THE 1920S ECONOMIC AND SOCIAL HISTORY 1
LEARNING OBJECTIVES Discuss the rise of the mass-consumption economy, led by the automobile industry. Explain the elements of economic changes in the 1920s. Describe the changes wrought on the American family in the 1920s. 2
THE BUSINESS BOOM OF THE 1920S Most segments of the US economy experienced growth and expansion during the 1920s. Exceptions were the poor, the unskilled, and farmers. New machines, improved factories, and the process of standardized mass production created a seemingly self-perpetuating cycle. 3
THE CYCLE Standardized mass production (using uniform interchangeable parts) led to The creation and use of better machinery in factories, which led to More efficient and higher levels of production, which led to Increased productivity and higher wages, which led to More demand for consumer goods, which led to MORE STANDARDIZED PRODUCTION And the process begins anew! 4
SOURCES OF THE ECONOMIC BOOM OF THE 1920S Technological improvements caused by World War 1 Labor shortage created a need for labor saving and more efficient machinery. Old industries were stimulated (petroleum, steel) New industries were created (plastics, rayon) Both used petroleum 5
Scientific Management (Taylorism) Analysis of the steps in the manufacturing process Streamlined production, cut costs, increased efficiency. The rapid rise in worker productivity New technology and scientific management increased worker productivity. Workers earned higher wages and became better consumers. 6
Americans developed a psychology of consumption. Consumers had more money to spend and more products to buy. The development of installment buying facilitated consumption of new labor-saving devices. Americans displayed a desire to get rich Conspicuous consumption was prevalent. Radio, motion pictures, and advertising influenced consumer tastes. The automobile was no longer a mere luxury Prices declined, and the use of installment buying made the automobile affordable to more Americans. 7
The relations between the Federal government and big business Businessmen became folk heroes. The ordinary man felt he had the opportunity to participate in prosperity. The social / economic pendulum swung away from progressivism and reform of the economic and social system. 8
GOVERNMENT SUPPORTED BUSINESS IN FOUR WAYS High tariff rates. Protected American businesses from foreign competition. Andrew Mellon as Secretary of the Treasury from 1921 to 1932 Republican administrations and Congress repealed the excess profits tax, a W.W. 1 measure. Corporate and personal income tax rates were reduced. 9
Cutbacks at the Federal Trade Commission Resulted in less regulation of business. Herbert Hoover as secretary of Commerce and later as President He encouraged price fixing by business to keep business profits high. He believed government had a responsibility to help businesses make a profit (remember the selfperpetuating cycle!!) 10
THE AUTOMOBILE IN 1920S SOCIETY 11
ECONOMIC BENEFITS Promoted the growth of other industries. Petroleum, rubber, steel A national system of roads was created. Cars need roads This stimulated the highway building industry. The expansion of the road system caused the created of new service industries. Gas stations, roadside restaurants, motels (motor hotels) 12
SOCIAL EFFECTS The automobile created a more mobile society Cars broke down the distinctions between rural and urban America Cars created new traditions: Sunday drives, going shopping, or seeking entertainment in other towns or cities. Automobiles helped to break down the stability of family life. It was easier for family members to go their own way The automobile helped to break down traditional conceptions of morality. It was easier for children to escape parental supervision. During the 1920s, the automobile came to be seen as a necessity, rather than an economic luxury. 13
14 A DESIRE FOR BYGONE AMERICA
WHAT AMERICANS WANTED.. A nation free from labor problems and racial strife. A nation with fewer foreigners and less immigration. A nation less influenced by imported radical ideologies. A nation more attuned to the tenets of Fundamentalist Christianity A nation with less governmental interference. 15
THE 1920S SAW AN INCREASE IN THE IDEA OF CULTURAL FUNDAMENTALISM All Americans should follow right patterns of thought. A quest for certainty and predictability in social relationships. Human affairs should have order and be familiar, comfortable, and non-threatening. A nostalgia for the non-industrial society of their parents generation. Question: Was this possible in the age of the automobile? 16