The individual serves the planning system not by supplying it with savings and the resulting capital; he serves it far more by consuming its products… - John Kenneth Galbraith

All this notwithstanding, the twenties in America were a very good time. Production and employment were high and rising. Wages were not going up much, but prices were stable. Although many people were still very poor, more people were comfortably well-off, well-to-do, or rich than ever before. Finally, American capitalism was undoubtedly in a lively phase. Between 1925 and 1929, the number of manufacturing establishments increased from 183,900 to 206,700; the value of their output rose from $60.8 billions to $68.0 billions.1 The Federal Reserve index of industrial production which had averaged only 67 in 1921 (1923–25= 100) had risen to 110 by July 1928, and it reached 126 in June 1929.2 In 1926, 4,301,000 automobiles were produced. Three years later, in 1929, production had increased by over a million to 5,358,000,3 a figure which compares very decently with the 5,700,000 new car registrations of the opulent year of 1953. Business earnings were rising rapidly, and it was a good time to be in business. Indeed, even the most jaundiced histories of the era concede, tacitly, that times were good, for they nearly all join in taxing Coolidge for his failure to see that they were too good to last.

Let's begin with capitalism, a word that has gone largely out of fashion. The approved reference now is to the market system. This shift minimizes — indeed, deletes — the role of wealth in the economic and social system. And it sheds the adverse connotation going back to Marx. Instead of the owners of capital or their attendants in control, we have the admirably impersonal role of market forces. It would be hard to think of a change in terminology more in the interest of those to whom money accords power. They have now a functional anonymity.

In the modern economy, a slightly bizarre fact, production is now more necessary for the employment it provides than for the goods and services it supplies.