Economy+in+1920s

The introduction of easily attainable money marked the 1920's as a period of booming economic success and immense spending. New economic inventions such as the assembly line, usage of credit instead of savings, and the benefits of electricity created a highly consumerist society that went on spending sprees and lifted the United States economy to one of the the most dominant in the world.

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The invention of electricity opened up a whole new range of businesses opportunities that fed consumerism throughout the roaring 20s. By the late 1920s over 9 million homes had electricity which produced a need for electrical products. With artificial light, American night life was born. New luxuries like night clubs, amusement parks, and bars created a new, broad potential market and promoted spending. This lifestyle fostered lavish spending and introduced new trends to American society which ultimately created a culture of consumerism. Americans were not only trying to gain success in the business world, but were also trying their best to stay up to date on trends in popular society.



Electricity also helped tremendously in increasing the efficiency of factories. During this age, there was a 300% increase in electrical motors in factories, dramatically improving the rate of production. With the introduction of the assembly line by Henry Ford, factories started to produce at unprecedented rates. With more money coming to the big businesses, the workers received an increase in their wages and the prices for products were lowered. Overall, the standard of living was improved and money was flowing easily. However, this trend of producing at extreme rates would lead to their downfall in the Great Depression as the factories were producing goods at a faster rate than the products were being consumed.

The roaring 20's was the decade of new inventions. The new inventions became a foundation for the booming economy and added to the consumerist culture. Household appliances like the radio were standard in the home. Radios were so common and widespread, people did whatever it takes to get one. If people could not afford the radio, they would use credit to pay off the radio over time. People wanted it because it unified the nation together. For the first time all americans were now listening to the same news, music, jokes, interviews, and gossip. Americans coming to together to listen to the news and were able to socialize with each other on a whole new level. In the past, Americans were only able to chat on a local level, but the radio gave them the ability to expand this pastime to a national level. Nearly every American wanted to be a part of this new connected world to follow the latest gossip or hear news.

Cars were a luxury before the 1920s. Until Henry Ford came along, it was only the wealthy that could afford to buy cars. Henry Ford came in with his revolutionary idea of the assembly line and introduced the Model T into the market. The assembly line helped in the mass production of the Model T with efficiency that helped Ford sell his car at a reasonably low price which in turn made cars available to the middle class. The automobile industry's effect were widespread. It promoted highway building, motels, gas stations, vacation resorts, used car dealerships, and helped housing outside the range of the mass transit. The steel, rubber, and gasoline company came to rely on the sales of automobile. The automobile came to replace the railroads. By the end of the decade there was an nearly one car per American family. It was with this new revolutionary idea that businesses started to be able to produce more products at a faster rate and made the products more cheaper. This faster rate of products allowed the businesses to build more factories and make higher wage earnings for their workers.

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Now that radios were in almost every house in America, advertising and marketing went rampant. The radio revolutionized the medium by which the Americans became aware of the new products. It created a culture of consumerism in which people became interested in status and popularity. People who previously weren't able to afford new and popular products were could now buy them using credit: a system where the consumer would slowly pay back their debt. This new way to purchase goods greatly expanded the potential market for companies producing new products. Another revolutionary force in advertising came from the introduction of cars. This resulted in miles of new highway thus increasing traffic. Motorists were recognized and exploited by advertisers. The roadside advertisements allowed Americans to see their products and used propaganda on their billboards to lure consumers.

Throughout the 1920's, the government returned to its lassiez-faire policies and took a back seat in regulating American business. They did not completely return to unrestricted capitalism, but corporations were relatively loosely monitored and courts continued to back their growth. Two 20's presidents, Harding and Coolidge were concerned with reducing taxes as they believed that high taxation would slow the economy. Under Coolidge, the income tax was lowered protecting the interests of the upper-class. Additionally, Coolidge repeatly stopped government interference in private business. Hoover entered the term when the economy was booming, so he felt no need to help big business or help the little guy because he saw that they were both doing tremendously well. He firmly believed that the economy would work itself out, therefore no one needed protection or supervision.

We can see that many of the trends started during the roaring 20s have carried forward into the present day economy. Television has taken the place of radios. Commercials are the billboards of the 1920s and everybody now has cars. Credit Cards are used extensively, and the recent economic crisis can be partially attributed to people buying things and taking loans that they ultimately couldn't afford. Electricity continues to be essential in American daily life. Factories have become increasingly automated as we have seen the introduction of robots that can do the tasks of many manual laborers. In today's economy, new inventions, techniques, and advertising are constantly being introduced to American society fueling a consumerist culture that drives one of the most powerful economies in the world.

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