The Boom Before the Crash: The 1920s, Essay Example

Introduction

As certainly as the Wall Street Crash of 1929 triggered a global Depression, so too did the immense expanse and development of industry in the United States generate boom years of an equally unprecedented nature.  With the industrial revolution firmly in place, the stage was set for a variety of enormous forces to come together and create an economic growth of impressive proportions.  With industry came jobs, with the jobs and the factories came the increased presence and impact of the cities, and the new employment opportunities led in turn to all the other commercial concerns needed to meet the needs of the massive working class.  Enhancing the prosperity was a government as eager as its citizens to expand all economic possibilities, and to a reckless extent.  In essence, the 1920s “roared,” but it was a cry destined to end with the crisis of the Depression.

Discussion

If any one word might describe the economy of the United States in the 1920s, it is aggressive.  In the decades preceding, several forces had come together to create a new social and commercial landscape.  To begin with, and crucially, the immense tides of immigration from the late 19^th century, actually beginning to wane under new constraints in place by 1920, had generated two enormous factors: a vast increase in population and the increased importance of the cities.  New York City alone grew from a population of one million in the 1860s to on nearing seven million by 1920.  In little time, half of all workers in New York, Chicago, and Detroit were of immigrant origin, which also reflects how native-born Americans were moving into the West and suburban arenas (Muller, 1994,  p. 73).  In plain terms, a great part of the “roar” of the 1920s was the collective voice of many millions of new Americans.

This was obviously a population supplying, not only labor, but need.  The many millions of new workers required housing and other basic goods, of course, but the economic boom of industry during these years created other types of consumerism.  Essentially, industry rose in proportion to both the availability of the new workforce and the consumerist ambitions of that workforce itself.  For perhaps the first time in American history, and largely due to the transition from an agricultural to an industrial economy occurring in the prior decades, the mainstream workforce enjoyed something never before known: discretionary income, if of modest proportions.  Then, and importantly, American workers on a large scale were suddenly buying stock options in the companies employing them, which generated more income and senses of commercial entitlement (Rees, 2013, p. 117).  It was very much a decade of exponential growth at unprecedented levels.

A major factor behind this growth was the role of the government.  Prior to the 1920s, the American economy had been under the influence of a strict force: government regulations. World War I had created this perceived urgency, and the government involved itself directly in business concerns to promote the war effort and ensure stability.  For example, the railroad industry was under close scrutiny to see that troops and necessary supplies were being moved efficiently.  The end of the war brought with it an immediate – and not well-planned – reversal of this control.  As has been noted, by 1920 all the government controls were abruptly ended, and Americans responded with desires for goods just as strong as had been their watchfulness during wartime.  The equation was simple and direct; as the government regulations on productivity disappeared, businesses of all kind emerged and flourished to satisfy the consumer appetites of a nation eager for cars, housing, and all the other goods limited during the war (O’Neal, 2009,  pp. 35-36).  The first year of the decade was truly a commercial “roar.”

Problems soon developed, however.  The immense demand for goods translated to sudden surges in inflation, which in turn led to labor union unrest.  As workers went on strike for higher wages to meet the inflationary prices, the cycle was complete; stopped production created even greater inflation.  To address this and other issues, the Harding administration focused its attentions on how to better regulate the peace-time economy.  To that end, Harding appointed Andrew Mellon, industrial giant, to the office of Secretary of the Treasury.  In very little time Mellon directed government policy to favor big business, vastly reducing taxes on corporate income.  Mellon also streamlined the government’s own budget, eventually paring it down from $6.4 billion in 1920 to $2.9 billion in 1927.  On the national front, the new, pro-business policies were working, and the tax cuts greatly stimulated new businesses (O’Neal, 2009,  pp. 37-38).  If this effort would in time lead to carelessness triggering the Depression, it created for 1920s America the first decade of “roaring,” unbridled consumerism.

Conclusion

If it is a generalization to identify one decade as representing any specific kind of behavior or development, it is nonetheless reasonable to categorize the 1920s as “roaring.”  The sudden absence of government regulation, soon replaced by an intensely pro-business administration, combined with the factors of industrialization and an immense immigrant population to create what was essentially a different nation.  By the decade’s end, the “roar” would be silenced, but the reality remains that, for most of the 1920s, the United States enjoyed its first identity as a society fully committed to mass consumerism.

References

Muller, T.  (1994).  Immigrants and the American City.  New York: NYU Press.

O’Neal, M. J. (2009). America in the 1920s.  New York: Infobase Publishing.

Rees, M.  (2013).  Industrialization and the Transformation of American Life: A Brief Introduction.  Armonk: M. E. Sharpe.