20--2-2024-grade-11-topic-2-capitalism-in-the-usa-1900-to-1940

Topic: Capitalism in the USA 1900 to 1940

Great Depression and Crisis of Capitalism

• The Great Depression brought about a crisis within capitalism in the USA.

• Discussion on Roosevelt's New Deal criticized as introducing socialism.

• State intervention aimed at job creation and social welfare questioned the foundations of capitalism.

Nature of Capitalism in the USA

• Key Characteristics:

  • Entrepreneurial and competitive atmosphere.

  • Rugged individualism celebrated as a cornerstone of American capitalism.

  • Free market principles with minimal state control over business (laissez-faire).

  • Absence of price or wage controls allows economy to self-regulate.

  • Growing concerns about immigration led to restrictions via Immigration Act.

Economic Boom of the 1920s

• Strengths in the Economy:

  • Laissez-faire policies facilitated rapid industrial growth,

  • Rise of mass consumer goods industries, including automobiles and entertainment.

  • Expansion of the stock market and advertising industry.

  • Increased agricultural mechanization contributed to wealth generation.

• Weaknesses in the Economy:

  • Laissez-faire policies contributed to monopolies, price fixing, and wage suppression.

  • Overproduction hurt wage growth, leading to consumer debt and financial instability.

  • Decline in coal industry jobs due to oil and natural gas overuse.

  • Wealth concentrated within a small elite, exacerbating economic disparities.

Republican Impact on the Economy in the 1920s

• Policies led to increased child labor and female employment.

• Government limited in powers and slow to intervene in labor disputes.

• Tax benefits favored the wealthy while agriculture faced decline from market saturation.

Impact of Stock Exchange in the 1920s

• Stock market speculation became rampant, leading to financial instability.

• Many investors lost substantial amounts when share prices fell drastically.

Society in the 1920s

• The Roaring Twenties characterized by cultural shifts: jazz, wild parties.

• Social changes included women's newfound political power post-1920 voting rights.

• Persistent social issues included racial tensions, discrimination against immigrants, and crime related to Prohibition.

Wall Street Crash of 1929

• Triggered by panic selling and lack of regulation.

• Immediate causes cited include absence of safeguards in banking and stock trading.

• Resulted in widespread bankruptcies and financial ruin for many.

Economic Impact of the Great Depression

• By 1933, national income fell by 50%, and 25% of the workforce was unemployed.

• Spiral of decreasing consumption further aggravated the economic downturn.

Social Impact of the Great Depression

• Widespread unemployment led to homelessness and poverty.

• Increase in suicide rates and social stigma attached to poverty.

• Limited government intervention under Hoover led to inadequate relief measures.

Election of Franklin Delano Roosevelt (FDR)

• Roosevelt elected in 1932, promising New Deal policies.

• Focus on Relief, Recovery, and Reform to stabilize and rejuvenate the economy.

First New Deal (1933-1935)

• Aimed at restoring confidence through swift legislative action and providing immediate relief.

• Key initiatives included:

  • Emergency Banking Relief Act to restore trust in banks.

  • Civil Works Administration for job creation.

  • Agricultural Adjustment Act (AAA) to stabilize crop prices.

Second New Deal (1935-1936)

• Focused on tackling mass unemployment and providing social security measures.

• Key initiatives:

  • Works Progress Administration (WPA) for public jobs.

  • Social Security Act providing pensions and unemployment benefits.

Opposition to the New Deal

• Criticism from both left and right, with concerns about socialism and government overreach.

• Southern Democrats opposed to reforms benefiting African Americans.

Assessment of the New Deal

• Strengthened U.S. capitalism by restoring confidence and addressing abuses of unregulated markets.

• Weakened capitalism by increasing expectations of government involvement in social welfare.

Legacy of the New Deal

• Improved lives of many but did not fully end the Great Depression.

• Marginalized African Americans largely excluded from benefits.

Outbreak of World War II and Economic Recovery

• Economic recovery was spurred by wartime production and jobs.

• Increased industrial output led to improved employment rates and economic stability.

Global Impact of the Great Depression

• Economic turmoil led to governmental change and militarization in Germany and Japan.

• Increased intervention in economies seen in the USA and Britain.

• Countries relying on raw product exports faced severe economic declines.

Conclusion: The Cyclical Nature of Capitalism

• Capitalism characterized by cycles of boom and bust.

• Previous economic hardships compounded the difficulties of recovery during the Great Depression.