KS

1920s: Innovations in Communication and Technology

Manufacturing and Technology

  • Driven by mass production, mechanization, and scientific management
  • Electricity replaced steam
  • The U.S. produced 40% of the world’s manufactured goods
  • Average output per worker increased by 32%, wages increased by 8%

Developing Industries and Technologies

  • Automotive
    • Moving assembly line
    • Ford Model T for $290
    • Competitors were General Motors and Dodge
    • Increased demand for steel and oil
    • Fordlandia in Brazil
  • Petroleum
    • New refineries to meet demands of gasoline
    • Necessary to make synthetic rubber for tires
  • Aviation
    • Increased demand and innovation from WWI
    • Air mail and commercial flights
  • Electrical appliances
    • Washing machines, refrigerators, vacuum cleaners, ranges
    • General Electric
  • Chemical industries
    • Development of synthetics such as rayon and cellophane
    • DuPoint

Welfare Capitalism

  • Provides incentives and benefits to appeal to good will of workers leading to higher productivity
    • Kept them happy and loyal
    • Yellow-Dog Contracts kept workers from unions
  • Personnel management
    • Controlled the “right way” to live
    • Drinking habits, marital relations, spending habits
  • Benefits
    • Life insurance, pension plans, stock-purchase plans, profit sharing
  • Anti-union policies
    • American Plan - open shops
    • Company unions
  • Henry Ford
    • $5 a day compared to the $11 a week national average
    • Higher productivity
    • Workers could afford products

Stock Market and Business Profits

  • Buying on margin
    • Investing with borrowed money
    • Amplifies gains and losses
    • If the account falls before the maintenance margin, the broker can sell some of all of the portfolio to get the account back in balance
    • Corporate profits increased by 62% and dividends increased by 65%

Economic Growth

  • The economy grew by 42%
  • New construction increased from $6.7 billion to $10.1 billion
    • Power plants, highway projects
    • Motels, service stations
    • Suburbs
  • Real GDP in 1920 at $687.7 billion, $977 billion in 1929
  • Stock market value increased by 20%
  • Inflation remained relatively constant
  • Unemployment remained relatively low

American Agriculture

  • World War I increased prices and profits
    • Golden Age of Agriculture
  • Mechanization and fertilizers increased production
  • European demand decreased
  • Per capita farm income was $273 compared to $681 national average
  • Farm foreclosures increased and new farms declined

Socioeconomics and Standard of Living

  • Standard of living increases
    • Due to mass production and welfare capitalism
    • Average income increased by 35%
    • Urban real wages increased by around 20%
    • Disposable income increased allowing for more indulgence in consumer culture and entertainment
  • Socioeconomics
    • Top 1% owned 23.9% of national income
    • Top 0.1% owned as much as the bottom 43%
    • 80% of Americans had no savings
    • Top 0.1% owned 34% of savings
    • 60% of Americans lived under the poverty line earning below $2000

Mass Consumerism

  • Mass production of consumer-durable goods
  • New Marketing strategies and innovations
    • Use of psychology
    • Appeal to needs and desires and anxieties
    • Radio broadcasting
  • Consumer debt
    • Installment plans
    • Credit cards
  • Radio and film
    • ex. The Jazz Singer