Essay Application of New Technologies and the Economic Boom of the 1920s

Submitted By Nathan-Hoy
Words: 862
Pages: 4

“How far does the application of new technologies explain the economic boom of the 1920s”

After World War I, the European economy was exhausted. This gave the US an opportunity to expand their industries due to their late entry into the war and lack of bombing on their factories to become a dominant economic power by becoming a big lender and exporter. It can be argued that new technologies had a fair contribution to the economic boom, but there were other contributors such as the stock market that also boosted the economy. It can also be suggested that although new technologies in this period helped boost industry, towards the end of the period it actually started to hinder it.

One of the biggest contributors from new technologies for the boom was the creation of mass production and the assembly line. The best example of this is Ford who set about producing affordable cars for the American people. He believed in using his profits to pay and take on more workers thus creating many jobs. By 1929, there were 23 million cars in the US and thousands of jobs were created, not only in the factories themselves but also building roads, petrol stations and garages. People could also buy shares in companies like Ford which also benefited the economy massively during this time. However, it can be argued that on a fundamental level, without America's wealth of natural resources, creating products such as cars and fridges would have been impossible. Therefore, new technologies purely on their own couldn't explain the economic boom as they were reliant on natural resources being available. Had they been imported from other countries, especially after World War 1, it is likely that new technologies wouldn't have taken off as fast as they did.

It can also be argued without systems such as hire-purchase and credit, new technologies wouldn't have been affordable for the American people. This meant that people could 'buy now and pay later' so they could spread the cost of items over a period of time and as a result, most Americans could start buying expensive goods. However, in order to sell these goods, producers had to rely on advertising to encourage the people to buy their products and not their competitors. Adverts were placed on billboards, in newspapers, through the radio and in cinemas. Around the same time, chain stores also started opening such as J C Penney. Without these marketing techniques and places to sell their goods, it is likely that products wouldn't have been sold on the scale that they were. Also, once these products were sold, a lot of them needed electricity to power them. This put a huge demand on the grid which struggled to keep up but was also another source of income for the economy. During this time, the demand for electricity doubled. This is more evidence to suggest that new technology on it's own was not the main cause of the boom and was very much reliant on other industries to support it and push it into the forefront of American society.

Separate to other industries, new technologies also benefitted the financial sector. Companies started to make themselves available on the stock market so people could buy shares to increase their funds to expand. If the companies were successful, so were the people who bought shares in them as they increased…