How Life Transformed in the 20th Century - and is likely to transform again in the 21st

A curious thing happened through the course of the 20th century: companies shifted their focus from making things to making money.

This may sound cliche but it is important. In 1900, the average home did not have running water, electricity, a car, a radio, telephone, TV, computer, store-bought clothes, frozen food, takeout, aspirin, a refrigerator, microwave oven, canned goods, sneakers, safety razors, shampoo, or credit cards.

Fortunes were made by the various companies able to produce those goods at affordable prices.
And then our curious thing happened: given these companies had gone public, they rather inadvertently created a new product: wealth. If you owned shares of a company that became successful, you could have one of the more curious products of all: financial independence.

Between 1900 and 2000, life expectancy rose from 47 to 77. (And no, this was not all due to infant mortality rates dropping. Your odds of dying at any age - from six months to 20 to 50 to 70 - steadily dropped during the 20th century.) Old age was popularized in the 20th century and retirement was invented.

Pension plans and 401(k) accounts took advantage of decades of compound interest over these newly long lives to create enough wealth to fund retirements. People no longer had to work until they died or rely on the generosity of their children. And of course there is variation in all things and as it turns out, some people don't have enough to retire at 85, some have enough by 65 and some have enough to retire by 45.

At a certain point, more goods have less appeal. Your closet has more clothes than you'll wear, your freezer and pantry has more food than you'll eat, and your garage had more things than you use.
An amazing, unprecedented economy emerged in the 20th century, providing goods that past generations could not have imagined. Of all the goods it made, though, perhaps the most alluring was its promise of financial independence. Of all the things that companies could make that people were eager to buy, wealth ranked highest.

It it difficult to properly understand modern companies if you still understand them as institutions focused on making things. That was largely true a century ago. Now, they are largely focused on making people rich. (What does Google "make?" Well, they have made a lot of people rich.)

Henry Ford became famous for making cars affordable for normal people. Previously, they were something only the very few, very wealthy could afford. The challenge of the early part of this century is to do something similar with companies' most interesting product yet: make ownership of wealth more widespread, more common.