Describe the main aspects of the economic boom in the 1920's.

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Alistair Divorty

USA Coursework Essay – Describe the main aspects of the economic boom in the 1920’s.

During the 1920’s the United States of America enjoyed a boom period in it’s economy, which heavily altered the lifestyles of Americans and the society that they lived in. There were several main aspects of the boom, including the development of the car industry, Hollywood and the movies, the birth of the Jazz Age, the establishment of new freedoms for women and the surge in the manufacture of consumer goods. This essay explores in detail the main aspects of the economic boom, and makes links between them; also demonstrating how economic factors lead to changes in society, and vice versa.

        During the twenties factors such as the mass-produced motorcar not only not only altered the ways of daily life but also resulted in an unprecedented growth in business that established the US as predominant in the world. In 1921 the gross national product was $74 billion, which by 1929 had risen to $104.4 billion. The three presidents of the 1920’s, Harding (1921-23), Coolidge (1923-29) and Hoover (1929-33), were all Republican who supported business and the stock market. They introduced lower taxes allowing business owners to infest profits in their businesses, but also giving them more money to put back into the economy, e.g. to spend on consumer goods. This also led to increased demand for the cars now rolling off the production line, showing how these two factors are linked; they influenced each other. The government also raised taxes on foreign goods so they could not compete with American business (known as ‘protectionism’). The USA also reaped the benefits of it’s position during World War One. America’s economy had not suffered from the First World War; instead it had been strengthened by war production for allies. This is linked to the large amount of money US banks had available during the 1920’s to lend or to invest in new industries. Most of this money came from war profits and interest on loans. Another factor helping to ‘kick-start’ the boom in the US economy was the countries vast amounts of natural resources. Also, power was developed with electricity rapidly taking over from steam power. This could support a vast economy and made the US self-sufficient, one of the reasons the economy was not harmed when other countries retaliated to the American government raising taxes on foreign imports. Economic development and inventions earlier in the 19th century also helped to bring the US to takeoff point.

        In the twenties, there was a substantial growth in production, jobs, profits, wages and therefore a general good standard of living and an emphasis on having fun – “The Age of Excess”. These elements worked in a cycle of cause and effect or supply and demand. The growth in production created many more jobs, and because more people had more money they were able to buy the goods being newly produced. More goods needed to be produced so more jobs and more profits were created. This led to the start of mass production and consumerism in the twenties. For the very first time items such as cars and refrigerators were available and could be afforded by the middle classes, and other industries like advertising became very profitable. People could afford their leisure time and the leisure industries also boomed.

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        Mass production started with the high demand for products, such as Ford cars, that people could now afford. Before 1901, only the very wealthy could meet the expense of a car. It was unthinkable that a farmer or shop girl might own a car. However, this was just what happened during the next twenty years. Between 1909 and 1928, a staggering fifty million Ford Model Ts were built, and cars came within the reach of common people for the first time ever. All this was only made possible by the revolutions in the car industry brought about by Henry Ford, ...

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