The Golden Age Of Capitalism Essays Example

In the mid-20th century, the United States economy became prosperous following the end of Second World War in 1945. The economic boom lasted until the beginning of 1970s due to the collapse of Bretton Woods system in 1971 and the oil crisis in 1973. In addition, the crashing of the stock market in the period between 1973 and 1974 contributed to the end of the boom leading to the recession in the 1970s. The high economic productivity that was there before to the world war continued and ended in the 1970s contributing to the boom. The manufacturing industry in particular was aided by the technologies such as feedback controllers that were developed in the late 1930s. The new highway systems, construction of more warehouses and the availability of material handling equipment such as forklifts led to the growth of the wholesale and retail trade. Further, the energy sources were more efficient and less costly as oil was used in place of coal to operate ships and locomotives. This made production less expensive thus the goods were also affordable to the consumers whose purchasing power was high.
The agricultural sector was also very crucial in contribution towards the economic boom due to the introduction of fertilizers, combine harvesters, high yields crops, tractors, and pesticides. During the post war period, there was introduction and expansion of industries such as commercial aviation and television. The industries boosted the economy further. The automobile industry was a major contributor to the economic boom since the number of automobiles produced between 1945 and 1955 quadrupled. The fiscal stimulus policies by the government also contributed to the economic growth. The financial repression at the time led to low nominal rates and negative real interest rates. This resulted in low debt servicing costs thus individuals and businesses were able to access capital at lower costs.
The United States congress wanted to have an economy with full production capacity, full employment and stability of prices. They, therefore, established the employment Act of 1946. The legislature also created a council of economic advisers who were mandated by the provision of economic analysis. The council also had the duty of advising the congress on the development and implementation of international and domestic policy issues. The council was very effective in making technical advances in policy making. They set quantitative targets for the economy that gave the industries a driving force to produce and market their products since they had targets to meet. The council also introduced a more flexible taxation system that enabled the industries and individuals to have more money at their disposal.
The golden era of American capitalism was characterized by increased productivity, the gross domestic product (GDP) and an increase in the middle class in the society. The growth was evenly distributed across all the economic classes. Majority of low-income workers moved to the cities where they could find better employment opportunities.
In conclusion, the economic boom had its various social, political and cultural effects on the citizens. The middle class started migrating from the cities to the suburbs. This was, primarily due to a rise in the number and quality of housing. The financial sector grew significantly with the emergence of various financial institutions and insurance products. There were more job opportunities in the economy thus people’s living standards increased as they were able to earn more and work more. Agriculture was consolidated, making farming a big business. Small farmers who relied on family farms could not compete with the large-scale farmers, and they had to relocate to the urban centers to look for alternative means of employment.