1945-1975 Economic change and developments: the rise of the consumer society and economic boom Flashcards
Why did the USA experience prosperity in the years after the Second World War?
Per capita income at $1,450 was almost twice as high as Great Britain. Urban Americans consumed about 3,000 calories per day, about 50 per cent more than most people in Western Europe. The federal government spent more - $36.5 billion in 1948, admittedly significantly less than the $92.2 billion expended in 1945 but considerably more than the $9.4 billion of 1939. This figure was to rise significantly in 1950 with the onset of the Korean War and a massive defence budget in the 1950s and beyond. States, meanwhile, spent more on roads and schools.
Economic expansion created greater employment opportunities in many industries, for example aircraft production, chemicals and electrical goods. As consumer tastes changed, processed food production made huge gains. Tobacco companies made vast profits and employed many people. As we will see, there was a huge migration to centres of plentiful employment.
Many Americans remembered the pre-war Depression, however, and, despite the prosperity, many on average earnings of about $3,000 per annum or below tended to live carefully and save where they could. While consumption rose it was not necessarily conspicuous or wasteful - at least not until, by the late 1940s, it became apparent that the prosperity was going to last. Then the consumer boom gathered apace.
One should note, too, that not all areas of the USA were equally prosperous. Some had a lot of catching up to do. These were mainly in the poorer areas of cities and the South. In 1947, 33 per cent of US homes lacked running water and 40 per cent flush toilets. Many families lived in rented accommodation and could hardly have imagined owning their own property. It was a measure of economic success that by 1960 so many were able to take these things for granted and home ownership had risen from 55 per cent in 1950 to 62 per cent ten years later.
How did the Growing car industry lead to Post-War prosperity?
The spectacular growth of the car industry led to much greater mobility and the development of suburbs. This meant that many Americans no longer needed
to live in crowded towns and cities. The home became very important in terms of privacy and offering a comfortable lifestyle. Even more significantly, it came to symbolise the prosperity of ordinary people because they were owner-occupiers. One day, when the mortgage was paid off, it would be theirs. They weren’t spending their wages on rent but investing it in bricks and mortar. It was the lynchpin of the development of the 1950s middle-class family.
Sales of new cars rose from 69,500 in 1945 to 6.7 million by 1950. The vast majority were US-made; in 1950 there were only 16,000 foreign cars on US roads. Clearly this led to a great expansion in the car industry, dominated by the ‘Big Three’ - Ford, General Motors and Chrysler. Cars seemed to symbolise the confidence of the age - they were sleek, gas-guzzling, big and colourful. In 1958, Ford produced a 5.79-metre-long Lincoln model. Choice was paramount, too. In 1961, there were 350 different models on sale. They weren’t cheap - a new Chrysler cost $1,300 or about 40 per cent of the average family income - but most were bought on credit. The number of two-car families doubled between 1951 and 1958. As a result, there were more cars in Los Angeles than in the whole of Asia and General Motors was wealthier than Belgium in terms of GDP.
The growth of car ownership also helped develop the facilities associated with them such as roadside hotels, motels, gas stations and garages. The first Holiday Inn opened in 1952 between Memphis and Nashville in Tennessee. Des Moines, Idaho, saw the first McDonald’s in April 1955; by 1960, 228 McDonald’s restaurants enjoyed annual sales of $37 million.
Road building itself was given a major boost by the 1956 Interstate Highway Act, which boosted federal subsidies for road building and developed the infrastructure of US highways. It created a 41,000-mile system, mainly of dual carriageway, designed to eliminate unsafe roads, bottlenecks and other factors that impeded free traffic movement. Interestingly, the bill was intended to create a national system of interstate and defence highways’ to facilitate speedy evacuation in the event of nuclear attack. However, road building developments also signified the demise of public transport in the USA. Passenger services on railroads lost an average $700 million per year by the mid-1950s (although this was partly due to the growth of long-distance air travel).
To what extent was there growth of suburbs?
House construction away from urban centres had begun during the war years but expanded rapidly in the years thereafter. In 1944, 114,000 new family homes were built, rising to 1.7 million in 1950. In the decade following 1945, 15 million houses were built mainly for private purchase. The percentage of Americans owning their own homes rose from 50 per cent in 1945 to 60 per cent by 1960. Many acquired mortgages through the government-sponsored Federal Housing Administration or Veterans Administration. These offered mortgages of up to 90 per cent of the cost price and interest rates as low as four per cent.
The percentage of people living in suburbs grew from seventeen per cent in 1920 to 33 per cent by 1960. Critics complained that these suburbs all looked the same and lacked variety. Cinema and restaurant managers in urban centres complained of a lack of business as people stayed home. Too often conditions deteriorated in residential inner-city areas as they were left to the poor, often members of ethnic minorities, and they lost funding due to the ‘flight of the middle classes’ who would have paid taxes to live there. The suburbs, meanwhile, saw the development of new facilities such as the shopping mall.
In 1946 there were eight, and over 4,000 by the late 1950s. Here everything could be purchased in one centre arrived at by car. These developments spelled disaster for many small shopkeepers. The development of the suburbs as a result of increased prosperity and car ownership effectively changed the lives of millions of ordinary Americans forever.
How did the consumer boom impact the economy?
There was a rapid expansion in consumer items fuelled by incessant advertising
- itself a multi-billion dollar industry rising from $6 billion in 1950 to over $13 billion by 1963. By 1960, there were over 50 million televisions in the USA.
Due to the boom in population, baby clothes and nappies were in particular demand. By 1957, nappies alone became a $50 million per year industry. In 1980, historian Landon Jones wrote, the cry of the baby was heard across the land’ as their numbers grew. Four million babies were born each year between 1954 and 1964. In 1964 40 per cent of the population had been born before 1946.
This was possibly the golden age of the American nuclear family. The divorce rate fell from 17.9 per 1,000 marriages in 1946 to 9.6 by 1953. The average age of marriage for females fell from 21.5 years in 1940 to 20.1 by 1956 and within seven months of marriage most women were pregnant.
The amount of leisure time rose, too. One commentator reported that by 1956 many Americans were spending more time watching television than actually working for pay. They were filling their homes with labour-saving devices. By 1951, 90 per cent of American families had tridges and 15 per cent possessed washing machines and telephones - often paid for with credit. The amount of debt increased from $5.7 billion in 1945 to $56.1 billion by 1960. The first Diners’ Club cards were introduced in 1950 - made of cardboard. They became plastic in 1955. American Express dates from 1958. Among the new products were frozen and convenience food and IV dinners, long-playing records, electric clothes dryers and Polaroid cameras. All saved time and effort. The introduction of plastics and artificial fibres meant it was easier to keep items clean.
Consumption rocketed. With six per cent of the world’s population in the early 1950s, the USA consumed a staggering 33 per cent of all the goods in the world and controlled 66 per cent of the world’s productive capacity. On a more basic level, just the consumption of hot dogs increased from 750 million in 1950 to 2 billion by 1960. A famous photograph showed a typical family with the two and a half tons of food they consumed yearly, including 300lb beef, 31 chickens and 8.5 gallons of ice cream. Their weekly budget for this amount was $25.
While at first many looked to the example of the 1920s and worried that the prosperity may not continue, as the 1950s developed there seemed no end to the post-war boom and so more and more Americans felt confident that this time it would last. With such contidence at home, the threat most people feared to their way of life was the influence of the USSR, the new foreign enemy.
