The First World War left much of Europe in complete disarray however the USA, having only joined the war in its last year, suffered much less physical and economic damage. There is still debate over whether World War One was the main reason for the boom in America or whether it was due to other factors. Potter is convinced World War One acted as a catalyst for the boom by causing growth in industry, accelerated productivity and the laissez faire attitude of the federal government.
Conversely, although Jones acknowledges the war caused some growth in industry and demand he gives more credit to technological advancement and innovation. Gerstle, likewise, gives credit to technological advances but also, similarly to Potter, sees the war as providing the stable foundations of the boom. Cannadine suggests the boom was mainly down to Mellon’s policies and government actions giving no credit to the war. The view that Word War One was the main reason for America’s booming economy in the 1920’s needs to be assessed.
Cannadine attempts to persuade his audience that Mellon’s policies and consequently the government were the main reason for America’s booming economy in the 1920’s. He mentions the “stricken post first World War world” which suggests he feels the war did little to help America’s and certainly the world’s economy, however, America did emerge from the war certainly in a better state than any European country which Cannadine also seems to overlook. Although, America did go through a short economic depression from the mid 1920’s to 1921 so it could be argued that Cannadine is correct and that the war did not offer a stable economic foundation for the boom. He does state that “there was much of [the boom] for which Mellon could take the credit” which is much more agreeable with Potter, who sees the war as a catalyst for the boom, and also with Jones and Gerstle who acknowledge the war’s contribution to the boom within industries and some areas of the economy.
Although Cannadine gives the war little credit for the boom there is evidence which supports his view. There was a significant rise in Government and business co-operation at this time and the laissez faire attitude of the Government allowed many businesses to flourish; Andrew Mellon, Secretary of the Treasury, believed government should play as little part in economic life as possible. Taxes were kept low so that people and companies would have more money to invest and the increased prices of tariffs, implemented by acts such as the Fordney-McCumber Tariff of 1922, protected American businesses from outside competition. Both of these policies allowed industries to grow and wealth to accumulate. Potter also recognises the importance of the government, arguably agreeing with Cannadine, as although he implies the war was critical to the boom he also gives a great deal of praise to the Government and its policies in helping to continue it. However, Potter also infers that government investment and cooperation was induced by the war which disagrees with Cannadine’s view. Although Cannadine’s fixation on Mellon may lead to exaggeration, the role of the Government in the boom should not be downplayed.
Cannadine does not mention technological advances in causing the boom which contrasts with Jones who stresses the importance of technological advancement in inducing and certainly maintaining the boom through rises in consumerism, productivity and the electrical industry. Cannadine’s view has basis in fact; the government certainly helped sustain the boom through its policies and Mellon had a part to play in that. It is also supported to some extent by Potter’s views; however, it exaggerates the role of the government and places too much praise on Mellon. Ultimately Cannadine’s view does not support the statement that the war was the main reason for America’s booming economy as he barely mentions it except when putting a negative light on its effects. Although the government and perhaps Mellon’s policies helped to maintain the boom and allowed it to excel in some areas Cannadine gives no credit to any other factors that the other interpretations mention which decreases the validity of his view as there were many arguably more important factors than the role of Mellon and the government.
In interpretation B, Jones connotes that the booming economy in the 1920’s was due to technological innovation and advancement, however in contrast with Cannadine he does give limited credit to the war. Jones argues that productivity increased “resulting from technological innovation and the application of ‘Frederick W. Taylor’s’ theory of scientific management”. Scientific management basically increased efficiency in the workplace and ensured employees were working in areas which they could excel in; taking a more scientific approach to production.
This contradicts Potter who says maximum productivity was reached because of the strain felt by labour shortages during the war causing workers to be more efficient and therefore produce more. He also uses facts and figures to back up his statements telling us that “although the population increased by only about 16%…, industrial production almost doubled”. This supports his view on increased productivity which Gerstle shares as he also mentions that “productivity and efficiency [were lifted] to new heights” during this period. Jones puts a lot of emphasis on technological advancement in creating the booming economy, saying electricity consumption more than doubled during the decade mainly due to the alarming increases in electrical industries for example the adoption of the grid system. He suggests that these technological advances and raised productivity lead to higher consumerism in both the electric and domestic industries causing the boom to flourish. He also gives credit to the war saying that there was prosperity because of the cutting off of foreign supplies during the war causing newer industries to emerge and grow.
Gerstle also agrees with this saying their “industries [were] strengthened] after the war” also mentioning newer industries emerging and Potter also charges the war with strengthening industry but at a much higher level than Gerstle or Jones. Technology was certainly advancing at this time; we can see this because there were many new inventions such as the first practical respirator nicknamed the ‘iron lung’ and the invention of car radios. In the1920’s the number of households with a radio rose from 60,000 to 10 million which compliments Jones’ view that consumerism rose alarmingly at this time. Also household appliances became more and more common as purchase hire was introduced meaning domestic consumption also rose. Perhaps the motor vehicle industry shows the most advancement as by 1929 workers were often making more than one of Fords ‘Model T’’s a minute due to technological innovation. This industry also demonstrates the rises of consumerism as in 1919 approximately 9 million cars were owned but by 1929 around 26 million were owned. B does not mention the government’s role in the boom which differs from both Potter and Cannadine. Ultimately, although Jones gives credit to the war for strengthening some newer industries he mostly gives credit to technological innovation and advancement as acting as a catalyst for the boom. His argument is partially valid as technological advancement and innovation caused industry growth and increased consumerism which is also supported by Gerstle however he gives the war limited credit saying its only contribution was aiding the growth of some industries whereas Gerstle and Potter feel its role was far more important.
In interpretation C, Gerstle gives liberal credit to the war although he does mention the short term “strains placed on the American economy”. He also gives credit to technological advancement in preserving the boom. The American economy suffered little from the war for example during 1916 America exported an estimated $1960 million worth of munitions to Britain; Gerstle accentuates the fact that the war left America in a considerably good physical and financial state and infers that this made stable foundations for the boom; this is more than could be said for any European country. Conversely, Cannadine suggests the war did nothing to contribute to America’s or the world’s economy by saying it was a “stricken post-First World War world”. Gerstle believes this comparably exceptional condition, and an insistent need for goods from foreign countries allowed America to become the world’s leading creditor nation; some $7 billion in foreign investment was present in the United States, while their investments abroad totalled $3.5 billion. Their main competition was essentially gone as many countries that had been directly involved in the war were severely physically and economically damaged.
The US were then able to invest in their growing economy and in expanding industry instead of having to rebuild. Gerstle comments on how the government helped large corporations and banks consolidate their power and reasons that this is what bought productivity and efficiency to new heights. Potter agrees with this to an extent; although he believes that the government helped raise productivity he clearly states the trigger was the war contrasting with Jones, who more comparably to Gerstle, is convinced that technological advancement was a larger factor in raised productivity. Gerstle adds in a sarcastic tone that “capitalists claimed [poverty] had been banished”, this coincides with Cannadine who also acknowledges that the prosperity would never reach the whole of America. Climactically, Gerstle believes the war laid a good foundation for the boom to begin and that advances in technology and government cooperation enhanced the boom. This argument seems valid as it encompasses both Jones’ and Potters views and the surrounding evidence coincides with Gerstle’s view.
In interpretation A, Potter is convinced that the war acted as a catalyst for “both agricultural and industrial expansion”. The war certainly helped many areas of industry in America as they were supplying provisions to many countries in Europe. Gerstle and Jones agree with this to an extent as they believe the war helped strengthen many industries however they do not place as much emphasis on its industrial role as Potter. After the war the demand was still pressing as many European countries were physically damaged whereas America was in good condition and able to supply European countries with what they needed. Gerstle also acknowledges this great demand that was born from the war when he says “the war needs of allies had created an insatiable demand for American goods and capital”. Potter also believes that labour shortages during the war acted as the impetus for increased efficiency as the government was forced to enhance productivity through capital investment. Contrarily Jones argues that this productivity was down to technological innovation and the scientific management theory initiated by advancing technology, not the war.
Potter suggests that the experience of wartime administration and due to wartime needs there was formed a business and government cooperation that had not existed before the war which can be seen through the government’s laissez faire attitude. Potter implies that regulations made by the government when they were not interfering with America’s economy stemmed from the war, such as the lowering of taxes which were lowered by 40 per cent between 1920 and 1928. This allowed people to more easily spend money freely and enter into the consumer boom. Gerstle, and to some extent Cannadine when he acknowledges that “Mellon knew what was good for businesses”, also comment on this cooperation and how it contributed readily to the boom. Fundamentally, Potter clearly believes the main reason for the booming economy in the 1920’s was the war as he suggests that it was an impetus for industrial and agricultural expansion, a motivation for increased productivity and the reason for the government’s savvy when it came to the business economy. Although Potter emphasises the role of the war greatly, it appears reasonable that it would be a stimulus for capital investment, industry growth and increased productivity and his view is supported heavily by Gerstle.
Conclusively, Potter, Jones and Gerstle all give some level of credit to the war in catalysing, preserving or enhancing the booming economy in 1920’s America however Cannadine gives the war no credit, instead highlighting the actions of Andrew Mellon and the government in causing the boom. Jones believes although the war strengthened some areas of industry it did not play as larger part in the boom as technological advancement and innovation. Gerstle implies the war supplied America with a stable foundation for the boom and means of bettering their economy and also gives credit to technological advancement, perhaps not suggesting the war was wholly responsible for the boom. Potter suggests the war was the main reason for the boom accentuating its role in forcing the government to cooperate with businesses and invest in increased working productivity and stating it acted as an impetus for both agricultural and industrial expansion. Overall the war seems to act as an incentive for industry growth, increased productivity, government policies and perhaps, as a result of these things, technological advancement.