The distribution of wealth was, I believe, the main factor in the economic problems of the USA. However it wasn’t the only factor there were others such as: – Agriculture, trade and the government. The term ‘distribution of wealth’ means something that is owned by a person that has a cash value such as an automobile or a refrigerator. It is also bought at a specific point in time and is therefore different to income as that is over a measured period of time. Wealth varies in many different areas and for many different purposes such as savings, education or inheritance.
The distribution of wealth was fairly uneven across the USA, as everyone seemed to be buying consumer goods i. e. cars etc. Firstly the Rich, they bought goods as they could easily afford them. Then the middle classes, these could almost afford the cost of consumer goods yet still needed to borrow money from banks. Finally there was the poor culture of America, these could nowhere near afford the prices but they borrowed money because they wanted them so badly. The money that had been borrowed obviously needed paying back with interest and this therefore meant that the poor were getting considerably poorer but the rich were getting richer.
In the 1920s America enjoyed what was to become known as ‘an age of excess’. In 1921 the gross national product was $74 billion, by 1929 it was $104. 4 billion. The 1920i?? s boom was created by several factors that worked together. There was a substantial growth in production, profits, job wages and the standard of living. These elements worked in a cycle of cause and effect and supply and demand. The growth in production created more jobs, and because more people had more money they could buy the newly produced goods. More goods needed to be produced so more jobs and profits were created.
This led to the twenties seeing the start of mass production and consumerism. For the first time items like cars and refrigerators were available and affordable to the middles classes and this meant secondary industries such as advertising became very profitable. People spent money as quickly as it was gained. The motor industry was greatly benefited by the Boom as the amount of car sales, and so cars on the roads rose. This meant jobs were created in building cars, building roads, building roadside diners and advertising; a tertiary industry.
The other side of the argument is that the government provided no welfare support for the poorer people. Agriculture suffered greatly as prices fell to the advantage of the consumer. Black Americans were also not part of the great American boom of the twenties. So there was poverty in the midst of plenty that was largely overlooked. The Boom changed much of American Society. Six million families, just under half the population, had an income less than $1000 a year. These people could certainly not afford the new luxuries.
Agriculture also suffered a huge decline, even though it was once the primary industry of America. Farm prices fell, to the advantage of the consumer and led to widespread closure, especially in the South. Black people also did not share in the Boom. Segregation and racial prejudice meant that they were forced into the most badly paid jobs and given the worst education. During the boom there was a cycle of people having more money to spend, and businesses making more profits and more jobs, and also secondary and tertiary industries starting, creating a more affluent society.
Many however did not share in this affluence, and there were also still underlying problems with the economy. Items like fridges and radios could only be bought once and demand soon died down. The Boom was soon to come to a remarkable and abrupt end with the Wall Street Crash. I conclude that the distribution of wealth was a very important factor in the economic problems of the USA in the late 1920’s and early 1930’s, But was influenced mainly by people living in urban areas who were poor and rural areas who were rich.