How do you extract money from an idea? You can keep it secret and make sure that other people are reliant upon it. When Samuel Slater, father of the American industrial revolution, came to America, he had to diguise himself as an agricultural laborer. Trained mechanics were not permitted to emigrate from England, lest they share their knowledge and ruin the mercantile system that forced colonies to be importers of processed goods. You can make sure your ideas will be paid for by someone else — John Harrison, inventor of the chronometer, was working for a prize of £20,000. However, it took a personal intervention by George III, more than ten years after Harrison had successfully demonstrated his device, for Harrison to be awarded even a fraction of that. Since 1449, however, the English-speaking world has had another method: the patent. The original goal of the patent system in England was to grant monopolies on trade and manufacture of goods; these royal patents could be for novel inventions, but were not always. (The term "patent" was also used to identify an exclusive license to print a particular text; printer’s patents are useful for research on where the ideas for certain Elizabethan works of disputed origin came from.) Seventeenth-century reforms introduced a patent system similar to today’s, in which monopolies were granted for a limited time solely on new inventions. In the eighteenth century, the patent was considered an important enough concept to be mentioned in the Constitution; in 1793, Thomas Jefferson and a few others sat down and codified what could be patented:
any new and useful art, machine, manufacture or composition of matter and any new and useful improvement on any art, machine, manufacture or composition of matter.
That’s rather a lot of stuff.
The fact that Thomas Jefferson, then Secretary of State, was involved shows just how imoprtant this was to people. Patents, unlike copyrights on written work, were not thought of as primarily about providing money to the inventor. Instead, they were a way of ensuring that inventors would release their knowledge that others might improve on it. (This was the rationale for a number of cases, including Pennock v. Dialogue, in which it was held that patents could not be filed after the invention was publicly used or displayed, the better to encourage inventors to file early and not wait until the competition was catching up with them.) This may seem silly in an age in which Amazon can be granted a patent on one-click shopping (an outcome of the Supreme Court’s recent ruling on business-method patents), but it’s a real concern: the Riemann hypothesis is the most important unsolved problem in complex analysis, and some mathematicians are beginning to worry that glory and a million-dollar prize are hindering collaboration (link provided by Jonah). Jefferson defined a broad spectrum of patentable inventions for the same reason the Constitution gives Congress the right to "promote the Progress of Science and useful Arts": to make America a stronger, richer nation.
"Art, machine, manufacture, and composition of matter" covers just about any physical item the eighteenth century could imagine creating. (One exception was agricultural inventions, as Concord grape breeder Ephraim Bull discovered; he died impoverished, while Thomas Welch devised a profitable means of using Bull’s grapes and became rich man. As Paul Collins notes in his book Banvard’s Folly, Bull’s grave reads, "He sowed. Others reaped.") If you wanted to patent your invention, you had to make it public. That was the deal. So a flurry of nineteenth-century inventors began industrializing America, improving and revising every little thing.
Don’t think about the telephone or vulcanized rubber or the transistor. Think instead of something utterly insignificant. A search on Delphion, IBM’s searchable patent registry, turns up dozens of entries, and that’s only going back to the seventies. Walter Deubner invented the cord-handled paper bag, the kind you might get at Macy’s. Mary Knight (a "prolific female inventor of the industrial era," she received 22 patents) invented the machine that makes the square-bottomed paper bag, the sort you get in a grocery store. Paper bags have a history, and we never notice them except when we’re asked, "Paper or plastic?" Multiply that by a thousand: the paper clip, the zipper, the tea bag. The fruits of human ingenuity are all around us, and they all have a story.