Hindered American Consumers from keeping up with the high levels of american productivity. Her class is about 75 minutes. Its been the last few weeks considering how americans adapted to abundance, between the 1890s and the 1920s. Despite their efforts of producers, advertisers and retailers and of others, the supply of goods continue to outstrip demand. This was not because everyone all hundred 6 million americans had everything they needed. It was because they didnt have adequate purchasing power. They dont have adequate wages or income to buy all of that stuff. And it wasnt just americans who were in the situation. But so to our trading partners around the world. They dont have enough income to buy all of the commodities we were producing in our fields and all the wonderful things are factories were making. So by the end of the 1920s, the American Economy went bust. You will know this. You all know the stock market crashed in 1929. And the World Economy went bust as well. Worldwide economic depression said in, the last between 1929 and wasnt officially over until 1942. What was called the Great Depression, could be considered a crisis of abundance. It brought attention to purchasing power, and in doing so, it ended up politicizing consumption. Weve talked a lot about how consumer culture rolls to be at the very center of american culture. And i keep telling you, that we need to consider politics. In today is the day that we will think about how consumption became politicized. Here is a graphic that typifies the usual story that historians tell about the Great Depression. Im sure you have all heard this at one point or another. In your junior when you are juniors in high school in American History class, or had other American History classes. Here are the typical stories that are told. In each of the bubbles in this graphic does bear some of the burden for the catastrophe. But i want to focus our attention on the bottom to baubles. The unequal distribution of wealth and overproduction. I want to show you, how the relationship between those two brought on from what we could call a crisis of abundance. To the world historical levels of agricultural and manufacturing productivity, we have talked about this. An age of abundance that arrived in the United States by the 18 seventies. The shift from an economy of scarcity, which we talk a lot about, when economy of abundance entailed what we identified in this class when we started releasing susans trouser satisfaction guaranteed. It entailed a crisis of distribution. We so much was being grown, and so much was being made that not only were the logistics of getting goods to market difficult, but finding new markets became imperative. So i ask you, just as review, what were some of the things that producers farmers manufactured . What were some of the things they did to solve this problem of overproduction to find new markets . We yes . Sam . We are differentiation with name brand, and any type of description on the packaging. Okay right, product in french asian, name brand packaging. What else besides what sam is just listed for us . What else today do to find new markets . We retailer and will the direct consent to connection to consumer. They tried to pass over the wholesaler the retailer the right to the consumer. Anything else . Theres so many things we talked about. We talked a lot about the shift from Production Marketing to what kind of marketing . Market driven production. Market driven production. We see right here in the slide, a great example of Market Driven production. What item on the slide typifies marketing driven production. The chris co. The barrels of flower typified production given marketing. And you see the label bobs right thats the packaging, the branding in packaging and differentiating a product. These are a number of the things that producers, steps they took in order to try to find new markets for all the commodities that were growing, and all of the goods that were being made in factories. Despite these incredible efforts, we learned a lot about them to find and identify new markets. Neither domestic nor foreign markets could absorb everything that was being grown and made in the u. S. Americans and foreigners just didnt have enough sufficient purchasing power to buy everything that was for sale. So the First World War rolls around and it delayed reckoning with this problem of overproduction. In much of the 1920s, there was slight increases in purchasing power. Thats received a reckoning with the problem of abundance as well. You had world war i, steves off the reckoning with the problem of abundance, then the 1920s, slight increase in purchasing power puts the problem off a little bit longer. But because prosperity did not lift all boats sufficiently, at the end of the twenties the crisis of abundance erupted. This time generally more demand was impossible. It was impossible to differentiate products even further. We talked a lot about that. All their efforts that advertisers went to add some kind of value to their product. But at a certain point, there is no new markets to be found. Theres no new demand to be generated. Americans wanted everything, as far as i could tell, but it didnt have enough power to pay didnt have enough money to pay for it. Let me first remind you about economic boom of the 1920s. We have it in this class actually put some numbers to that right . We looked at the advertising of the 20, but we havent talked about the economic boom itself. Ill just give you a bit of information about it. At the start of the decade, at the very beginning of the 1920s, at the end of world war one and, at the very end of 1918 november 1918. At the beginning of the 1920s, the u. S. Help 40 of the wealth of the entire world. We were officially the richest nation in the world at that point. And over the course of the decade, a gross to messed a product the gdp, Gross National product increased 40 . Increased 40 between 1920 and 1929. And this was because agricultural and manufacturing productivity nearly doubled. Nearly doubled in less than ten years. The number of telephones doubled, from 10 million to 20 million. The number of automobiles tripled, the numbers of radios increased from 60, 000, to 10 million. Part of the 60,000 was in 1920 radios or parameters into shortwave radios, by 1929 Everyone Wants a radio right . There are widespread consumer good. Nevertheless its an incredible increase in productivity. From 60,000 to 10 million. There were 160 times more electric refrigerators in 1929. As of 1920. So the rate of productivity not only did productivity double over the course of the 1920s, so did well, so did prosperity. Lets look at prices. Lets look at prices for a minute. I think weve talked about this before. Let me remind you about the Consumer Price indexes. The Consumer Price index. It is probably something you here in the news or you see a newspapers. Often abbreviated to cpi. Cpi is a measure of what a Market Basket of basic goods might be. Eggs, milk, butter. The kinds of stuff that an ordinary family, almost all of us would buy. It is a measure of how much that would cost at any given moment. It is taken as a measure of the cost of living. You can see from the graph here, that during and shortly after world war one, the prices increase pretty dramatically. The increase by as much as 60 . Then in the post war period, immediately after the war, that big shot there, that was due to a post war recession. The drop. It plummeted well below 1914 levels. And through 1924, the prices suddenly increased. Then there is a little bit that rise more until 1926 and then they level off and they begin to go downward by the beginning of 1929. If we look at the increase of prices over the course of the 1920s as a whole 1919 and 1929. We see up and down. But as a whole, inflation was only 1 . It was a very low rate of inflation in the 1920s. Between 1900 and 1920, the rate of inflation was extraordinarily high. 1900 to 1914, prices increased by 17 , and 1914 to 1919, five years, prices increased by 60 . Although americans in the 1920s experienced a relatively flat rate of inflation which is good for purchasing power, over the course of those three decades from the beginning of 1900. The cost of living did increase. It doubled, more or less. Price of rent, food, its set era. It doubled. If we look in the corner at the price of the model tea, we see a slightly different story. We see a different trend. What is the price of the model tea do . It goes. Noun right, it goes down. It drops pretty precipitously. What happens in 1913 that brings the price of the model t down . The moving Assembly Line. Right. The moving Assembly Line brings the cost of production down and therefore the price. What we see over the course of the 1920s is that automobile prices were not the only ones that dropped. The automobile prices are dropping, so the model t, the price of there was luxury automobiles whose prices increase, but as a whole, automobile prices are dropping. And prices for other durable goods are dropping as well. Like refrigerators, radio sets, look how oil prices decreasing over the course of the 1920s. The price of semi durable goods like clothing, shoes, all those semi durable goods. Their prices are decreasing as well. These were precisely the goods exactly the things that were featured as elements of the good life. Weve read the great great gatsby. For tuesday, for class on tuesday. Clothes and shoes and automobiles and telephones were featured as part of the life of these very rich people. These items are not only featured as part of the lives of the very rich people, but part of the good life that ordinary people should seek to attain. They were featured in magazine stories, advertisements, songs, movies. They for the needs on send of the good life of what americans should aspire to, and we see these items, these expectations for folding owning these items being showed by advertising, movies, the lifestyles of celebrities. When we talk about prices, but we are talking about is the cost of living. Right down, prices, cost of living. But when we talk about expectations, when we talk about expectations, what we are talking about is the standard of living. Prices, cost of living, expectations, standard of living. And the standard of living in the 1920s was on the rise. Its new standard of livings was beckoning americans to buy more, to identify new needs, new habits, and most of all to want more. The threshold of desire was rising. Let me be really clear with you. Many americans, most americans had to make do without electric refrigerators, without automobiles, without colorful house dresses or matching bathroom towels or all of the things that we would think about. Increasingly the, these luxuries were coming to be considered decencys. The shift from luxury to decency. As decencys, they were coming to be considered the birthright of all american citizens. Something that all americans had a right to claim, which for, and to want. Let us think about this. Despite historic levels of economic productivity we have historical levels of economic productivity. We have decrease in prices, higher standard of living. Many americans were forced to live on the edge. They were making due. They were like george wilson, from the greats gusty. They were living in the ash heaps. There is a lot of disagreement. No scholar has figured out exactly how Many Americans were living in poverty during the 19 twenties. There was not an official bureau charged with collecting statistics about poverty. There was no official agreement today as to what constitutes living in poverty or living out of it. I looked and i have seen some scholars estimate that 70 of all americans lived in poverty. In the twenties, that would be seven out of ten americans. Others say it was only 20 . That would be two out of ten. Those estimates are extreme. Extremely high, extremely low. I think the best guest is about a third. 30 , 33 . About a third of americans were living in poverty. They were living lives of real probation, economic difficulty and in addition to those numbers, those people, another 20 of them were probably near the line. Maybe they were above poverty, but it was pretty rough. It was a struggle. Life was a struggle for them. So, what do you guys notice from this wage chart . What do you notice . How do the farm workers wages look . They look similar to the unskilled workers, but they are based on seasonal work, and the total is significantly lower than the unskilled workers. That is right. The yearly total is 357 dollars down to 294. That is poverty. Those are poverty wages. It is estimated in the 1920s, im not sure whether i agree with this, but it is estimated that it took about 2500 dollars a year for a household to live a discern decent standard of living. We can see even with the skilled workers that this is not an easy time for them, although 1500 seems a lot better than 300 a year. Right . Anything else you guys noticed from that wage chart . Look what are they going up . For some . Then they kind of flatten out. If we were to take these wages and compare them to productivity, productivity doubles. In the space of ten years. But the wages, do they double . No. Not even close. Not even close. Wages are not keeping up with productivity at all. With the suggests is that working americans were not receiving a significant or a fair share of the wealth. The distribution of the wealth that is being generated by this massive amount of productivity is perhaps an evenly spread out. Lets thing for minute about the distribution of wealth. It is probably something you guys have heard about. It is in the news a lot today. The distribution of wealth. In the 1920s, the top 1 , we have all heard the term the 1 . It has become a very popular term in our day. The top 1 held about 24 of the nations wealth. To top 1 holds 24 of the nations wealth. Let us take the next 9 . You have the 1 and the next 9 . The next 9 held 26 of the nations wealth. Top 1 has about a quarter of the nations wealth. Top 9 have a quarter of the nations wealth. As a whole, the top 10 hold 51 of the nations well. They hold the majority of the nations wealth. Let us look at the bottom 60 . The bottom 60 of americans have 5 of the nations wealth. 5 . Then that other 30 in between that bottom 60 , they have the rest. They were doing pretty well. They have about 45 of the nations wealth. 44 . This is an incredibly unequal distribution of wealth. In fact, at no other time in our nations history, except for right now, has there been any quality. Has the wealth been distributed so unequally. We are not a contemporary history class, we do not think to we do not need to think about the present moment. We will consider the 1920s here. The distribution of wealth was incredibly unequal. As a prominent intellectual and activist, named wta beat the boys, im sure youve some of you have heard of it. The boys observed and hes looking at the situation. He did not have access to the kind of statistics ive just laid out for you, but he is looking at the situation and it is clear to him that something is very wrong and he observes and he quotes we have today in the United States, cheap prosperity and depression. Cheek by jowl. Just like this African American new sport. He is selling a newspaper. The headline is proclaiming attacks on billionaires. Or dissent over this billionaires tax. This is a 1921. Cheek by jowl, prosperity and depression. Not only were African Americans like this young boy and most other African Americans and other migrant norah needs that were impoverished, so two were farmers as you can tell from the wages we just looked at. Farmers were impoverished. They made up about 30 of our population. So were the coal miners. Unskilled laborers. We have a vast proportion of americans who are essentially impoverished. Despite the slow rate of inflation of the 1920s, we have looked at this distribution of wealth, despite the slow rate of inflation, the prices arent changing. Most americans did not earn enough to buy the necessities. They did not earn enough, let alone the decencys or any luxuries at all. This is the situation that characterizes the 1920s. Heres the situation. You have incredibly high levels of economic productivity. You have rising considerate consumer expectations. You have wages that do not match the pace at all. Up up up goes productivity, but wages are here. They are flat and in some cases going down. What do americans do about this . What did they do about this . Let me make some generalizations free first about how individuals and communities handle it when they cannot pay for their needs and their wants. Just for a moment, you might think about this yourself. What do you do when you cannot pay for what you need . What do you do when you cannot pay for what you want . What are some of the things some of the strategies, your college students. I bet you want many more things than what you can pay for. Maybe you need things you cant pay for. What might you do . Henry. Substitute with other products or items, may resort to stealing. You might steal, substitute. I like these ideas. Take out alone. You can take out alone. Get credit. Get a credit card. What else might you do . Move in with friends. Saving in that sense. You can cut costs, share a textbook. Move in with friends. Share a car. Take the bus. You can economizing all sorts of ways. Weve got taking out loans, stealing, economizing. What else . Loan you could get another job. You guys are also smart. You can tutor. There are zillion kids in this town who need to drink. You can tutor, you can babysit, take a minimum wage job. If you are over 20 when you can barton, wait tables. There are all sorts of things you can do to add to your income. Now henry logan suggested ways of economizing or trying to substitute trying to stifle your demands right . You could eat less right . When i was in my first Year Graduate school i didnt have very much money so i ate a lot of rahm in noodles. You know limit your expenditures and desires and wants and needs. You can figure out how to do that. What we just sort of laid out here, these are common spends strategies. There is nothing you about what you might come up with with how to make your ends meet, and this is what americans have been doing for a long time. Let me summarize for you. There is one thing you did not mention. That american started to do and thats trying to control price