The New Era

Economic Prosperity of the 1920s

• Business Boom: The 1920s were characterized by significant economic growth.
  • Productivity increased by 50%.
  • Unemployment Rates ranged from 4% to 12%.
  • Real Income increased by 25%.
  • Standard of Living Improvements: Indoor plumbing, central heating, and electricity became widespread (2/3 of homes had electricity by 1930).
• Causes of Prosperity:
  • Advances in productivity through scientific management and machinery.
  • Greater utilization of oil and electricity.
  • Favorable government policies, including tax breaks and antitrust regulations.

The Impact of Automobiles and Fordism

• Henry Ford's Innovations:

  • Fordism revolutionized manufacturing processes and consumer habits.
  • In 1913, a car costs two years' worth of wages; by 1929, this dropped to three months' worth of wages.
  • Production speed increased significantly, allowing a new car to roll off the assembly line every 10 seconds.

• Cultural Impact:

  • Automobiles replaced the railroad as the primary driver of economic growth, boosting industries like steel and rubber.
  • Daily life was transformed, enabling commuting, shopping, and traveling.
  • Passenger car registrations skyrocketed:
  • 1913: 1.2 million registered cars.
  • 1929: 26.5 million registered, nearly one per family.
  • Public sentiment: "Every family should have their own car."

Labor Struggles and Economic Insecurity

• Post-WWI, workers faced challenges:

  • Loss of union gains.
  • Rise of open shops (no union membership required).
  • Emergence of company unions and ‘welfare capitalism’ vs laissez-faire capitalism.

• Economic Pressures:

  • Inflation and increased living costs after the war.
  • Difficulty finding jobs for returning soldiers.
  • Workers' demands for higher wages led to significant strikes (e.g. Seattle General Strike, Boston Police Strike).

• Poverty Levels: 40% of U.S. families lived at or below the poverty line by the late 1920s.

Agricultural Challenges

• Farmers faced severe economic hardship:
  • Farming methods advanced (e.g., time to till an acre significantly reduced).
  • Issue of price parity: Should the government guarantee farm prices at pre-war levels?
  • McNary-Haugen Bill (never passed) intended to subsidize farmers; Agricultural Marketing Act of 1929 aimed to tackle surplus crops.

Social Changes and Consumerism

• Consumer Revolution: A surge in new, affordable goods became available.

  • Electric appliances (washing machines, irons) made household chores easier.
  • Rise in consumer debt between 1920-1931.

• Mass Culture:

  • The Jazz Age brought forth a boom in radio and film industries.
  • By 1930, there were over 800 radio stations and 80 million movie tickets sold weekly.

• The emergence of icons such as Babe Ruth and writers like F. Scott Fitzgerald reflected changing social values.

The Harlem Renaissance

• A pivotal cultural movement where African American artists, musicians, and writers celebrated their heritage.
• Jazz and Blues became significant expressions of the African American experience.
• Notable figures: Duke Ellington, Louis Armstrong.
• Influenced race relations and cultural expressions in America significantly.

Cultural Tensions

• Clash of Modernity and Tradition:

  • Prohibition (Volstead Act, 1920) led to the rise of speakeasies and organized crime, reversing the 18th Amendment in 1933.
  • Legal battles such as the Scopes Trial, highlighting the tension between modern scientific ideas and traditional beliefs.

• Xenophobia and Racial Unrest:

  • Anti-immigrant sentiment grew in response to the influx of Southern and Eastern European immigrants.
  • Nativist movements gained momentum, culminating in laws like the National Origins Act (1924) that restricted immigration.

The Stock Market Crash and the Great Depression

• Concerning signs in 1929 led economists to suspect the stock market was overinflated.
• Excessive speculation caused market volatility.
• The crash initiated the Great Depression, with high unemployment levels lasting until 1941.
• The market crash accelerated the economic downturn, deepening the recession.