Capitalism, The American Dream, and The 1920s

Key Features of Capitalism

• Private ownership of resources (land, mines, factories, etc.); profits go to individuals, but individuals also carry the costs if their businesses fail.
• Little government interference in the economy; free-market economy based on competition between individuals and companies.
• Emphasis on private services (for example, medical services, the education system); wide variety of goods and services available to those who can afford them; people have more choice.
• Belief that competition is healthy and leads to economic growth.
• Possibility of success or fear of failure pushes people to work hard to excel and invent new ways of doing things.
• Freedom from government control and the rights of the individual are seen as more important than equality.
• Opportunities to make money, but uneven distribution of wealth; great gap between rich and poor.

The American Dream

• The United States was seen as the land of opportunity, where anyone could make a success of their lives, attracting millions of immigrants.
• Immigrants came because jobs were available, wages were higher, there were more opportunities to set up their own businesses or make a fortune, and there was greater freedom.

The 1920s

• Republican economic policies, favored by many leaders, included:
  • As little interference as possible in big cut production.
  • Low taxes to encourage wealth.