What conditions made a consumer economy possible in the 1920s?

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enotechris's profile pic

enotechris | College Teacher | (Level 2) Senior Educator

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The US economy experienced the "Roaring Twenties" primarily because of World War I.  Europe and its various empires had been destroyed or severely damaged by the war; the nascent American Empire remained unscathed, and the industrial production that had expanded during the war to manufacture war materiel shifted over to consumer goods, not only domestically but internationally.  The US remained a net exporter for decades after. Although the US did not fight until the spring of 1917, for a good part of the war, US production had been ramping up to supply England and France.  A vaster consumer economy dominated by the US, occurred after World War II remaining in place throughout the 1950's and 1960's.

 

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The main conditions that made this possible were rising incomes, especially among the middle class (which was expanding itself) and a new revolution in manufacturing that was making consumer goods much more affordable.

The middle class was expanding, largely due to the number of white collar jobs that were being created in the large companies.  However, even manufacturing workers were getting somewhat better pay.

At the same time, innovations like the assembly line made it easier to mass produce consumer goods.  This allowed their prices to drop and made them more affordable.

brettd's profile pic

brettd | High School Teacher | (Level 2) Educator Emeritus

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First of all, in the 1920s we had a large and vibrant middle class for the first time in our nation's history.  Factory jobs like in Henry Ford's auto plant paid well, and the number of factories exploded for all kinds of manufactured goods.  Ford's assembly line methods made these items cheaper and more affordable for the middle class, so sales of all items was very high.  This was your consumer economy.

 Another factor that led to this economy was financing called installment plans, where for the first time, consumers made monthly payments for more expensive items.  Now they could afford homes, cars, radios, washing machines and record players.  The availability of these items, installment payment plans and middle class jobs are together what led to the consumer economy of the 1920s.

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