copper→ASARCO[refining]→wire→hv_transmission; coal→power station. ★ Takeaway: own the processing chokepoint, not the raw material.

3 Value + margin: equipment $60M(GE), lamps $15M(hi), generation $45M(capped), holding $80M. ★ Takeaway: turnover ≠ profit; recurring complement.

4 Creating the consumer: S.S.Columbia(1880)→theaters→Morgan's home→the masses (30%→70%). ★ Takeaway: the first customer = a business with a pain point.

5 Margin / forms: isolated→utility→holding(collapse −$750M); GE→EBASCO vendor finance. ★ Takeaway: leverage delivers the peak and kills.

6 Labor: UMW/WFM/electricians(IBEW)/engineers. Labor = payroll, not margin. ★ Takeaway: the army of implementers is a channel; the profit is in the asset.

7 Waves: electrolysis→ALCOA($20M); elevator/traction→land($60M); triode→radio→advertising (margin migrates into information). ★ Takeaway: adjacent asset + migration into information.