Capitalism in the US 1900's Flashcards
1
Q
Nature of Capitalism in the US
A
- Capitalism was a vibrant economic system in the US
- Many people made vast fortunes during the late 1800s
- By 1900 there were 5000 millionaires in the USA and four multi-millionaires
- New arrivals found many entrepreneurial opportunities and opened small businesses
- Between 1820 and 1930, the value of manufactured goods increased sevenfold during the USA’s ‘industrial revolution’
- By 1900, they were the world’s leading producer of steel, iron and coal
2
Q
The American Dream
A
- United States – the land of opportunity where anyone can achieve anything/live a successful life, regardless of their background
- The American Dream could be achieved through hard work, determination, ambition and self-reliance
- Herbert Hoover, president of the USA from 1929 to 1933, was an example of someone who went from ‘rags to riches’
- ’Rugged Individualism’ = the idea that people can succeed through their own efforts and hard work
3
Q
The Capitalist boom of the 1920s
Foundations & Economic Policy
A
- Raw materials and skilled labour
- Growing market for manufactured goods (consumerism)
Economic policy of the Republican party:
* As little government interference as possible
* High customs duties on imported goods (encourage people to buy locally)
* Low taxes (more money to buy goods)
* Weak trade unions (workers have limited power)
4
Q
Industrial Development
A
- Growing population to serve as workforce and provide market for goods
- Natural resources such as coal, iron, oil
- WWI provided foreign markets for the sale of agricultural goods and armaments
- The Republican government had a laissez-faire approach to the economy
- Low taxes = spending power
- High import tariffs gave the government additional revenue
- This all leads to rapid Industrial Development e.g. the automobile
- Optimistic state of mind in economic development and capitalism
5
Q
Production and consumption
A
- Production increased as did consumers’ ability to buy new mass produced products
- Henry Ford’s Model T Ford
- Thomas Edison was a folk hero – by 1920s only half of USA had electricity, but this was changing fast
- Other industries were stimulated by the motor industry:
- Iron, steel, rubber, glass, highways, petrol stations, hotels, restaurants, tourism, housing in newly developed suburbs
- Household products – refrigerators, washing machines
- Office equipment – electric typewriters
- Skyscrapers
6
Q
American Society in the 1920s
A
- By the 1920s, the USA had the highest standard of living in the world
- “Roaring Twenties” = time when conservative social customs changed and people enjoyed life
- Decade of Mass Entertainment – movies, Hollywood, radio,celebrity
- “Jazz Age” because the Jazz and blues became popular
- Jazz clubs, dancing, and new fashions became particularly popular – challenged traditional conservative practices
7
Q
Red Scare
A
- Constant perceived threat of communism
- Thousands of immigrants arrested and deported
8
Q
Prohibition and Crime
A
- 1919: 18th amendment to constitution banned manufacture and sale of alcohol
- But black market developed and run by gangs like the Mafia – this was the time of **Al Capone **(Chicago Mafia boss)
- The illegal smugglers of alcohol were called “bootleggers” and alcohol was sold illegally at clubs called “speakeasies”
9
Q
Klu Klux Klan
A
- Resurrected after WWI
- Targeted African Americans, Jews, Catholics, Communists
- 5 million members by 1920s
- Lost power by 1930 because of internal conflicts
10
Q
Hire Purchase and Advertising
A
- Hire Purchase (HP) was introduced as a new way for people to buy goods when they didn’t have money
- Pay a deposit of around 10% and then pay monthly instalments
- Advertising thrived and helped to promote consumer culture
- Advertisers promoted HP’s to encourage potential buyers
11
Q
Weaknesses in the US Economy
A
- Uneven distribution of Wealth
- Problem in agriculture
- Problems in trade
- Unsound business practices
12
Q
Unequal distribution in wealth
A
- Not everyone could afford to buy consumer goods
- Millions lived in poverty
- Demand to drop, factories decreased production, and workers began to lose their jobs
13
Q
Agricultural problems
A
- WWI = boom period for American farmers
- After the war, demand dropped **= huge surpluses = drop in food prices = farmers don’t make enough money **
- Resulted in farmers leaving the land and out of work
14
Q
Problems in trade
A
- Policy of protective tariffs = protect local industry from cheaper imports
- Meant to help the economy but had the opposite effect
- Stopped the free flow of trade between the USA and the rest of the world
15
Q
Unsound business practices (credit)
A
- People could get credit too easily = owe lots of money
- No protection for people who brought shares or put money in banks
- Business had to sort itself out without interference = problems manifest
