Economic Growth in the 1920s

Economic Growth in the 1920s

  • Focus on mass production and consumption of consumer goods.

Causes of Economic Growth

  • Government Policy: Post-WWI shift to conservative politics and reduced income tax (from 70% to 20-25%) facilitated growth, benefiting big business.

    • Introduction of the American Plan to weaken labor unions.

  • New Technologies:

    • Electrification of homes leading to consumer goods (e.g., vacuum cleaners, refrigerators).

    • Advertising industry growth influenced by psychology, targeting consumer subconscious.

    • Henry Ford's assembly line technique improved manufacturing efficiency, reducing costs for consumers.

  • New Manufacturing Techniques: Assembly line increased production speed and affordability of automobiles.

Effects of Economic Boom

  1. Improved Standard of Living: National income rose by nearly 40%; purchasing power for average workers increased by about 20%. Exceptions included black workers and farmers suffering from debt.

  2. Increased Personal Mobility: Adoption of automobiles (80% ownership in the U.S. by decade's end) and federal road improvements led to suburban migration.

  3. Enhanced Communication Systems: Rise of radio and expansion of telephone networks improved information accessibility and fostered mass culture.

  4. Growing Influence of Mass Culture:

    • Radio broadcasts standardized culture and language; increased awareness of regional differences.

    • Cinema became a widespread form of entertainment, with Hollywood becoming a significant cultural center.