The Roaring 20s: A Time of Massive Economic Expansion

Remembering the Roaring 20s -

A Skeptic’s View of American History

Episode 16 The Roaring 20s Reconsidered

Mark Stoler PhD

Film Review

In one of Stoler’s better lectures, he describes the 1920s as a time of major economic expansion. During this period, the US experienced an explosion in industrial productivity, thanks to “scientific” factory management, a consolidation of commercial enterprises (eg creation of grocery and department store chains) and a shift from heavy industry to consumer goods (thanks to an expanding electrical grid).

Henry Ford made the automobile a consumer item, using an assembly line to cut the cost of production and enabling workers to buy their own Fords by paying them an unprecedented $5 a day. The explosion of new consumer products was accompanied by a surge in advertising that played on people’s psychological desires to get them to purchase products they couldn’t afford and didn’t need. (See about Edward Bernays, the father of the public relations industry.

According to Stoler the car became a focal point of the US economy, leading to a surge in demand for steel, rubber, electronics, concrete and roadside restaurants.

A crisis in agriculture also led to a rise in urbanization, with city dwellers outnumbering rural residents for the first time in US history.The industrialization of farming created a food surplus and drop in income for individual farmers.

The new mass media (radio and motion pictures) helped spread the new culture of urbanization.

Stoler mainly examines the presidency of Warren G Harding, who only served two years between 1921-23,* with only a brief glance at Coolidge and Hoover, who succeeded him. All three were Republicans.

Harding, who is remembered as one of the second most corrupt presidents owing to the Teapot Dome scandal, is also remembered as the first president to present Congress with a coherent federal budget.

Significant treaties and legislation approved during this period include

  • The National Origins Act, which (until the 1960s) totally excluded Asia immigration, and set severe quotas for eastern and southern European immigrants.**
  • The Dawes Plan (1924), which ended the diplomatic crisis with Germany (which had defaulted on its reparations payments) by arranging for private loans to the German government and negotiating a new reparations schedule.
  • The Kellogg-Briand Pact (1928) outlawed war as an instrument of US of foreign policy.
  • The London Naval Arms Limitation Treaty (1930)

The 1920s also witnessed

  • The rise of a new Klu Klux Klan, attracting 3-5 million members (including many Northerners) in response to the migration of Southern blacks to Northern industrial cities. The new KKK would focus their attacks on Jews, Catholics and immigrants, as well as African Americans.
  • The start of Prohibition (the 18th Amendment approved in 1919 outlawed the production and sale of alcohol)
  • The granting of women’s voting rights ( in 1920 via the 19th Amendment)
  • The framing and execution of Italian immigrants Sacco and Vanzetti (1921-27)

*Stoler defines cities as towns of over 2,500 people.

**Teapot Dome, which was the second biggest presidential scandal after Watergate, involved the secret leasing by the Harding administration of federal oil reserves at Elk Hills, California, and Teapot Dome, Wyoming.

The film can be viewed free on Kanopy.

China’s Declining Economic Miracle

The End of the Chinese Miracle

Financial Times (2017)

This documentary explores factors behind China’s declining economic growth and the potential effect on the rest of the global economy.

The filmmakers attribute China’s recent economic miracle to an explosion of young workers willing accept low wages in hundreds of thousands of factories manufacturing cheap consumer goods for the West. Over two decades, the lure of jobs has prompted the migration of millions of Chinese youth from the countryside to 88 super cities (the size of London) all over China.

Owing to demographics, this supply of endless young workers has stalled, causing average manufacturing wages to more than double. The global recession and declining demand for cheap plastic has prompted many Chinese manufacturers to move to Southeast Asia, where wages are much lower. Others are are illegally employing undocumented Vietnamese laborers smuggled into China. Not mentioned in the film, is the rapid replacement of Chinese workers with robots (see China Replaces Workers With Robots) .

Owing to the decline in good paying manufacturing jobs, many rural workers are returning to their families to work the land.

Meanwhile commodity exporting countries (eg Australia, China’s main source of coal) are being forced into recession as Chinese manufacturing declines.