Markets

There are two basic ways in which a market can grow: physically and numerically.

By physically, I mean by reaching more people. This is achieved by transporting goods to markets further and further afield. Roads, railways, ships and planes all do this. Some goods that are perishable, for example, food, need to be transported quickly or else by refrigerated shipping. We are looking at America in the 1920s so that it was roads and railways that made goods available throughout the country, shipping throughout the world. America had few problems with regard to this physical access to markets.

But by numerically I mean by making the goods available to more people, and that means making them affordable to more people. Here America did have a problem: in 1928 the number of Americans living below the poverty line, i.e. those without the means to provide basic shelter, food or clothing, had actually risen and was at an amazingly high 42% of Americans and if we add those on or just above the poverty line, the total is 60%. So 42% of Americans struggled to afford food or clothing, reducing the size of the market in these most basic commodities and reducing the market available to farmers and the textile industry. Whilst it meant the market for such goods as washing machines, refrigerators or cars was markedly less than 50% of what it might have been if more people shared in the wealth of the country as it boomed in the 1920s.

Something to think about when you consider the reasons behind the eventual collapse of that boom.