Was pre-war capitalism solely responsible for America's prosperity in the 1900s?

Expert Answers
mkoren eNotes educator| Certified Educator

There were many factors responsible for our prosperity in the 1900s. I will focus on the prosperity of the 1920s and the 1950s since you are referencing a pre-war time period in your question.

There are similarities to the prosperity of the 1920s and the 1950s. In both time periods, there was a great deal of demand for products due to the sacrifices people made during World War I and during World War II. Many products weren’t being produced, and others were in short supply. When the wars ended, people felt more confident about spending. They also wanted to buy various products because they postponed those purchases during both world wars.

Government policies also helped promote prosperity after each war. In the 1920s, the government got out of the way of businesses. With a policy of laissez-faire, businesses were free to do many things. Many new products were invented during this time. Because of these factors, more jobs were created, people had more money to spend, and they also had more free time. This helped boost our economy significantly. After World War II, the government passed the GI Bill of Rights. The GI Bill of Rights gave soldiers loans to go to school, to build houses, and to start businesses. This also led to significant economic growth and prosperity.

Our capitalist economic system was also a factor in the prosperity of the 1920s and the 1950s. With the marketplace determining price and supply and with limited government involvement in the economy, we were able to enjoy times of prosperity. However, it wasn’t just our capitalist economic system that allowed this prosperity to occur. Other forces had to be in effect to help promote the prosperous time. With a pent up demand for products, with government policies that encouraged economic growth, and with the freedoms available in a capitalist economic system, our economy grew significantly, and we experienced a great deal of prosperity after World War I and after World War II.