** automobile car United States America economic importance








The Automobile and America: Economic Importance


Figure 1.-- Here we see a very modest American about 1930 with their autmobile, in this case a Ford Model-A. The fact that they had a modest income can be deduced from their clothing and home in the background. It is ascinating that this modest family and their car illustrate one of the most important developments that not obly made the modrn world, but saved Western Civilization from the horific socialist totalitarian powers of the 20h century.

No mechanical device affected the American economy in the 20 century more than the automobile. Much of the growth in the American economy after the turn-of-the 20th century was centered on the new automobile. Americans did not invent the automobile. Here the Europeans led the way. The automobile was invented in German, but had only a limited impact on European economies. No so in America. What the Europeans y produced was a craft product a high-priced play thing for the wealthy. Workers ha to live near thevfactory where they worked. They purchased bikes to get to work. This was the situation in America as well at the turn of the century. A large number of companies made small numbers of autos--all high priced and beyond the purchasing power of workers--even American workers who earned more than European workers. The contribution to the economy was minimal. Bicylcles were more important. Henry Ford changed all of this. Ford produced eight versions of cars before the revolutionary Model T (1908). He started out making high-priced cars like the other companies. The Model-T was different. Ford got the price down to $260. It turned the automobile from a luxury item and plaything for the wealthy. Ford's Model-T became a necessity for the average Joe meaning workers amd farmers. It was inepensive, versatile, and simple, meaning easy to maintain. The United States by 1870s was exceeding economic production levels beyond the great European powers (Germany, France, and Italy) and equaling Britain. Maddison, Angus. Contours of the World Economy, 1–2030 AD. ] And before the turn-of-the 20th-century America a surpassing the great European powers just in manufacturing. The United States by 1910 was beginning to approach the economy of those powers combined and by 1940 (before massive war damage), the American economy reached that level. Much of that masive economic growth in the 20th century was due the automobile industry. And Ford's Model-T was an important factor in the phenoneal success of the Amerian automobile industry. Not only did the industry provide well-paying jobs with good benefits, but there important linkages with supplier industries. Jobs and production in the auto industry support many more jobs and production in supplier and service industries--giving it an oversized role in economy. Not only did the American automobile industry make cars that its wokers could afford, but in doing so dominatd car production aound the world. American subsidiaries led the industry in Britain, Germany, and the Soviet Union. And very importantantly, the United States was the only important automobile manufacturer that also had an important oil industry. As atomobile production increased, the American oil industry shifted from keroscene to gasoline. Amrican trucks played an important role in World War I, but it was the industry centered on the automobile and trucks that provided the back bone for the arsenal of democracy that helped smash the NAZIs and Japanese militarists in World War II. Interestingly, two evil men saw the impotance of the automobile industry--both Stalin and Hitler. Fortunately neither had an industry like America built on economic (capitalism) and political (democracy) freedom. American industry including the automoible industry would also provide the security umbrella that would allow free societies to flourish during the Cold War. It was always difficult for the Soviets to expalin while it was the 'exploited' workers and farmers in the West that had cars, refigerators, and working machines. An in the workers paradices not only could not afford such industrial marvels, but faced constant food shortages. It is not accident that the it was workers led by Solidarity in Poland that began the unraveling of the Soviet Union. Leading in short order to the implosion of the Soviet Union itself.

Early Automobiles

No mechanical device affected the American economy in the 20 century more than the automobile. Much of the growth in the American economy after the turn-of-the 20th century was centered on the new automobile. Americans did not invent the automobile. Here the Europeans led the way. The automobile was invented in German, but had only a limited impact on European economies. No so in America. What the Europeans y produced was a craft product a high-priced play thing for the wealthy. Workers ha to live near thevfactory where they worked. They purchased bikes to get to work. This was the situation in America as well at the turn of the century. A large number of companies made small numbers of autos--all high priced and beyond the purchasing power of workers--even American workers who earned more than European workers. The contribution to the economy was minimal. Bicylcles were more important.

Henry Ford and the Assembly Line (1900s)

The autombile was invented in Germany. But it was seen as a novelty for well-to-do people. America changed that. Henry Ford changed all of this. Ford produced eight versions of cars before the revolutionary Model T (1908). He started out making high-priced cars like the other companies. The Model-T was different. Ford got the price down to $260. It turned the automobile from a luxury item and plaything for the wealthy. Ford's Model-T was within the price range of the average worker. This was accomplished not only by the design of the Model-T, affectionately called the 'Tin Lizzy', but by manufacturing techniques--princupally the assembly line. Instead of the workers moving, the car was amoved as it was assembled in theolant. These techniques were not widely adopted in Europoe. In fact the tradition of European craftsmanship, especially in Germany, rejected the very idea. Assembly line efficent manufacturing became standard in America. The Europeans continued to manufacture cars in small quantities for high-income consumers. The result was an even wider industrial disparity between America and Europe. Cars and trucks began crowding American streets while horse carts were more common in Europe. Ford's Model-T became a necessity for the average Joe meaning workers amd farmers. It was inepensive, versatile, and simple, meaning easy and innepensive to maintain.

Economic Trends

The United States by 1870s was exceeding economic production levels beyond the great European powers (Germany, Britain, France, and Italy). And before the turn-of-the 20th-century America a surpassing the great European powers just in manufacturing. The United States by 1910 was beginning to approach the econmy of those powers combined and by 1940 (before massive war damage), the American economy reached that level. Much of that masive economic growth in the 20th century was due the automobile industry. And Ford's Model-T was an important factor in the phenoneal success of the American automobile industry. As an historian put it, 'America arrives". [Roberts] American economic growth did not taper off after the turn of the 20th century. Nor did European immigration. After the turn of the 20th century, the automobile became a major part of the American economy. The American economy was not just larger than that of Euroran countries, it was now twice the size of the British and German economies and much larger than all the other countries. [Maddison] And this was just when the American automobile industry was at an early stage of development just before World War I. In adittion, Amnerica unlike Britain and Germany and other industrail viuntries was selff suffucebtbin fooid production as well as many rawe materials, especially oil which was becoming important.

Linkages

Not only did the industry provide well-paying jobs with good benefits, but there important linkages with supplier industries. Jobs and production in the auto industry support many more jobs and production in supplier and service industries--giving it an oversized role in economy. Not only did the American automobile industry make cars that its wokers could afford, but in doing so dominated car production around the world. American subsidiaries led the industry in Britain, Germany, and the Soviet Union.

Oil

And very importantantly, the United States was the only important automobile manufacturer that also had an important oil industry. . A black gold rush began in Pennsylvania (1850s). It was part of a series of developments that would make America the most important industrial power by the turn of the 20th century. One of the titans of indudtry was John D. Rockefeller who created a vast mononoly--the Standard Oil Company. The United States controlled most (85 percent) of the world production and refining of oil. Much of this came to be controlled by Rockefeller's Standard Oil monopoly. Rockefeller's monopoly was not to sell gassoline, but primarily kerosene (paraffin) which became the primary home lighting fuel with the decline of the whaling fleet. As atomobile production increased, the American oil indutry shifted from keroscent to gasoline. Oil drilling and petro-chemicals became a part of the American mining complex (mid-19th century). At the time, there was only a limited market for oil, but this changed as kerosene began to become an important home lighting product and then with the perfection of the internal combustion engine, creating a demand for gasoline and diesel. America and Russia were the only industrial countries with domestic oil resources. This would have a major inpact on the 20th century.

Impact

Amrican trucks played an important role in World War I, but it was the industry centered on the automobile and trucks that provided the back bone for the arsenal of democracy that helped smash the NAZIs and Japanese militarists in World War II. Interestingly, two evil men saw the impotance of the automobile industry--both Stalin and Hitler. Fortunately neither had an industry like America built on economic (capitalism) and political (democracy) freedom. American industry including the automoible industry would also provide the security umbrella that would allow free societies to flourish during the Cold War. It was always difficult for the Soviets to expalin while it was the 'exploited' workers and farmers in the West that had cars, refigerators, and working machines. An in the workers paradices not only could not afford such industrial marvels, but faced constant food shortages. It is not accident that the it was workers led by Solidarity in Poland that began the unraveling of the Soviet Union. Leading in short order to the implosion of the Soviet Union itself.

Sources

Maddison, Angus. Contours of the World Economy, 1-2030 AD

Roberts, Andrew. A History of the English Speaking People--Simce 1900






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Created: 7:39 PM 5/17/2019
Last updated: 6:38 AM 5/13/2021