Economic and Social Transformations of the Roaring Twenties

The Roaring Twenties in the United States

The Roaring Twenties in the United States, which met between 1922 and 1929, saw a dramatic growth in both industrial production and exports. This period first experienced a strong boost in new industries, including:

• Automobile industry
• Electric industries (electricity, phone, cinema)
• Manufacturing and appliances (refrigerators, radios)
• Chemical industry (oil refining, tires, fertilizers, pharmaceutical products)
• Aviation industry
• Development of new energy sources (electricity and oil)

The automobile industry became the symbol of new manufacturing times. Its production quadrupled, and it imposed mass production methods. We applied new methods of work rationalization (Taylorism) and standardized production chains (Fordism). The result of all this was an increase in production and a reduction in prices due to the maximization of cost reduction and increased production.

A very novel feature was the development of advertising (e.g., radio, posters) and new systems of installment purchases. The public, stimulated by Ford, could buy products despite low average wages. This led to the development of mass consumption.

Concentration of Business

Another important feature was the concentration of business. In the USA, large business groups were created by merging or clustering.

The Situation in Europe

The European powers, France and Germany, experienced only significant growth in industrial production due to the reconstruction needs of these two countries. On the rest of the world, most affected European countries faced repatriation of investment loans that were greater than those fed by U.S. investment credits, particularly in Western Europe, Germany, and Austria. These two countries suffered the most brutal consequences of the crisis.

The major German banks closed before the influx of depositors wanting to withdraw their money. In the United Kingdom, the crisis initially seemed less violent, leading to a far-reaching solution: abandoning the gold standard in 1931.

France

In France, the crisis was less deep and occurred later. To a greater or lesser extent, all economies in the world were affected, especially those of industrialized countries that were more involved in world trade.

Social Consequences of the Crisis

It is estimated that in the industrialized world in 1932, there were about 30 million unemployed, including 12 million in the U.S., more than 6 million in Germany, and more than 2 million in the UK. The misery and fear of hunger became widespread, especially among workers and peasants. However, the middle class was not spared, leading to fears of proletarianization, which is the loss of their lives and savings, and a downward shift on the social ladder to the position of industrial workers.

This created an ever-widening gap between the rich and poor, and social resentment grew, resulting in strong political polarization against the power and economic system of capitalist societies. Strikes and demonstrations, including hunger marches, became common. The fear of the so-called "red danger" led thousands of citizens to opt for communism and the rise of right-wing political groups whose main purpose was to prevent a revolution.