The Methods of American Business in Early 20th Century
A little more than a hundred years earlier, United States was an isolated country and the attitude kept developing during that period. The Senate did not want to ratify the Versailles Peace Treaty that ended the First World War and went to an extent that the country did not even join the League of Nations. Free migration into the country that existed earlier was stopped, business tariffs for imports were increased, and migration from Asia was practically stopped.
Yet, the country had some special capabilities and one of that were the regularities in the modes of production in the country. The production in America made simpler and rougher goods, used much less of skilled labor since machines and organizations succeeded in taking over a lot of their responsibilities. (Delong 1997) Thus some methods of American business had been developed even before the start of the twentieth century and this may have given the country the lead.
It is difficult to ascribe to any particular reason the changes that took place in the American economy during the period before the Second World War America was not one of the leaders of the Western World then as can be seen from the fact that both the World Wars were started by European countries and fought for quite some time by those countries, and America only entered the conflict when it was felt that the tradition of democracy was about to be lost. Yet, there were presidents like Hoover who felt that decline of economy was hurting the American labor.
This view had also been taken in 1917 when the government had decided to nationalize the single largest of American industries at that time – the railroads. (Vedder 1997) To a certain extent, the matters of politics and industrial changes were related and the biggest amount of relationship is found in the case of election of one of the most charismatic of American presidents, Frederick D Roosevelt. One of the reasons for his victory at the elections in 1936 is said to be the support given to him by the American Labor.
This encouraged the labor union in the hands of CIO to seek more power and even challenge the authority of one of the country’s most powerful companies, General Motors. During this period, the company was one of the most profitable and probably the largest organization in the country. This was recognized by the magazines of the time also. The company had 110 manufacturing plants situated all across the country, employed over 250,000 people and was owned by more than 500,000 shareholders.
Yet, the attitude of the labor unions irritated the management and made them hostile to both the unions and the New Deal. At the same time, there was the Second World War in progress. (Lichtenstein 2003) Thus to an extent, the development of industry was being hindered through political ideas, but it is difficult to say who won. After the passing away of Roosevelt, the attitudes changed and the unions ended up loosing most of their power.
That was also probably due to the conflict of the American system with the Russians who had come up as the most powerful country in the continent of Europe. The growth of the industries of the country was of industrial products and the chief among them was the automobiles followed closely by radios, consumer appliances and development of suburbs. The situation can be understood when we understand that the country had enough vehicles on the road to say that it had more than one vehicle for every five in the population.
This is an achievement which many countries cannot state even today. The reason for the development of the country was mass production and that also made it the richest society existing in the world. (Delong 1997) Though all the inventions were not made in the country, but it made sure that large numbers were produced here as it had both the capacity to produce and the purchasers for the goods. It would be wrong to say that there was importance only of production for the War, but production had started earlier.
The thought behind this development was the thinking of the major leaders of American business like Henry Ford, Thomas A. Edison, Edward Filenes, and George Swope of General Electric among others. The depression due to the stock market crash in 1929 was hurting people of the country and the president was viewed as a successful business person and he was trying to persuade business to provide help to the people of the country through more employment. (Vedder 1997) Thus it is difficult to say that production for war had any major impact on development of business prior to the start of the War.
At the same time, after the production capacities were built up for the war, then one of the major questions was the utilization for utilization of this capacity after the War. This problem had also been seen in 1929 when part of the reasons for the crash was a drop of requirement of goods and services apart from the rather insane growth of the stock market. This was solved through the Marshall Plan and other methods. It helped America to keep on producing against loans to be repaid by much poorer countries, some of whom were never able to repay.
The changes in domestic economy over the century have not been remarkable and practices of American consumers have not changed much. There are a lot of realistic impulses within the American consumer which is tied up with the idealism that is sought to be promoted. It contains emotions for freedom and self-fulfillment as the country started with that dream, but, at the same time, many Americans found it difficult to pay for those dreams from their savings and yet required the items as they were felt to be the basis for their identity.
This was not accepted in many of the religions that the country started with, but even before the start of the twentieth century it was estimated that the domestic citizens of the country had an eleven trillion dollar of loans in private debt. (Horowitz 2003) This was spread among different people like the urban working class having loans with pawnbrokers, agencies providing small loans and retailers selling goods on installments. Even for building houses, loans were taken from building and loan associations which had to be paid over a period of five years.
In spite of the fact that this facility of loans provided a lot of help to individuals in purchases, yet many traditional social workers, economists, clergy, bankers, retailers and newspapers did not like them. (Horowitz 2003) The tradition continues and people still keep taking loans through credit cards and many other methods. Houses are pledged repeatedly so that increase in prices can be taken advantage of. The tradition continues. Post WWI Business (New Industries): This is very difficult to say as many industries are now produced in small parts.
On the other hand, in America the individuals decided to concentrate on their private life. The efforts were to separate their lives from others through building up of walls, more prestigious houses with lawns and have a large number of machines – washing machines for clothes, refrigerators to store food and a number of stoves which could be used only for individual dishes. (Delong 1997) Thus one would say that efforts were more on showing off individuality than on development as a social group.
It is clear that after the Second World War, the International position of the American economy was viewed differently by the powerful bureaucrats and politicians within the country. There was the history of two major wars, stated by other countries, which were not resolved without the interference of America, though the entire course of wars was fought on other continents. This helped America as her countryside and people were not directly ravaged. The situation was seen clearly in Germany which had lost a lot of its able-bodied men as did France.
This had led to those countries allowing a large number of immigrants to come in and some problems for this are being seen in France today. Even during the balance of the twentieth century when Soviet Union collapsed, the sufferings were more directly seen in Russia and other countries. The entire planning of America also reflected this attitude and new organizations like CIA were developed to deal with educationists and others. (Arndt 2005) This shows clearly a feeling that mistakes in the area of political and social thoughts were felt to be possible to resolve through plans.
Thus when America got into some wars like those in Vietnam, Korea and Iraq; the people and the culture of the country could not adjust to the losses for a long time. The realization of the fact that the war was lost took some time to sink in. At the same time, it should also be understood that for all these wars, there have been allegations that business was interested in starting some of them. As the country has changed, the policies have also changed and one of the biggest trends is now to have very large corporations.
It even exists in the field of health care where there have been mergers of Hospital Corporation of America which had the highest turnover with American Hospital Supply which was the biggest supplier of goods to the hospital industry. When this took place in 1985, this was the largest merger in America by organizations outside the oil industry. (Time1985) The point to consider here is that forming of companies leads to increase in profits so that additional benefits can be paid to shareholders, but at the same time, this leads to increase in costs for the patients.
Does it serve the average citizen of the country? Some other difficulties are developed by the systems within the country like requirement of governmental licenses, privileges, subsidy, law and other such advantages. On top of that, there are laws which hinder free trade like the anti-trust cases. (Wright 2002) Yet, the greed among the businessmen does not seem to stop and one of the famous cases was with regard to stock speculator, Ivan Boesky who had stated that “greed is healthy” in 1985. (James 2002) Are the many changes in the attitudes of businessmen in this regard correct?