But that all changed in 1856, with a discovery by an 18-year-old English chemist named William Henry Perkin. Tinkering in his home laboratory, Perkin was trying to synthesize an artificial form of quinine, an antimalarial agent. Although he botched his experiments, he happened to notice that one substance maintained a bright and unexpected purple color that didn’t run or fade. Perkin, it turned out, had discovered a way of making arguably the world’s most coveted color from incredibly cheap coal tar. He patented his invention — the first synthetic dye — created a company and sold shares to raise capital for a factory. Eventually his dye, and generations of dye that followed, so thoroughly democratized the color purple that it became the emblematic color of cheesy English rock bands, Prince albums and office chairs for those willing to dare a hue slightly more bold than black.

Perkin’s fortuitous failure, it’s safe to say, would have never occurred even a hundred years earlier. In pre-modern times, when starvation was common and there was little social insurance outside your clan, every individual bore the risk of any new idea. As a result, risks simply weren’t worth taking. If a clever idea for a crop rotation failed or an enhanced plow was ineffective, a farmer’s family might not get enough to eat. Children might die. Even if the innovation worked, any peasant who found himself with an abundance of crops would most likely soon find a representative of the local lord coming along to claim it. A similar process, one in which success was stolen and failure could be lethal, also ensured that carpenters, cobblers, bakers and the other skilled artisans would only innovate slowly, if at all. So most people adjusted accordingly by living near arable land, having as many children as possible (a good insurance policy) and playing it safe.

Our relationship with innovation finally began to change, however, during the Industrial Revolution. While individual inventors like James Watt and Eli Whitney tend to receive most of the credit, perhaps the most significant changes were not technological but rather legal and financial. The rise of stocks and bonds, patents and agricultural futures allowed a large number of people to broadly share the risks of possible failure and the rewards of potential success. If it weren’t for these tools, a tinkerer like Perkin would never have been messing around with an attempt at artificial quinine in the first place. And he wouldn’t have had any way to capitalize on his idea. Anyway, he probably would have been too consumed by tilling land and raising children.

Perkin’s invention may have brought cheap purple (and, later, green and red) dyes to the masses, but it helped upend whatever was left of the existing global supply chain, with its small cottage-size dye houses and its artisanal crafts people who were working with lichen and bugs. For millenniums, the economy had been built around subsistence farming, small-batch artisanal work and highly localized markets. Inventions like Perkin’s — and the steam engine, the spinning jenny, the telegraph, the Bessemer steel-production process — destroyed the last vestiges of this way of life.

The original age of innovation may have ushered in an era of unforeseen productivity, but it was, for millions of people, absolutely terrifying. Over a generation or two, however, our society responded by developing a new set of institutions to lessen the pain of this new volatility, including unions, Social Security and the single greatest risk-mitigating institution ever: the corporation. During the late 19th century, a series of experiments in organizational structure culminated, in the 1920s, with the birth of General Motors, the first modern corporation. Its basic characteristics soon became ubiquitous. Ownership, which was once a job passed from father to son, was now divided among countless shareholders. Management, too, was divided, among a large group of professionals who directed units, or “subdivisions,” within it. The corporation, in essence, acted as a giant risk-sharing machine, amassing millions of investors’ capital and spreading it among a large number of projects, then sharing the returns broadly too. The corporation managed the risk so well, in fact, that it created an innovation known as the steady job. For the first time in history, the risks of innovation were not borne by the poorest. This resulted in what economists call the Great Compression, when the gap between the income of the rich and poor rapidly fell to its lowest margin.