The Business of America Chapter 20.3 – 1918 - 1928

Guiding Questions: How did the “business of America” change from 1918-1928? What were the long-term affects of the pro-business “spirit of the age”? What were some of the industrial innovations that occurred?

1918-1928 -A “Great Decade?” (Video) https://www.youtube.com/watch?v=VfOR1XCMf7A (0:00 – 4:47)

Pro Business Presidents American Industries Flourish under presidents Warren G. Harding, Calvin Coolidge and Herbert Hoover. All were Republican presidents who favored policies that: Reduced taxes Increased business profits Expanded the use of credit.

The automobile Just as the railroads changed the ways in which Americans lived and worked… so too did the automobile. Garages / Smaller lawns Gas stations, Oil industry Roads Repair shops More!

Urban Sprawl The biggest change came in the distances that people could live from their jobs. Cities began to “sprawl” (spread out) in all directions. Many more cities developed, not just the big ones (Chicago, NYC, Philadelphia, Boston) This is the beginning of suburban patterns of living

The airplane The technology to fly in airplanes was developed in 1907. The technology was used during the Great War. Afterward, the development of the early airplane industry occurred rapidly, initially for the U.S. Post Office to carry mail. Charles Lindbergh and Amelia Earhart became heroes and symbols of the advancing age for their transatlantic flights.

America’s Standard of Living Soars Wages rose People now owned luxuries such as refrigerators, washing machines, etc Car ownership rose Emergence of telephones Can you imagine your life without these luxuries? This was the beginning of hyper-consumerism!

The rise of American Advertising Advertising previously focused on informing people about goods and services. But now… ------------------------------------------------------------------------ Businesses hired psychologists and other professionals to figure out how to convince people to buy things. The result was a change in the way Americans (and eventually, the rest of the world) consumed “stuff”.

Endless Prosperity? The 1920s were called the “Roaring Twenties” because people thought everything was great after the war and that everyone was prospering. Early in the 1920s the economy was prosperous (it was strong and grew quickly). However, there were signs of trouble ahead…

Types of Credit Credit – Buying a good or service without actually paying for it up front. A “promise to pay later.” Installment Plans – Buying things over an extended period using more than one payment. “Five easy payments of $19.99…” is still $100. Buying on Margin – Investing borrowed money with the hope of making money in the stock market. …What happens when you lose??

Trouble Ahead? Increased use of credit was a dangerous practice People wanted to buy as much “stuff” as they could. Things like cars, appliances, and clothes became status symbols (Veblen). People bought more stuff, saved less, and acquired large amounts of debt.

Endless Prosperity? Businesses kept growing larger: producing more goods as quickly as possible. Technology allowed more production while also employing less people. Businesses need people to buy what they make… with MORE goods to sell and LESS people with money to buy them… what do you think happened?

Superficial Most economists and historians say that although the economy looked very good… The economy of the 1920s was superficial. Superficial – Seemingly good on the surface, but deep down it is not.

Tomorrow: We will use the history we just learned about to try to predict the future!

Interdisciplinary Activity Consider that some historians and sociologists say that we now live in a “post-industrial society.” This means that we are in the final stages of the industrial process or have perhaps transitioned into “something else.” What about developing nations? Can we predict what will happen to them by looking at our own history?

Quick timeline: 1890-1919: Progressive Era 1920-1929: Roaring Twenties People are tired of being exploited by wealthy business owners They go on strike… demanding better wages, working conditions, and education. 1920-1929: Roaring Twenties New political atmosphere that supports big business and squashes workers movements Short term: Businesses flourish, standard of living rises Long term: Huge economic crash in 1929

Interdisciplinary Activity: We are going to connect the history we just learned about to the present date. We learned about the 1920s, a period in which the United States was going through changes. People went from a period of labor unrest where they demanded economic and political changes in their society. (1890-1918). This led to the “pro business” 1920s. But what happened next? Watch the video and pay attention to how things work in the American economy today… “Planet Money” makes a T-Shirt -http://apps.npr.org/tshirt/#/title

Writing Activity What might happen if people in Bangladesh, Columbia, and other countries who are currently in their own “industrial revolution” start demanding higher wages and better living/working conditions? What effect might this have on their economy? What effect might it have on the American economy? Relevant information: 20.1 & 20.1 & Primary Source Activity