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corporate management was professionalized, graduate business school became the place to recruit managers and executive, spreading managerial expertise oWomen were typists, switchboard operators, office clerks, 10-fold increase in these kinds of jobs New strategy: welfare capitalism – paid less on the promise of more wealth lateroEmployee representation plans – employees could bring grievances as long as managementdidn’t objectoDrive by management to control the workplace, undercut unions, get worker loyalty oWorkers’ incomes would make workers effective consumers to buy the things companies areselling, to keep the whole thing going Union membership dropped from 5 million (1920) to 3.5 million (1929), even in a time of prosperity (usually union membership increases in good times) Big increase in foreign investments (ex: raw materials in other countries), American companies owned and operated oil fields, mining operations worldwide oAmerican banks invested in foreign companies and foreign governments that needed moneyto rebuild after WWI oRole of consumption as a factor in growth: installment buying (with credit)oExplosion in advertising – created wants you didn’t know you had, encouraged people to think they needed products: most notorious was Listerine oListerine invented an ailment called “halitosis” (bad breath)Real estate boom in Florida, railroads promoted tourism and land buying in Florida for profit. Increased investments in hotels, mansions – all collapsed in 1926 when Miami was devastated by a hurricane III. BuzzArtistic buzz – example: Harlem renaissance, an effect of the Great Migration (Alain Locke, Zora Hurston, Richard Wright, Langston Hughes) oPioneers of jazz and popular music (Bessie Smith, Bill Robinson)oFamous white artists are writers, reflecting on European cataclysm of WWI (F. Scott Fitzgerald, Willa Cather, Ernest Hemingway) oArtistic buzz and popular culture roar tend to obscure the business hum Business of America is Business (Coolidge quote): business against other kinds of economic interests/policies favoring business over workers oPicture of prosperity left out agriculture (in a depression all through 1920’s garnering no sympathy from the White House)oFarmers’ problem in 1920’s stemmed partly from high farm prices in WWI but when the war ended, farm prices collapsedoAmerican agriculture, like American industry, was phenomenally productive in the 1920’s – couldn’t find buyers for their massive output. When this happened to industry as well, it was a massive disaster called the Depression. Lecture 16: 2/26/16Great DepressionI.Economic Crisis: A. Cities B. Farms
II.Political Responses: A. Hoover B. Sinclair: EPIC C. RooseveltOctober 29, 1929: Black TuesdayoStock market crash did not cause the great depression, it was more of a symptom of a weakening economy in the US and in the Western world oIn 1929, only ~2.5% of Americans owned any corporate stock Immediate effects of crash were slightly limited I. Economic Crisis