Economy of the 1920s Consumerism.

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Presentation transcript:

Economy of the 1920s Consumerism

Essential Questions What was the economy like in the 1920s? How did it get that way? What was the result? What was consumerism? Did it work? How did the economy of the 1920s have an effect on America? What does it mean to be an American in the 1920s

Definition Belief in benefits of consumption: the belief that the buying and selling of large quantities of consumer goods is beneficial to an economy or a sign of economic strength

How did it work? Mass production Mass Marketing Consumer Culture Consumer goods appear in the household Electricity Invented: electric washing machine and vacuum cleaner(1903), Ford’s Model T (1908), refrigerator (1913) Mass Marketing The department store (Wannamaker, Marshall Fields, Woolworth, Sears etc.) Advertisements Builds demand Consumer Culture This is a culture that views the consumption of large quantities of goods as beneficial to the economy and a source of personal happiness.

How did it work? Creation of consumer credit Buy now, Pay later Expansion of credit Buy something with borrowed money, and pay back later (loans over time) Installment paying Make a down payment, pays back loan in monthly payments

Mass production WWI Technology increased Europe was in ruins People went off to war Jobs were vacated Production was increased Unemployment dropped, dramatically (too much) Technology increased Assembly Line (Ford) War technology Europe was in ruins America was fruitful There was money to be made

Mass Marketing “Machine gun theory” People had enough to get by, but companies still needed to make money How are people supposed to know they “need” something if they don’t know it exists? Department stores broadcast advertisements to as many people as possible, neglecting “target demographics” and other potentially limiting factors.

Mass production Businesses were operating well and making lots of money People had jobs, and $$$ Europe, started to get back on its feet

The Middle Class Average income hence, middle Large, in number of people Some luxury items (non-necessities) Industrialization Unionization

Innovation & new Industries Henry Ford, assembly line Highway construction Restaurants/hotels Gas stations/car repair Airplanes and radios

Big Business Prospering and growing Consolidation Holding companies Merging or combining of two businesses Republican presidents didn’t mind – said it helped economy Ford, General Motors, Chrysler Holding companies Corporation that owns or controls other companies by buying their stock Electricity price goes down Grocery stores on the rise

How do Banks work? Deposits Loans Interest Investment Few big loans vs. Many small loans

The Result? Mass Production Mass Marketing Mass Lending (Credit) What impact does this have on 1920s society? Temporarily suspend any conclusions about what this means for the 1930s

LACK PANTS L – Laissez-Faire A – Assembly Line C – Credit K – Knowledge P – Position A – Advertisements N – New Consumer Goods T – Tariffs S – Share Confidence

Stock Market http://www.loveinfographics.com/categories/business-finance-infographics/how-the-stock-market-works-infographic