Answer: During World War II, Americans had saved billions of dollars. Flush with cash, they were ready to go on a spending spree as soon as factories could convert from war production to consumer goods. This surge in consumer demand encouraged businesses to expand production. By 1955, the United States, with only 6 percent of the world’s population, was producing almost half of the world’s goods.
As the economy grew, incomes rose. Real income is income measured by the amount of goods and services it will buy, regardless of inflation. By the mid-1950s, the average American family had twice as much real income to spend as the average family of the 1920s had. And spend it they did.
Not only were Americans spending more money than ever before, they were also spending it in different places. In the past, most people had bought their goods in stores lining the main street of town. By the mid-1950s, however, suburban shopping centers were luring consumers away from downtown shopping districts. Shopping centers offered customers easy parking and a wide array of shops to browse, often in air-conditioned comfort. By 1964, there were more than 7,600 shopping centers across the United States.
Businesses used methods pioneered during the 1920s to encourage consumers to keep on spending. One method was slick advertising campaigns. By 1955, businesses were spending $8 billion a year on ads that encouraged consumption.
Another method was to offer consumers easier ways to buy now and pay later. Large stores issued charge cards that allowed their customers to charge goods to an account rather than pay cash. By 1960, Sears Roebuck had more than 10 million accounts, or one for every five families. In 1958, American Express launched the first all-purpose credit card that could be used in stores, hotels, restaurants, and gas stations.
A third method used to encourage consumption was called planned obsolescence. Brooks Stevens, the industrial designer who popularized this term, defined it as a way to create “the desire to own something a little newer, a little better, a little sooner than is necessary.” Businesses using this method looked for ways to make what a consumer bought today seem obsolete, or out-of-date, after a fixed period of time. Clothing companies did this by introducing new fashions every season. As they did so, last season’s garments, although still usable, looked dated. Automobile companies did the same thing by changing the styling of their cars every year.
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