Another decade, another Gatsby. The actors change but the message put forward in the adaptations of F. Scott Fitzgerald’s 1925 book stays the same. The 1920s were as ephemeral as a Champagne bubble. A fake stock market, an illicit liquor business and other falsehoods made Jay Gatsby and others like him into correspondingly false millionaires. The pleasure of the rich, “careless people,” as a character calls them, came at a cost to the rest, especially the middle class, the small people, mere ants in black tie to be trampled by giants like Gatsby at their parties.
The inaccuracy here starts with the cinematic detail. The new Gatsby is set in the early 1920s. The narrator, Nick Carraway, informs us that the stock market is hitting extraordinary levels. But in the early 1920s stocks did not roar ahead like Gatsby’s car. In the summer of 1922, around the time heroine Daisy visits Gatsby in West Egg, the Dow Jones industrial average actually stood lower than it had in the summer of 1919. Even the car prop in this film yields an anachronism: the Duesenberg model Gatsby drives in the film is a copy of a 1929 version, not an early 1920s vehicle.
And the view of the middle class? The central premise of the Gatsby films, that the rich got rich faster than the others, is true. Decades ago, the Nobel Prize-winning economist Simon Kuznets pointed out the increase in disparities in a much admired paper, “Shares of Upper Income Groups in Income and Savings.” Other scholars, seeking precision, suggested a key ratio: the top 7 percent of the nonfarm population gained at a cost to the rest, the bottom 93 percent.
But whether the new gains of the rich did come at cost to the rest is not clear. The scholar Gene Smiley of Marquette University spent much of his career looking at what the nonrich, the ants in Gatsby, that bottom 93 percent, actually got, relative to the rich and more important relative to themselves.
The great broadening between rich and nonrich in 1920 that Kuznets had seen, Smiley found, was perhaps exaggerated by early experts. In addition, Smiley posited, reasonably enough, that what matters to people is not how they are doing relative to the rich, but how they are doing relative to their own past and their own expectations. His data found that real per capita income of the bottom 93 percent of nonfarm households actually increased in the 1920s.
The 1920s began with disruption and trouble. Joblessness plagued cities. Low commodity prices hurt farmers, who struggled to hold on to their farms. Blacks suffered in the angry South and Midwest, where, especially in the early years, the Ku Klux Klan oppressed them and lynchings occurred. Women had voted in their first presidential election in 1920, and many more were college graduates than in previous times. But many believed that all they could do with their education was more cogently assess the drudgeries of mothering.
In an essay called “A Middle-Class Wife” published in The New Republic in 1917, a young math major recounted her shock at the amount of work it took to keep house for a husband and two children. “I shall not tell over the tale of the things there are to do, cooking and mending and washing and baby-tending,” the author, Alice Austin White, wrote.
But then, like a yacht on Long Island Sound, improvements appeared on the horizon. Virtually everyone can agree that the single most important economic factor in the life of workers, middle - or lower- class, is a job. And here the 1920s delivered enviably: after the early recession, unemployment dropped below 5 percent and stayed below that marker much of the time. Wages rose, especially for skilled workers.
The quality of work life improved as well. Historically, Americans had worked on Saturday. But now, because of productivity gains from machines, weeks of 50 or even 45 hours were possible. In 1920, scholars surveyed companies and found that only 32 had cut back to five-day workweeks. By 1927, 262 large companies instituted five-day workweeks. Henry Ford solidified the trend when the automaker moved to five days in 1926. The 1920s are the decade that signaled the arrival of a gift that still means a lot to us: Saturday.
What did people do with their free Saturday? They drove their new toy, the automobile. In 1920, a quarter of families had cars. By 1930, more than half did. What mattered to these drivers was not that a Gatsby had a Duesenberg or a Rolls-Royce, but that they had a Ford.
Material changes also took place right in the home that The New Republic’s author described. In 1920, 35 percent of households had electricity. By 1930, that share was 68 percent. Electricity brought appliances into homes, including electric irons and washing machines. The old drudgery was reduced; women began to enjoy free time. They could even fool around with another great innovation, the typewriter. In short, being stuck in the middle class became more enjoyable in the 1920s.
To see America’s 1920s middle-class experience in context, it helps to consider how we think of the rest of the world today. Specifically, it is important to ask what material benefit symbolizes arrival in the middle class elsewhere in the world. Indians have chosen their definition, one that makes sense to the rest of us: indoor plumbing. If a family has an indoor toilet, it is, or is becoming, middle class. The 1920s were the decade when America enjoyed the transformation that India has just enjoyed. At the decade’s start, 2 in 10 American homes could boast indoor flush toilets. By 1930, more than 5 in 10 did.
But that is not all. As the decade progressed, there were other gains. Farmers languished, but those who moved to town did find jobs. Blacks still suffered, but the Ku Klux Klan faltered in the last third of the decade. Lynching did not disappear, but the Historical Statistics of the United States show that the rate of such murders dropped.
What made all this improvement possible? New ideas, and an environment that fostered them. Patents hit record rates. More important, companies began to use the new patented ideas to develop machines in factories that in turn made production much cheaper. The classic case of such improvement was the automobile tire. From 1910 to 1930, the cost per tire of driving 1,000 miles dropped from about $10 to about $1.
It hadn’t always been true in the United States that good ideas found the capital needed to finance them. But in the 1920s, they did. The general sense was that if the rich prospered, the rest might do better than before. This attitude was validated by tax data. The Wilson, Harding and Coolidge administrations all cut tax rates. Following these cuts, more revenue than the authorities had expected flowed in. But, crucially, the wealthy also paid a greater share of the taxes.
Indeed, it might be useful to take some of the policies of the 1920s as models for today. Even those who share Fitzgerald’s fatalism vis-à-vis the 1920s can certainly take pleasure in a simple reality. The past is not always bad.
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