Roaring Twenties and Great Depression: Economic Shifts

Roaring Twenties: Prosperity Era

The 1920s, often called the "Roaring Twenties," was a decade of prosperity and societal change. Following World War I, the U.S. experienced increased consumption, a more egalitarian society, and a liberalization of customs. Women gained more independence, and the "American way of life," emphasizing prosperity through consumption, emerged. This era also saw advancements in technology, including skyscrapers, airplanes, cars, electricity, and radio, alongside the rise of gangsters and Prohibition.

The Great Depression: Economic Crisis

In contrast to the 1920s, the 1930s were marked by the Great Depression, a severe economic crisis in the U.S. and Europe. Unemployment soared, leading to widespread poverty and reliance on charity. The crisis prompted increased state intervention, impacting individual liberties and fostering the growth of authoritarian political movements.

The 1929 Stock Market Crash

The Great Depression began with the 1929 stock market crash. Overproduction, fueled by consumerism in the 1920s, led to inflation and a collapse in agricultural prices. On October 24, 1929, the stock market plummeted, causing panic and widespread financial ruin. Banks lost liquidity, factories closed, and unemployment surged, further reducing consumption.

Responses to the Crisis

Many European countries adopted protectionist measures, with extreme cases in Nazi Germany and Fascist Italy, where economies were militarized. Traditional liberalism proved ineffective, leading to new economic policies focused on:

• Increasing external demand
• Enhancing production planning
• Creating social security systems

These policies involved greater public spending and state intervention, exemplified by two major approaches:

The New Deal (U.S.)

President Roosevelt's New Deal, implemented after 1933, aimed to moderate the crisis through state intervention without resorting to extreme protectionism.

Keynesian Economic Theory

John Maynard Keynes proposed a new economic theory in his General Theory of Employment, Interest and Money. Keynes advocated for state intervention to boost demand, create jobs, and implement multiplier policies.

Cultural and Artistic Shifts

The 1920s saw a growing tension between art created by minorities and industrial art for the mass public. Intellectual circles reflected the pessimism generated by the war.