History of the U.S. Economy in the 20th Century

Course No. 529
Professor Timothy Taylor, M.Econ.
Macalester College
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Course No. 529
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Course Overview

When Professor Timothy Taylor, managing editor of the prestigious Journal of Economic Perspectives, tells you that the stock market crash of 1929 was not a substantial cause of the Great Depression and that F.D.R.'s New Deal may have actually slowed economic recovery, he speaks with authority and credibility.

Those are only two insights that run counter to common understanding of U.S. economic history. That history is far too interesting—and far too important to our future—to be dismissed with a few stock explanations.

Vital Economic Lessons of the Last Century

This fast-paced course introduces you to vital economic lessons learned in the last century to provide invaluable guidance for understanding the current economy.

Each of 10 lectures focuses exclusively on one decade to achieve a clear understanding of economic developments and outside influences on the U.S. economy.

In some cases, you examine well-defined events like the creation of the Federal Reserve or the war in Vietnam. In other lectures, you explore larger societal shifts, such as the evolving role of women in the economy and changing consumption patterns.

"Of course, knowing what happened in economic history does not offer easy answers to today's problems," states Professor Taylor. "Times change; the past rarely offers a perfect template for the present.

"But knowing the history does help discussions about the present to get off on the right foot, free of at least some of the myths and ignorance that can so easily lead us astray. As always in the study of history, knowing where you came from helps us to learn who you are and where you are."

Professor Taylor takes care to ensure that you can follow this course clearly regardless of your knowledge of economics.

He uses historical examples and quotes from economists and other notables, and his use of economic reasoning often brings surprising insight.

He is the editor-in-chief of the Journal of Economic Perspectives. At Stanford University he won the award for excellent teaching in a large class given by the Associated Students of Stanford University.

At the University of Minnesota, he was named a Distinguished Lecturer by the Department of Economics.

Explore the U.S. Economy Decade by Decade

"An economy operates on many levels, and so must these lectures," states Professor Taylor. "The discussion must touch on the lives of ordinary people: their patterns of consumption, work, and education. It must describe the rise and fall of industrial conditions and unions.

"At the national level, the discussion moves to government budget and monetary policies and the conditions of growth, employment, and inflation. Finally, at the international level, there are issues of how people, capital, and goods flow across borders."

A decade-by-decade course structure includes memorable milestones.

For example:

  • In adjusted numbers, the per capita GDP of 1900 would equal $5,000. This GDP per capita of $5,000 was a fifth of what it was in 2000. This was still a high standard of living.
  • During World War I, the U.S. ran a trade surplus due to an increase in exports, using the earnings to pay off debts and make loans to European countries.
  • In the 1920s automobiles became the country's largest industry and led the way to other inventions.
  • Mismanagement of monetary policy was the main cause of the Great Depression.
  • The Employment Act of 1946 gave the federal government the responsibility to maintain high employment, growth, and stable prices.
  • The broader public policy agenda of the 1950s was quiet. Other than the Korean War, the government enacted few major policies. It is unknown if this economic stability was healthy or stagnant.
  • Productivity slowed down dramatically during the late 1960s and early 1970s and had terrible effects on the U.S. economy.
  • The strangling inflation of the 1970s spilled over into the early 1980s. Federal Reserve Chairman Paul Volcker used a recession to break the inflation.
  • In the 1990s perception of job insecurity differed from reality. Job insecurity led to economic insecurity.

Lecture 1, the 1900s. You discuss the status of both the country and the economy at the turn of the century as well as the role of the federal government regarding mergers, social legislation, and inflation. "Overall," notes Professor Taylor, "this decade is marked by financial chaos."

Lecture 2, the 1910s. You discuss the government's creation of various federal institutions and the consequences that World War I had on both the government and the economy as a whole. You also examine Frederick Taylor's concept of scientific management and conclude with a discussion of the gentle changes in living standards.

Lecture 3, the 1920s. Although titled "The Roaring 1920s," you begin with a discussion of the Recession of 1920-1921. This recession was followed by the consumption boom marked by the transforming technologies of electricity and the automobile as well as developments in macroeconomic policy. It is this boom which then gave the decade its nickname.

Lecture 4, the 1930s. The fourth lecture highlights the Great Depression, which you learn was most likely caused by a mismanaged monetary policy. You also examine the merits of the New Deal and its role in U.S. economic recovery.

Lecture 5, the 1940s. World War II and its aftermath dominated the 1940s. You survey the economic effects of the war and examine how they actually contributed to the country's economic recovery. More specifically, you look at the war's effects on the federal budget and the reshaping of the U.S. economy. You conclude with an examination of the global institutions built by the U.S. to restore trust in the world.

Lecture 6, the 1950s. "Our task in Lecture 6 is to determine whether or not the quiet boom of the 1950s was beneficial for the U.S. economy," says Professor Taylor. You learn that while this decade revealed many healthy signs of prosperity, it remained plagued by controversies and, thus, future economic uncertainty.

Lecture 7, the 1960s. You pick up with the uncertainty as you investigate the 1960s. You look at the various ways that macroeconomic issues influence the way our country is run. You also discuss the building of the Great Society and antitrust and immigration issues.

Lecture 8, the 1970s. This uncertainty takes you to the confusion of stagflation which lingered throughout the 1970s: two recessions and the creation of price controls, floating exchange rates, and expanding global trade. You also closely examine the productivity slowdown of the 1970s.

Lecture 9, the 1980s. You examine the effects of 1970s inflation on 1980s economic stability. This leads into a discussion of the causes and consequences of the budget and trade deficits. You also look at changing market structure and its effects on deregulation.

Lecture 10, the 1990s. To conclude, you focus on misperceptions of the inequality and insecurities of the 1990s and discuss an economic and social agenda for the 21st century.

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10 lectures
 |  Average 45 minutes each
  • 1
    The Curtain Opens on the 20th Century
    This introductory lecture previews the course. Beginning with the 1900s, we look at the demographics and economics of the time and make comparisons to the present day. This leads into a discussion of the popular issues of the decade. We look at the federal government and how it began its role in economic policy. We examine how inflation, the gold standard, and the Panic of 1907 led to financial chaos. x
  • 2
    Big Government Is Conceived—Income Tax, the Federal Reserve, World War I
    During the second decade of the 20th century, the government created and developed institutions that shored up the country's economy, including the federal income tax, the Federal Reserve, and antitrust legislation. World War I transformed the United States into an international creditor and increased both government spending and revenue. The government created a federal debt ceiling, regulated labor, and nationalized certain industries. Finally, the war boom led to a recession. Meanwhile, both business and government adapted Frederick Taylor's ideas of scientific management. x
  • 3
    The Roaring 1920s
    Before discussing the decade's boom, we examine the causes and consequences of the recession of 1920–21. Electrification and the automobile fed a consumption boom and greatly affected the U.S. economy. Also, the government and the Federal Reserve used macroeconomic policy to spur growth that led to virtuous circles which in turn led to increased inequality. Limits on immigration, expansion of the education system, and the electrification of industry affected labor conditions. Finally we learn about the connection between economic growth and rising wages, and the importance of putting economic transformations into perspective. x
  • 4
    The Depression Decade of the 1930s
    This lecture describes both the notoriety and the causes of the Great Depression. Causes included the stock market crash, a decline in aggregate demand, and most importantly, mismanagement of monetary policy. We discuss the major elements of the New Deal and assess their merits and economic viability. While many of the regulations created during the 1930s benefited society, they did little to produce an economic recovery. x
  • 5
    The 1940s—World War II and its Aftermath
    This lecture discusses how World War II led to tremendous growth but was not the sole factor in ending the Great Depression. The war did expand the income tax, raise the government debt, and increase the size of the federal government. It also reshaped the economy as a whole; the government intervened in markets, unions grew, jobs shifted in nature, wages compressed, labor markets for minorities changed, health care spending rose, and the baby boom began. Finally the U.S. government contributed to rebuilding global institutions by developing the Marshall Plan, the International Monetary Fund, and the General Agreement on Trade and Tariffs. x
  • 6
    The Quiet Boom of the 1950s
    The lecture starts with a summary of the first half of the century and then a discussion of the economy of the 1950s. This decade, realized healthy growth but also produced a feeling of stagnation as unemployment, inflation, and public policy slowed as the 1950s neared a close. The decade had both health as well as difficulties that would persist throughout the rest of the century. Healthy signs included gains in wealth, science, technology, and education, and a decline in the poverty rate. But concerns rose about the military industrial complex, urban decline, exposure to foreign trade, unionization, and the growth of service sector jobs. x
  • 7
    The 1960s and the End of Certainty
    In this lecture we discuss how macroeconomic uncertainty affected the economy. Tax cuts, as well as increased military and social spending, marked this decade. Similarly the Great Society was established, based on the Civil Rights Act of 1964, Medicare and Medicaid, the War on Poverty, the expansion of the regulatory state, and scientific research and exploration. Finally, sentiment toward antitrust and immigration changed. x
  • 8
    Stagflation and the 1970s
    Snarling inflation and roaring stagflation marked the 1970s as wage and price controls combined with oil shortages led to two recessions. The decade also faced a return to the global economy as the country instituted both floating exchange rates and increased global trade. Most importantly, a major slowdown in productivity affected the 1970s. Finally the government enacted new welfare entitlement programs, such as Medicare and Social Security. x
  • 9
    A Decade of Debt—The 1980s
    The early 1980s still felt the effects of 1970s inflation. Federal Reserve Chair Paul Volcker used recessions to finally end the devastating inflation. We discuss how a combination of increased defense spending, the income tax cut, the expansion of Social Security, and the higher government interest payments caused the trade and budget deficits. The consequences of these deficits included the crowding-out of domestic investment, the growing trade deficit, the returning of the United States to debtor nation status, and the slowing of long-term growth. Finally markets changed as deregulation hit the airline, savings and loan, and oil industries. Also, IBM and AT&T faced antitrust concerns, and the popularity of mergers and leveraged buyouts increased. x
  • 10
    Inequality and Insecurity in the 1990s
    This final lecture compares the current standard of living with the one at the turn of the century. We discuss the largely misunderstood insecurities of the 1990s workplace. The decade began with low job growth and a minor recession, and a boom in mergers and increased inequality also contributed to a feeling of insecurity. We discuss a possible economic agenda for the 21st century. We discuss the prudent use of monetary policy to prevent inflation and recessions, the benefits of opening global trade, and the importance of reducing the federal budget deficit. Also we discuss the power of markets and the importance of planning for the aging of the baby boomers, getting the most out of all people in the workforce, and nurturing the various seeds of growth. x

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Your professor

Timothy Taylor

About Your Professor

Timothy Taylor, M.Econ.
Macalester College
Professor Timothy Taylor is Managing Editor of the prominent Journal of Economic Perspectives, published by the American Economic Association. He earned his Master's degree in Economics from Stanford University. Professor Taylor has won student-voted teaching awards for his Introductory Economics classes at Stanford University. At the University of Minnesota, he was named a Distinguished Lecturer by the Department of...
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History of the U.S. Economy in the 20th Century is rated 4.5 out of 5 by 48.
Rated 5 out of 5 by from Enlightening Appreciate Dr. Taylor's liberal use of data to quantify his analyses. He ties together many strands of economic activity to provide a full picture of each era. His rather rapid presentation pace requires an occaisional relisten but admire his enthusiasm for the subject.
Date published: 2018-12-25
Rated 5 out of 5 by from Decade by Decade In this course Professor Timothy Taylor’s scheme of devoting one forty-five-minute lecture to each decade works very well even though, as we know, some important economic events, like World War I, lasted for less than a decade, or cut across decades, like the Great Depression from 1929 to 1939 or the Long Boom from about 1949 to 1973. While he doesn’t overtly state a unifying theme for the course, there plainly is one—growing and very complex intervention by the US government. Already in the nineteenth century Congress raised or lowered tariffs, set up the Second Bank of the US (which Andrew Jackson destroyed), regulated the money supply by favoring a gold standard, subsidized railroad construction and western settlement, and passed the Sherman Antitrust Act. In the twentieth century, though, the federal government did so much more. Its functions have included regulating the money supply through the Federal Reserve system, limiting or enabling immigration, controlling production, prices and wages during wartime or economic crises, suppressing and later protecting labor unions, raising money through an income tax, establishing work relief, setting maximum hours and minimum wage rates, building infrastructure—especially our interstate highway system—funding scientific research, banning racial and gender discrimination, running budget deficits, establishing important social insurance and antipoverty programs, requiring consumer and environmental protections, and cleaning up after failed lending institutions. In the first third of the century even the US Supreme Court took a hand, promoting corporate interests by protecting companies from antitrust legislation, striking down worker protection laws, and voiding much of the New Deal; fortunately, it stopped being such a nuisance after the mid-30s. Since World War II the US has cooperated with foreign governments through the World Bank, the International Monetary Fund and general agreements to reduce tariffs. Of course, state governments have been significant actors too, but Taylor doesn’t have time for them. In light of historical experience, the perpetual hope of neoclassical economists that they can and should convince governments to let the economy fend for itself turns out to be a naïve delusion. Taylor is a cautious optimist. He begins and ends by comparing America’s economy and standard of living in 1900 with that 1996. In the former year, the US was already one of the world’s richest countries, but next to its more recent self it was a place of grinding poverty and hardship. Americans now (in 1996) work shorter days and enjoy an incredible bounty of electrical and electronic laborsaving appliances that would have seemed nearly magical a century earlier, together with automobiles and passenger air service. As a rule, nearly all newborn infants now survive to adulthood rather than suffering a fourteen-percent mortality rate as they did in 1900. This is the world we have gained through capitalism under government management, despite several destructive wars, several recessions and the Great Depression, oil shocks and the stagflation of the 1970s. To make things better still in the newly arrived twenty-first century, he recommends balancing the budget (to free investment capital for the private sector), investing more money in research and education, forcing open more high-level jobs to women and African-Americans, restructuring health care to make it more efficient and helpful, trim down Social Security and Medicare spending to protect them from the baby-boom surge, and deregulating the banks. Alas, for the last two items, these ideas have found no favor with the party most frequently in power since 2001. There is one serious failing in this course. Professor Taylor has the bad and lazy habit of ending many sentences with phrases such as “things like that,” “stuff like that,” or “something like that.” If you find yourself running out of meaningful words, stop talking and put a period on your sentence! I also have minor objections to the course content. His belief that banking deregulation would promote growth has been laughable not only since the 2007-08 crisis, but also since 1929. Although he acknowledges racism and sexism as economically significant, he could have said more about their effects in labor and housing markets. He might also have reflected on possible connections between the federal government’s warfare or imperialism abroad and its economic role at home. None of these problems persuades me to deny the course my top rating, however. It is well worth its low price as an audio download, and I recommend it.
Date published: 2018-08-10
Rated 5 out of 5 by from An excellent economic survey course Don't worry overly much about the reviewers put off by the fact that this was recorded at the end of the 20th century. The professor is highly engaging and informative.
Date published: 2018-05-17
Rated 2 out of 5 by from Outdated: Still Interesting audio download version As other, recent reviewers have noted, this course, more than any others I have taken, badly needs to be updated. Not only that, a course with a copyright date of 1996 (meaning that it probably was written in 1995, should not be titled, "History of the U,S. Economy in the 20th Century". For shame, TGC. Even so I award a second star and a third bar for Course Value because of the very excellent material and presentation of the first 60% of the century. I like Professor Taylor's style, but he should not have accepted this assignment. Not Recommended
Date published: 2016-12-03
Rated 2 out of 5 by from Course Recorded in *1996*! Be forewarned: History changes. As hindsight accumulates, so does interpretation. This course does a fine job of detailing the 20th century through the 1960's, but starting with the 1970's, the lack of interpretive time becomes evident. "Trends" that showed up in 1996 have since turned to bubbles or blips. Some sample anachronisms: - An analysis of the direction of telecommunications .. that doesn't include wireless - A belief that the Fed has perfectly and adequately honed its toobox - An exhortation to repeal Glass-Steagall because banks should be allowed to make riskier investments Essentially the last two lectures serve better as a time-capsule of economic thought (before Friedman renounced supply-side economics), than as history. It's disquieting to be reminded of just how badly our best experts can miss the mark. Be forewarned.
Date published: 2016-09-19
Rated 3 out of 5 by from Outdated Interesting topic, but recorded in 2011 and now 5 years out of date. Professor Rodriguez is pretty dry.
Date published: 2016-08-23
Rated 4 out of 5 by from A Fast and No Frills Approach to the US Economy Audio. This is my second course with Prof Taylor and I am struck by how exceptional his lecturing style is. He generally keeps my attention on Economics, a topic in which is described as "dreary" (by the professor himself). To be direct about it, I just do not think I would've been able to finish this course if it was not for Prof Taylor's fast talking style and fast-paced lectures. Each presentation is 45 mins with a total of 10 lectures divided by decades in the 20th century. As part of the popular audience on this Economics subject what I found most interesting was the topics that were not taught during the school years including a picture of the American population's standard of living in the early 20th century, the formative years of unions, the lessor known trade/tariff agreements, etc. There is also an interesting and informative statistical snapshot on the US economy of the 20th century at the end of the course book.
Date published: 2015-09-16
Rated 4 out of 5 by from Very Well Done Timothy Taylor is one of those professors who I think could hold my attention on just about any topic he chose. As it stands, Economics is one field of study I find myself woefully uninformed on. As a new presidential election approaches in 2016, I anticipate LOTS of Economic discussions, so I figured I'd try to get up to par. This course is largely a great one, but suffers a bit in that it was recorded right around the year 2000. Much of the Economic results from the policies of the 90's & even the 80's had not yet been felt. Professor Taylor's analysis of those decades was necessarily incomplete. Prior to those decades though, The course was pretty solid and timeless. The Economic lessons learned from the 1930's were pretty well understood in 2000, so I doubt another 15 years would have shed much more light. Overall, I'd definitely recommend this to a friend, but with that one caveat.
Date published: 2015-07-31
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