providing new job opportunities and rising wages. What followed was nearly two decades of almost uninterrupted growth, the Progressive Era, which took some of the roughest edges off of laissez-faire capitalism, and the continued rise of America as the world’s predominant power. Indeed, when we look back on the late nineteenth century today, what stands out is not the hardship and uncertainty of the period, but rather the utter transformation of the American economy—and of American life.
The United States emerged from the nineteenth century with an increasingly urban, industrial economy and a transient population, centered on immediate families, with weaker connections to extended family. It also emerged with an educated workforce that was the envy of the world (American farmers, cognizant of the decline of their profession, had pushed society to expand the education system, and had pushed their children through it). But this molting of the U.S. economy was disruptive, anxious, and, above all, bewildering to those who lived through it. It is only with the benefit of hindsight that we see it as a success.
THE GREAT DEPRESSION
Among all American economic calamities, the Great Depression of the 1930s stands alone in the pain that it levied, and it should be invoked cautiously as a comparison to our own times. From peak to trough,the nation’s real output fell by 30 percent and the stock market lost nearly 90 percent of its value. Unemployment neared 25 percent in 1933, and didn’t fall below 14 percent until World War II began. For more than a decade, until the war perversely lifted the U.S. economy, the economic environment was bleaker than any the country had experienced before or has experienced since. Still, the ways in which society changed in the ’30s as initial panic gave way to years of grinding anxiety are in some respects instructive. In the Depression, one can see several of the same forces that are again reshaping the American family and culture today.
The Depression began with the stock-market crash of 1929, but the pattern of economic growth before the crash is telling. In the national memory,the 1920s stand out as a time of heady growth and dizzying gains in wealth, but in fact most Americans didn’t experience the decade that way.Farmers still made up a quarter of the workforce in 1929, and they had missed out on the boom entirely; a crop glut following World War I had caused an agricultural depression.In America’s towns and cities, unemployment was generally low, but in many industries, wages were stagnant or declining; along with agriculture, oil and textiles were known as “sick sectors.” Even in heavy manufacturing, where wages for skilled workers grew quickly, the introduction of new, labor-saving technologies shrank the ranks of the workforce.
From 1920 to 1929,disposable per capita income grew by only about 1 percent a year, and even this low figure is misleading. Among the top 1 percent of earners, incomes rose 75 percent across the decade. A large proportion of families, however, saw scant income growth. Productivity gains showed up mostly in higher corporateprofits, which rose 62 percent between 1923 and 1929. Dividends rose by roughly the same amount, but only a tiny fraction of Americans had any money in the stock market.
One thing that made the twenties roar—in addition to the conspicuous consumption of the moneyed—was thewillingness of ordinary people to outspend their incomes, taking on debt to do so. The installment plan became a fixture of society in the latter part of the 1920s. By the end of the decade, 60 percent of all cars and 80 percent of all radios were being purchased on installment. Many Americans shared an infectious optimism, born of strong growth, even though most of that growth wasn’t actually making its way into their paychecks. In his classic history of the era,
The Great Depression: America, 1929–1941
,Robert McElvaine wrote, “[A] growing number of
The United States emerged from the nineteenth century with an increasingly urban, industrial economy and a transient population, centered on immediate families, with weaker connections to extended family. It also emerged with an educated workforce that was the envy of the world (American farmers, cognizant of the decline of their profession, had pushed society to expand the education system, and had pushed their children through it). But this molting of the U.S. economy was disruptive, anxious, and, above all, bewildering to those who lived through it. It is only with the benefit of hindsight that we see it as a success.
THE GREAT DEPRESSION
Among all American economic calamities, the Great Depression of the 1930s stands alone in the pain that it levied, and it should be invoked cautiously as a comparison to our own times. From peak to trough,the nation’s real output fell by 30 percent and the stock market lost nearly 90 percent of its value. Unemployment neared 25 percent in 1933, and didn’t fall below 14 percent until World War II began. For more than a decade, until the war perversely lifted the U.S. economy, the economic environment was bleaker than any the country had experienced before or has experienced since. Still, the ways in which society changed in the ’30s as initial panic gave way to years of grinding anxiety are in some respects instructive. In the Depression, one can see several of the same forces that are again reshaping the American family and culture today.
The Depression began with the stock-market crash of 1929, but the pattern of economic growth before the crash is telling. In the national memory,the 1920s stand out as a time of heady growth and dizzying gains in wealth, but in fact most Americans didn’t experience the decade that way.Farmers still made up a quarter of the workforce in 1929, and they had missed out on the boom entirely; a crop glut following World War I had caused an agricultural depression.In America’s towns and cities, unemployment was generally low, but in many industries, wages were stagnant or declining; along with agriculture, oil and textiles were known as “sick sectors.” Even in heavy manufacturing, where wages for skilled workers grew quickly, the introduction of new, labor-saving technologies shrank the ranks of the workforce.
From 1920 to 1929,disposable per capita income grew by only about 1 percent a year, and even this low figure is misleading. Among the top 1 percent of earners, incomes rose 75 percent across the decade. A large proportion of families, however, saw scant income growth. Productivity gains showed up mostly in higher corporateprofits, which rose 62 percent between 1923 and 1929. Dividends rose by roughly the same amount, but only a tiny fraction of Americans had any money in the stock market.
One thing that made the twenties roar—in addition to the conspicuous consumption of the moneyed—was thewillingness of ordinary people to outspend their incomes, taking on debt to do so. The installment plan became a fixture of society in the latter part of the 1920s. By the end of the decade, 60 percent of all cars and 80 percent of all radios were being purchased on installment. Many Americans shared an infectious optimism, born of strong growth, even though most of that growth wasn’t actually making its way into their paychecks. In his classic history of the era,
The Great Depression: America, 1929–1941
,Robert McElvaine wrote, “[A] growing number of
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