Rise of Mass Production and Consumption
We have heard of handmade goods.
These are made by hand and take a lot of time and effort.
Handmade goods were used since the times of kings until machine made goods came up.
Machine made goods are made in factories on a large scale.
They produce hundreds and thousands units of goods at once.
This started after the World War I (WWI)
After the WWI, the big powers like Britain and USA had different kind of economic situations.
While Britain’s economy fell due to huge debts and losses in the war...
...that of USA rose economically to great heights. It became one of the most powerful countries.
After a short period of economic trouble in the years after the war, the US economy resumed its strong growth in the early 1920s.
One important feature of the US economy of the 1920s was mass production.
Mass production started in the late 19th Century and by 1920s it grew quite rapidly.
Mass production boosted the US Economy after the war.
One of the well known personality connected to mass production was the car manufacturer Henry Ford.
He adapted the assembly line technique from Chicago slaughterhouse.
In the slaughterhouse there was a moving belt (conveyor belt) on which goods came to the workers.
The workers then did their part and the product moved forward for the next phase.
So the raw material went under several processes one by one and became the finished product.
This whole system is what is known as assembly line.
Henry Ford thought this method would allow cheaper and faster production of cars.
The assembly line made workers work at a certain pace as the conveyor belt moved after a certain time.
This increased the output per worker as they had no time to waste now.
Henry Ford manufactured a car every 3 minutes using this method.
The T-Model Ford was the world’s first mass-produced car.
The workers couldn’t cope up with the assembly line
Workers at the Ford factory were unable to control the pace of work.
So, they quit in large numbers.
Ford doubled the daily wage to $5 in January 1914.
He also banned trade unions from working in his factories.
Ford kept speeding up the assembly lines.
He constantly sped up the assembly line and also increased the wages.
This went on and on to increase production.
People now had higher wages as all over the world, the assembly line was adopted.
Due to higher wages people could now afford goods such as cars.
Car production in the US rose from 2 million in 1919 to more than 5 million in 1929.
Due to home loans and various other loans that came up, demand of high price goods increased.
The demand for refrigerators, washing machines etc. was fuelled by a boom in house construction and home ownership.
This created a cycle of higher employment and incomes...
... rising consumption demand, more investment, and yet more employment and incomes.
US now became one of the greatest lender, investor and sponsor all in one by 1923.
US imports and investments also helped the European countries to recover after WWI.
But all this was too good to last. By 1929, the world economy fell in the great economic depression.
In the end USA proved to be a great player in the economic development on global level.