Was advertising the main reason for the Economic Boom? (16marks)
Historians say that advertisement was the main reason for the Economic Boom. They argue that advertisement led to the Americans buying more consumer products since, advertisement created a huge demand through the idea that people needed these consumer products. However, there are other factors such as, mass production, new industries & higher purchase. In this essay, I’m going to argue that higher purchase was the main reason that led to the economic boom.
Higher purchase was the most important reason for the economic boom. It was through the laissez faire scheme that higher purchase became an important aspect of business. The Laissez Faire term basically meant that business were each to their own. They had no support from the government and were left to run their businesses on their own. These businesses then introduced the term higher purchase. Higher purchase was a process introduced in the 1920’s. This process enabled people to buy goods in instalments. People no longer had to save to keep up to buy goods and could therefore afford to keep up with the latest trends and buy more products. For example in 1921 $12.2 million worth of goods where sold compared to $360.0 million goods after higher purchase was introduced. This was good for the economic boom as Higher Purchase brought business and lots of brought lots of profit. These profits were then re-invested back into the US economy, helping to continue the cycle of prosperity. This is how polices; higher purchase led to the economic boom.
Another policy the republican government introduced was tariffs. Tariffs meant that American goods were cheaper than imported goods because the US government had put a tax on imported goods. For example the price of an American brand of radio would be $20 but an foreign branded radio would be $45. This meant that consumers were more likely to buy American’s leaving the demand for imported goods to go down. This is also an example of financial isolasim and it was a very important factor that led to the economic boom.
Mass production also played a vital role in the development of Economic Boom. Mass production was a clever process introduced in the 1920’s. This process enabled goods to be produced quickly & cheaply. An example of these goods that were cheaper are TV’s, Radios cars & fridges. Since goods were cheaper & wages had gone up by 8% more people could afford to buy these products. This increased the growth of the industry. Henry Ford was the first person to install the principles of mass production in his company. In 1908 before the use of mass production a ford car costed $850. However after the use of mass production a ford car costed $300. This increased profits as in 1939 28 million cars were sold compared to a measly 1 million. The growth of the car industry meant that more garages were built and an increase of surface roads was made. By 1929 4 million workers depended on the car industry. This resulted in an increase of jobs. This was a very important reason for the economic boom.
New industries were also another major reason that led to the economic boom. In 1922, electrical goods were increasingly used as an alternative to coal oil and gas. Electricity meant that more newly industrial goods had to be produced to tailor the trend. New technologies were
