Creative fun in
the palm of your hand.
Printed from https://www.writing.com/main/view_item/item_id/1937065-American-Domestic-Economic-Change
by Sez
Rated: ASR · Article · Business · #1937065
In 1920s, the USA experienced tremendous growth hence the term Domestic Economic Change
(Batchelor). Nicknamed the “Jazz Age”, the period witnessed a rise in wages, drop in prices of consumables, high standards of living, and the expansion of the democratic space to include the right of women to vote, and the growth of American business. The economic boom was a culmination of the rise of various industries led by the Automobile industry with Henry Ford’s taking the lead (Sorensen and Williamson). The expansion of the automobile industry led the rise in demand for steel, rubber and other materials. Ford employed mass production and standardization to increase production of goods and stimulate market demand through targeted advertising. The prominent issue that made his business ideas particularly prominent was the successful application of welfare capitalism (Batchelor; Sorensen and Williamson). Therefore, the issue of welfare capitalism became the driving force of people’s view of the 1920 American society.

Conditions, Reactions, and Understanding of the Issue in America’s Historical Development

         The issue of welfare capitalism was made prominent by the prevailing socio-economic conditions of the American society (Sorensen and Williamson). Specifically, domestic economic change in the 1920s led to an increase in disposable income and a rise in employment. Additionally, the fair treatment at work places led to the decrease in membership to worker’s unions. Furthermore, the period witnessed a rise in the entertainment industry with motion picture films such as The Jazz Singer and celebrity magazines and newspapers such as the Daily Mirror and the Reader’s Digest (Batchelor). This led to the transformation of social behaviors as American women changed their dressing habits and began to have liberal views about premarital sex. The issue of the time was yellow dog contracts which made employees had flexible working hours, had health insurance, and were offered profit sharing plans so long as they did not join unions.

         The American public had mixed reactions towards the expansion of welfare capitalism and the endless transformation of social behaviors. The public had positive feelings about the standardization of products, especially automobiles, as was demonstrated by the increase purchase (Batchelor). Secondly, the introduction of the yellow dog contracts was specifically attractive because of the financial rewards it gave to workers. Additionally, the yellow contracts created more social progress as it improved employer-employee relations by limiting industrial actions that normally slow production and reduce wages to workers who need to work. The positive implication of the American reaction is perhaps more demonstrated by their lack of desire to join unions. In fact during this period, membership to these unions dropped by two million people (Sorensen and Williamson). On the other hand, the transformation of the dressing style of the American youth led to generational misunderstandings. For instance, the emergence of the flapper image endured throughout the 1920s and changed the view of the American woman. The industry later established regulatory mechanisms such as the Motion Picture Producers and Distributors Association to regulate the industry.

         American historical development has been shaped by the issue of welfare capitalism since it encourages entrepreneurs to establish businesses and remain loyal to their employees in their treatment (Batchelor). In a more cross- cutting nature, the issue has also led to the increase in the American individual debt since it encourages spending. Particularly, the poor regulation of markets in the run up to the Great Depression has characterized American domestic economic change every time it is feared that the 1920s period is at hand.


The prominent aspect of welfare capitalism programs propagated by businesses in the domestic economic change of the 1920s remains the robust growth of the economy sustained by the increase in capital investment and the decrease in union activities.


Batchelor, Ray. Henry Ford: Mass Production, Modernism and Design. Manchester: Manchester U. Press, 1994.

Sorensen, Charles E and Samwel T Williamson. My Forty Years with Ford. New York: Norton, 1956.

© Copyright 2013 Sez (simeon.sez at Writing.Com). All rights reserved.
Writing.Com, its affiliates and syndicates have been granted non-exclusive rights to display this work.
Printed from https://www.writing.com/main/view_item/item_id/1937065-American-Domestic-Economic-Change