Stock Market Speculation and Mass Conspicious Consumption of the 1920s

The period of the 1920s is known as a time of illegal gin, speakeasies, flappers, and mass conspicuous consumption as purchasing power had increased and people were investing in the stock market. Like every time period, there were pros and cons to the 1920s, and this post will examine stock market speculation and the rise of mass consumerist culture in the United States in the 1920s.

Stock Market Speculation

The postwar period of economic recovery and its return to normalcy helped to produce a surge of investment in the stock market. Optimistic business leaders and government leaders alike saw no end to this new economic boom and encouraged everyone to buy into the bull market of the time; some families invested their life savings into the stock market, and while the profits rolled in, these families experienced an increase in wealth for a while.

The new wealth that flowed from the stock market was built on a deeply flawed structure. Many of these stocks were bought on margin, which meant that buyers could purchase stocks by making only small down payments in cash, sometimes as low as 5% of the value of the stocks. The rest of the money used to purchase the stock(s) was/were borrowed from brokers and those who borrowed the money counted on their profits to repay their loans. This systemof purchasing on margin worked as long as the profits continued to flow.

Mass Consumption

The 1920s were a time of mass consumption--huge quantities of manufactured goods were available and many people had more money to spend on those goods. The mass production and consumption of these new goods and services, particularly in the automobile industry, electrical industry, and the radio and motion picture industry had effects on the American way of life.

The automotive industry stimulated the steel, rubber, paint, glass, and oil industries. The industry accelerated a middle class move to the suburbs that fueled a real estate boom and would expand cities into urban centers as more people would have the ability to commute to the cities from the suburbs and urban locales. This expansion of cities and suburban areas stimulated the development of services such as gas stations, motels, supermarkets, and shopping centers. At the same time, the automobile industry would lead to the need for highways and would negatively impact railroad construction and use. The automobile industry would have an interesting effect on social equality; women would gain more independence with the ability to purchase and drive automobiles, changing family life as it meant more women could work outside of the house and could even travel larger distances for work; and the low prices of automobiles meant that Americans of varying income levels had the accessability to purchase them.

The electrical industry changed homes, businesses, and cities through the introduction of the electric light, this helped double business productivity through electric power as well as transform life and leisure through the introduction of home goods such as electric washing machines, stoves, vacuum cleaners, refigerators, and irons. The electric industry connected people and eased rural isolation through the use of the telephone.

The radio and motion picture industry helped to ease regional differences and homogenzie American culture, helped to end rural isolation, helped popularize ragtime and jazz music, it provided an outlet for advertising, increased interest in politics and spectator sports, and created nationally known and recognized celebrities.

Role of Technology

Technology, combined with new marketing strategies, transformed American society in the 1920s. Led by Henry Ford and the automobile industry, mass production and the moving assembly line resulted in uniform products produced at lower costs.

These new technologies made possible a consumer-oriented economy, one in which more goods, costing less, were available to more Americans. Encouraged by a boom in advertising, families spent a smaller portion of their income on necessities and a larger portion on new comsumer goods such as appliances, radios, and reay-to-wear clothing. Often these goods were purchased over time through installment payments.

Growing Cultural Homogenization

The new technology introduced during this era also made American cultre more homogenous. Americns from one coast to the other tended to use the same products, wear the same clothing styles, see the same movies, and listen to the same music, just as they do today. Regional and class differences were blurred and individualism became less important than conformity.

This growth in cultural homogenization led to a shift in cultural values. As America became an urban, industrialized nation, changes in lifestyle, values, morals, and manners increased tension and conflict. Wealth, possessions, having fun, and sexual freedom were the new values which led to Americans having more leisure time and the rise of cultural movements such as the Harlem Renaissance.

Lerisure: With a shorter work week and with more paid vacation time, Americans had more leisure time. Americans consumed popular culture such as movies, spectator sports, listened to music on the radio and records, and played games.

Flappers: With the dichotomy of growing cultural homogenization and a shift in American cultural values, women gained notoriety during this era for embracing the change in culture towards a more sexually free society. The popular image of young women in the 1920s was that of the flapper, a young, pretty woman with bobbed hair who wore shortened dresses. The flapper drank alcohol, smoked, and she thought for herself. She was featured in movies, magazines, advertising, and novels. She was an expression of women's new sense of independence, a statement of change in American culture, and even rebellion. The image of the flapper often represented an example in the debate over traditional values versus modern values that was dividing the nation.

Literature: The conflict and concern created by the debate over traditional values versus modern values in America also saw expression in literature. American writers of the 1920s protested the effects of technology and mass consumption. They criticized the business mentality, the confority of the times, and the preoccupation with material things. Some writers, such as Ernest Hemingway (A Farewell to Arms, The Old Man and the Sea, For Whom the Bell Tolls, The Sun Also Rises, and more) became expatriates. Often referred to as the Lost Generation, these writers of the 1920s produced some of the most enduring works of American literature. Other great American writers of this era include F. Scott Fitzgerald, Langston Hughes, and Edith Wharton.

Harlem Renaissance: One of the most influential cultural movements of the 1920s was the Harlem Renaissance, led by a group of African American writers in the New York City neighborhood of Harlem. These creative intellectuals--mainly well-educated members of the middle class--felt alienated from the society of the 1920s. In their works they called for action against bogotry and expressed pride in African American culture and identity. Outstanding literary figures of the Harlem Renaissance include W.E.B. Du Bois, Langston Hughes, Zora Neale Hurston, and Alain Locke.

The Great Depression of the 1930s ended the Harlem Renaissance, cutting the sales of books and literary magazines. However, during the civil rights movement of the 1960s, the writers of the Harlem Renaissance and their works would attract renewed interest and popularity.

African American artists, musicians, and dancers also participated in the Harlem Renaissance. Black musicians in the South blended elements of African, European, and American music to create the distinctive sounds of jazz and blues. This music was carried all over the country and even abroad.

The 1920s was a period of mass consumerism and played a major role in the creation of a uniform American culture. As the general public experienced an increase in their wealth, they experienced an increase in leisure and pleasure. However, this was also an era in which marginalized groups such as women faced changing roles in society. Next time on the blog, we will examine women's changing roles in society in the 1920s.