Thomas Edison, one of history’s most celebrated inventors and often called the “Wizard of Menlo Park,” gave the world countless innovations, none more symbolic than the modern light bulb. Before Edison’s improvements, light bulbs existed but were notoriously unreliable and prohibitively expensive.

Through relentless experimentation, Edison transformed the bulb, making it both affordable and dependable. He worked tirelessly, creating a vacuum inside the bulb and searching for the ideal filament. Edison reportedly tested up to 6,000 materials, each attempt bringing him closer to success. As he famously said, “I have not failed 10,000 times — I’ve found 10,000 ways that will not work.”

In a world where success is highly valued, many crave a guarantee of achievement in everything they pursue. Yet, reality often proves that failure is an invaluable teacher. Educators frequently observe that students who initially stumble in problem-solving benefit significantly from analyzing their errors. By dissecting their mistakes step by step, they not only find the correct answers but also improve their critical thinking skills.

Colin Seale, an educator and lawyer, underscores this value, saying, “Students cannot develop into critical thinkers if they regularly freeze out of fear of making a mistake.” Learning from errors, Seale argues, is essential for students to evolve into skilled problem solvers and thinkers.

This process requires innovation, as problems are rarely solved by merely repeating past errors. Progress demands fresh minds and novel approaches. Often, however, cultural and regulatory systems cling stubbornly to old methods, resisting necessary change even when failures are evident.

The same dynamic applies to economic challenges. Innovators often pose a threat to established interests, and those invested in the status quo may go to great lengths to stifle them. Disruptive innovations risk rendering legacy practices obsolete. For instance, in many regions, telephone service has long moved beyond the need for outdated overhead wires.

In the U.S., telecommunications reform began under President Jimmy Carter, with President Ronald Reagan advancing these efforts. At that time, the market was monopolized by “Ma Bell,” which resisted deregulation, claiming it would ruin service. Instead, the policy shift ignited innovation. Nobel-winning economist Milton Friedman championed a similar philosophy in economics, asserting, “What we have is NOT a profit system, it’s a profit and loss system. The loss part is just as important as the profit part.” For Friedman, failures play an integral role in fostering economic advancement alongside successes.

Every business venture is a calculated risk, combining labor and capital with the hope of creating a product more valuable than the sum of its parts. When successful, this process yields profit. However, losses play an equally crucial role by highlighting inefficiencies and prompting businesses to improve or exit the market. Edison’s discarded filaments are a fitting metaphor for these necessary lessons in failure.

Losses serve to discipline misguided entrepreneurs while rewarding those who create value. In a free market, the entrepreneur bears the financial risks, gambling with their own resources rather than imposing costs on the public—unless, of course, political intervention distorts this balance. In a depoliticized market, entrepreneurs must rely on their own capital or attract private investors willing to share the risk.

This balance is disrupted in state-owned enterprises, where taxpayers are forced to bankroll ventures that may continue to lose money, deepening economic burdens. Without the discipline of profit and loss, inefficient projects not only persist but often expand, consuming resources with little regard for value creation.

As Friedman noted, “If an entrepreneur’s project doesn’t work, he closes it down. If it had been a government project, it would have been expanded, because there is not the discipline of the profit and loss element.” Political influence typically sustains failures, draining economic resources that might otherwise be directed toward innovation and growth.

Ultimately, political manipulation rarely generates wealth. Instead, it frequently props up failing industries, sapping national prosperity and stifling progress. The survival of a failing airline, an outdated telecom monopoly, or an ineffectual power provider comes at a high cost, depriving society of both innovation and economic vitality.

Edison’s journey with the light bulb exemplifies how loss—while often painful—is indispensable for growth. Just as Edison’s “failed” filaments led to a world-changing invention, losses in a market economy guide progress, revealing paths that don’t work and lighting the way toward those that do.