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The Business of The Business of America is Business America is Business

~ President Coolidge~ President Coolidge

The Consumer Economy of the 1920s The Consumer Economy of the 1920s

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Postwar ProsperityPostwar Prosperity

The "Second Industrial Revolution" : The "Second Industrial Revolution" : WWI stimulated development and WWI stimulated development andinvestment in new technology thatinvestment in new technology thatcontributed to the business boom.contributed to the business boom.

As electricity became widespread and As electricity became widespread and

industrial production more efficient,industrial production more efficient,mass produced consumer goodsmass produced consumer goodsbecame available to the public atbecame available to the public atattainableattainable prices (low).prices (low).Consumers were reading many Consumers were reading many

materials and purchasing the samematerials and purchasing the samegoods.goods.Communication innovations in radio,Communication innovations in radio,

advertising, and film contributed to theadvertising, and film contributed to thehomogenization of ideas that led to thehomogenization of ideas that led to theadvent of national popular culture.advent of national popular culture.

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Postwar ProsperityPostwar Prosperity

The cycle that created the business boom in the 1920's: The cycle that created the business boom in the 1920's:standardized mass production led tostandardized mass production led tomore efficient machines, which led tomore efficient machines, which led tohigher production and wages, which led tohigher production and wages, which led toincreased demand for consumer goods,increased demand for consumer goods,

which perpetuated more standardized mass production. which perpetuated more standardized mass production.

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Postwar ProsperityPostwar ProsperityIndustryIndustry*P ercentage Increase, 1922*P ercentage Increase, 1922--2828

Industrial P roduction: 70%Industrial P roduction: 70%Gross National P roduct: 40%Gross National P roduct: 40%P er Capita Income: 30%P er Capita Income: 30%Output per factory man hour: 75%Output per factory man hour: 75%Corporate P rofits: 62% (1923Corporate P rofits: 62% (1923--1929)1929)

E lectric PowerE lectric Power*P ercentage Increase, 1899*P ercentage Increase, 1899--1929: 331%1929: 331%

P ercentage of American Industries powered by electricity, 1929: 50%P ercentage of American Industries powered by electricity, 1929: 50%W orkers W orkers

*P ercentage Increase, 1923*P ercentage Increase, 1923--2929 Worker's incomes: 11% Worker's incomes: 11%

Real Earnings (for employed wage earners) 22%Real Earnings (for employed wage earners) 22% Average Work Week: Average Work Week: --4%4%

In what general ways did the economy change in the 1920's?

What changes in the average worker's wage, output, and work day length do you notice?

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S cientific Management and theS cientific Management and the

Reorganization of W

ork Reorganization of W

ork

Innovative industrialist Henry Ford masterfully applied Taylor's theory of workerInnovative industrialist Henry Ford masterfully applied Taylor's theory of workerefficiency and wage motive.efficiency and wage motive.Ford began paying an unprecedented $5 a day Ford began paying an unprecedented $5 a day- - it was more than a pay increase, it wasit was more than a pay increase, it wasa means for Ford to establish a measure of control over the workforcea means for Ford to establish a measure of control over the workforce

The price of Model The price of Model--T was cut in half, thereby expanding the customer base. T was cut in half, thereby expanding the customer base. This image of a moving assembly line at Ford Motor Company demonstrates both the This image of a moving assembly line at Ford Motor Company demonstrates both theprinciples of efficient production and the proliferation of mass produced consumerprinciples of efficient production and the proliferation of mass produced consumergoods.goods.

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S cientific Management and theS cientific Management and the

Reorganization of W

ork Reorganization of W

ork

This article announces the clamor in Michigan after Ford beganpaying $5 a day.

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S cientific Management and theS cientific Management and the

Reorganization of W

ork Reorganization of W

ork

A furniture factory in 1903 A furniture factory in 1925

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The Automobile and American The Automobile and American

CultureCulture The explosive growth of the The explosive growth of theautomobile industry revolutionizedautomobile industry revolutionized

American life. American life.Henry Ford's innovative productionHenry Ford's innovative productiontechniques made cars affordable fortechniques made cars affordable foraverage Americans and set new average Americans and set new standards for industry.standards for industry.By the end of the decade, there wereBy the end of the decade, there wereenough cars on the road for every oneenough cars on the road for every onein five persons.in five persons.

Related industries sprang up including Related industries sprang up including service facilities, filling stations, andservice facilities, filling stations, andmotels.motels.

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G eneral Motors E clipses FordG eneral Motors E clipses Ford

Although Ford developed a system for Although Ford developed a system formassmass--producing cars and selling themproducing cars and selling themcheaply, Ford Motor Company failedcheaply, Ford Motor Company failedto produce options for consumers.to produce options for consumers.

The utilitarian Model T was "available The utilitarian Model T was "available

in any color, so long as it was black"in any color, so long as it was black"and changed little in design over theand changed little in design over theyears.years.

When Alfred P . Sloan became When Alfred P . Sloan becamepresident General Motors Corporationpresident General Motors Corporationin 1923, he introduced alternativein 1923, he introduced alternativemakes like Chevrolet and Buick thatmakes like Chevrolet and Buick thatcame in a variety of colors forcame in a variety of colors forincreasingly sophisticated consumers.increasingly sophisticated consumers.

The Model T

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G eneral Motors E clipses FordG eneral Motors E clipses Ford

GM tapped into the emerging consumer psychology, annually producing stylistGM tapped into the emerging consumer psychology, annually producing stylistupdated models, marketing them aggressively, and promoting installment paymentupdated models, marketing them aggressively, and promoting installment paymentplans.plans.Finally, in 1927, Ford Motor Company took a cue from GM's success and introducedFinally, in 1927, Ford Motor Company took a cue from GM's success and introducedthe Model A with a blitz of advertising and the offer of the Model A with a blitz of advertising and the offer of installment plans.installment plans. The Theproduct was so highly anticipated that many were sold before it was even introduced.product was so highly anticipated that many were sold before it was even introduced.

GMs 1927 Cadillac La Salle- thefirst car designed by a stylist.

Fords Model A

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W arren Harding and the Return to W arren Harding and the Return to

NormalcyNormalcySimilar to modern Republicans in thatSimilar to modern Republicans in thatthey cutthey cut taxes to free up capital fortaxes to free up capital forinvestment andinvestment and cutcut federal spending.federal spending.P resident Warren Harding's campaignP resident Warren Harding's campaignslogan, "Return to Normalcy," and hisslogan, "Return to Normalcy," and hispresidency itself were mediocre andpresidency itself were mediocre anduneventful, save for the scandals thatuneventful, save for the scandals thatcame to light after his death in office.came to light after his death in office.He took a laissezHe took a laissez--faire stance infaire stance ineconomics and government, soeconomics and government, soaccordingly, he opposed organizedaccordingly, he opposed organizedlabor and antilabor and anti--trust measurestrust measures ..

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W arren Harding and the Return to W arren Harding and the Return to

NormalcyNormalcy Though he was an steadfast Though he was an steadfastconservative, Harding took littleconservative, Harding took littleinitiative as a policymaker andinitiative as a policymaker anddelegated decisiondelegated decision--making to a few key making to a few key cabinet members.cabinet members.Secretary of the Treasury Andrew Secretary of the Treasury Andrew Mellon pushed through tax cuts toMellon pushed through tax cuts to

wealthy citizens and business, following wealthy citizens and business, following the "trickle down" theory of the "trickle down" theory of economics.economics.

Secretary of Commerce HerbertSecretary of Commerce HerbertHoover and Secretary of State CharlesHoover and Secretary of State CharlesEvans Hughes worked to secureEvans Hughes worked to secureforeign markets for American interests.foreign markets for American interests. The influential Andrew Mellon on a

postage stamp.

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Inaugural Address of W arrenInaugural Address of W arren

Harding (1921)Harding (1921) The forward course of the business cycle is The forward course of the business cycle isunmistakable. unmistakable.

I speak for administrative efficiency, for lightened taxI speak for administrative efficiency, for lightened taxburdens, for sound commercial practices, for adequateburdens, for sound commercial practices, for adequatecredit facilities, for the omission of unnecessary credit facilities, for the omission of unnecessary interference of Government with business, for an endinterference of Government with business, for an endto Government's experiment in business, and for moreto Government's experiment in business, and for moreefficient business in Government administration. efficient business in Government administration.

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Protective TariffsProtective Tariffs A A protective tariff protective tariff is a tax on importedis a tax on importedgoods to make the them lessgoods to make the them lesscompetitive with Americancompetitive with American--mademadegoods.goods.

The Emergency Tariff Act of 1921 The Emergency Tariff Act of 1921

and theand the Fordney Fordney McCumberMcCumber Act of Act of 1922 imposed the highest tariff 1922 imposed the highest tariff rates in history at the time.rates in history at the time.LawmakersLawmakers wanted to protect wanted to protect

American interests as Europe American interests as Europebegan to recover and export itsbegan to recover and export itsgoods.goods.

The tariffs made it difficult for The tariffs made it difficult forEurope to pay war debts andEurope to pay war debts andeventually slowed internationaleventually slowed internationaltrade by provoking other countriestrade by provoking other countriesto enact high tariffs on U.S.to enact high tariffs on U.S.exports.exports.

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S ilent Cal and the Business of S ilent Cal and the Business of

America America When P resident Harding died in office When P resident Harding died in officein August 1923, the famously laconicin August 1923, the famously laconicCalvin Coolidge assumed theCalvin Coolidge assumed thepresidency.presidency.Coolidge's laissezCoolidge's laissez--faire policy faire policy -- cutting cutting taxes, reducing government spending,taxes, reducing government spending,and imposing high tariffs on foreignand imposing high tariffs on foreigngoods.goods.He and Mellon were intensely focusedHe and Mellon were intensely focusedon managing the government and itson managing the government and itsbudget in an organized, businessbudget in an organized, business--likelikemanner.manner.Coolidge's famous remark, "TheCoolidge's famous remark, "The

business of America is business,"business of America is business,"characterized the procharacterized the pro--business, probusiness, pro--consumerism mentality of the Jazzconsumerism mentality of the Jazz

Age. Age.Coolidge, Mellon, and Hoover

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Inaugural Address of CalvinInaugural Address of CalvinCoolidge (1925)Coolidge (1925)

unless we wish to hamper the people in their right unless we wish to hamper the people in their rightto earn a living, we must have tax reform. The methodto earn a living, we must have tax reform. The method

of raising revenue ought not to impede the transactionof raising revenue ought not to impede the transactionof business; it ought to encourage it. I am opposed toof business; it ought to encourage it. I am opposed toextremely high rates, because they produce little or noextremely high rates, because they produce little or norevenue, because they are bad for the country, and,revenue, because they are bad for the country, and,

finally, because they are wrong. This country finally, because they are wrong. This country believes in prosperity. It is absurd to suppose that it isbelieves in prosperity. It is absurd to suppose that it isenvious of those who are already prosperous.envious of those who are already prosperous.

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W hat does it mean to be American? W hat does it mean to be American?

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Advertising in the Jazz Age Advertising in the Jazz Age Advertising techniques refined as the Advertising techniques refined as themutually supportive phenomena of mutually supportive phenomena of mass production and mass mediamass production and mass mediaexploded into the Americanexploded into the Americanconsciousness.consciousness.Modern advertising, using popularModern advertising, using popularculture and celebrities to fuelculture and celebrities to fuelconsumption, began to take shape.consumption, began to take shape.

The array of new appliances and The array of new appliances andconsumer goods available at a lowerconsumer goods available at a lowercost due fueled consumption.cost due fueled consumption.Businesses conquered the challenge of Businesses conquered the challenge of efficiently producing enough goods;efficiently producing enough goods;

now the focus was creating desire.now the focus was creating desire.

This ad uses a celebrity endorsement to glamorize

smoking and exploits the image of the

new woman of the 1920s.

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Advertising in the Jazz Age Advertising in the Jazz Age

Another ad legitimizing desire; it associates the product with glamour and modernity

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Advertising in the Jazz Age Advertising in the Jazz Age

See this ad, buy the radio, hear more ads, buy more stuff !

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Kiss Me with yourKiss Me with your BarbasolBarbasol FaceFace

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Forever YoungForever Young

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Americans and their waists Americans and their waists

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Mobile AdvertisingMobile Advertising

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President Coolidge on AdvertisingPresident Coolidge on Advertising(1926)(1926)

It makes new thoughts, new desires, and new actions. It makes new thoughts, new desires, and new actions.... It is the most potent influence in adopting and... It is the most potent influence in adopting andchanging the habits and modes of life, affecting whatchanging the habits and modes of life, affecting what

we eat, what we wear, and the work and play of the we eat, what we wear, and the work and play of the whole Nation. whole Nation. Mass production is only possible where there is mass Mass production is only possible where there is massdemand. Mass demand has been created almost entirely demand. Mass demand has been created almost entirely through the development of advertising. through the development of advertising. Advertising ministers to the spiritual side of trade. Advertising ministers to the spiritual side of trade. It is all part of the greater work of regeneration andIt is all part of the greater work of regeneration andredemption of mankind.redemption of mankind.

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And the Best part is, it And the Best part is, it wont cost you wont cost you

anythinganything

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Buy Now Pay Later!Buy Now Pay Later!

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Credit and the ConsumerCredit and the Consumer As consumerism became a hallmark of As consumerism became a hallmark of Modernism, the stigma of purchasing Modernism, the stigma of purchasing goods on "installment plans" faded.goods on "installment plans" faded.

The automobile industry was one of The automobile industry was one of the first to capitalize on the potential of the first to capitalize on the potential of consumer credit, but other industriesconsumer credit, but other industriesquickly followed suit.quickly followed suit.

This ad characterizes credit as a prudentfinancial decision and a way to gain instant

gratification.