2 Answers | Add Yours
In 1917 the Congress temporarily converted the United States from a market economy (where the consumer decides what will be produced) to a partial command economy (where the government plans and makes economic decisions). This cause for this shift in the economy was America's involvement in WWI. To pay for the war Congress also raised taxes and authorized several bond drives. These economic changes would impact the early 1920's, when after the war the government was converting the economy back to a market system.
As production of war materials slowed people lost jobs. In addition, the military returned home adding to the unemployment.These factors contributed to an economic depression (contraction). After the post-war contraction subsided the economy began to improve. Business operations increased leading to a new industry; advertising.
Advertising was responsible for creating the modern concept of consumerism. New goods such as washing machine, automobiles, make-up for women became assessible to the average person becaues of the development of consumer credit. The 'buy now, pay later' concept was born during the 1920's. In addition, the speculative boom in an unregulated stock market sent the country in a buying spree. Unfortunately, by the end of the decade the economy slowed again and the consumer was left with debt it couldn't pay and stocks that had lost much of their value. The lethal combination led to one of the worst economic depressions in the country, the Great Depression of the 1930's.
Between WWI and The Great Depression there was a time of prosper, called the "inter-war" years. Men came home from war and there was demand for jobs. People spent more money on leisurely things like going to the movies or going out to dinner. Prohibition was also going on during this time and "moonshiners" were making good money making alcohol and selling it illegally. A good book to reference for this time period is "The Great Gatsby"
We’ve answered 317,631 questions. We can answer yours, too.Ask a question