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Fordist Mass Production
During the 1910s the Ford Motor Company invented the Mass Production assembly line where machines are relied on to increase the production of "capital goods" for profit. (Levy, 283) Henry Ford accelerated the energy revolution, increased the speed of goods production, and advanced the architecture of factories. Overall, this is a key feature of capitalist economies because it enables companies to produce goods more efficiently, at a lower cost which increases profits and drives economic growth. -
World War I
With the US joining WW1, the government heavily invested in military production and infrastructure which created jobs and increased economic growth. The demand for military goods led to a surge in production and profits for businesses. The war also increased government spending which furthered economic growth. The postwar return to the Gold Standard led to price deflation, which surged confidence in the owners of capital who insisted on protecting the value of their money. (Levy, 361) -
The New York Stock Exchange Crash
The NYSE crash led to a decline in consumer confidence, decreased investment, and lessened economic growth. The crash left many banks and financial institutions to close that were heavily invested in the stock market unable to meet the demands of panicked investors who were trying to withdraw their savings. This led to a shortage of credit, demand for goods and continued to impact the economic downturn. It showed the lack of effective regulation and oversight in the financial industry (Levy 370) -
Great Depression
The GD can be characterized by the NYSE crash, a decrease in agriculture prices, rise in unemployment, collapse of production, and price deflation. The stock market crash was the trigger of bank failures and business closures. This period of time 1929-39 highlighted the weakness of the free market system and led to significant changes in government policies, regulations and the protection of workers. Prior to the GD people believed the government should not interfere in free market (Levy, 362) -
Suspension of Gold Standard
FDR suspended the Gold Standard in order for the government to have greater flexibility to respond to the economic crisis of the Great Depression. The suspension increased the money supply and provided liquidity to the financial system. Printing more money helped stimulate economic growth and fix other issues caused by the GD. The price of the dollar devalued gold and other currencies causing US prices to reflate. The global market would be affected since investments were unlikely. (Levy, 599) -
World War II
WW2 can be the key factor that pulled the US out of the Great Depression since it eliminated the unemployment issue. The US needed to produce bombs, planes, and tanks which propelled public investment in factories that were operated by private contractors. Industrial capital did not leave post-war either because many feared a relapse of the Depression. Post-war life also changed with many single-family homes, advertisements or consumerism, and the creation of non-profits. (Levy, 339-340) -
Housing Act of 1949
This act focuses on the bettering of urban cities and tried to motivate private residential home building in the form of income tax breaks and credit subsidies. In the past, there were negative social and economic implications that many low-income families in the US experience in overcrowded housing. Providing federal funding for the construction and renovation of affordable housing caused for an increase in economic growth since it created jobs and a need for real estate markets. (Levy 764) -
The Internal Revenue Act of 1954
This act introduced a range of new tax policies and regulations that affected businesses and individuals. Its main effect was to simplify the tax code and reduce tax burdens. This helped stimulate economic growth by increasing income and encouraging consumer spending. The act also provided tax benefits to businesses that invested in new equipment or facilities causing a promotion of investments and economic growth. This act also helped non-profits become exempt from federal taxes. (Levy, 791) -
The Civil Rights Act of 1964
The Civil Rights Act prohibited discrimination on the basis of race, color, religion, sex, or national origin. This act also challenged the existing capitalist system and promoted greater equality in the workplace. Discrimination limited the economic opportunities for minorities and disregarded the talent of minorities. This act made the capitalist system just and more equitable to promote further economic growth and social stability. Many movements became dangerous for children. (Levy 532) -
The Volcker Shock
In the 1970s and 1980s inflation became a major concern for the American economy but to combat inflation Federal Reserve Chairman Volcker implemented a series of monetary policies including raising interest rates and tightening the money supply. High-interest rates and tighter money supply led to a decrease in consumer spending and business investments which turned into a rise in unemployment and also brought down inflation. Over time his actions created a more stable economy. (Levy, 897)