American Capitalism can be seen as the economic system in which private individuals and business firms carry on the production and exchange of goods and services through a complex network of prices and markets. There are a number of key characteristics of American Capitalism. First, is that basic production facilities, thus land and capital, are privately owned. Second, economic activity is organized and coordinated through the interaction of American buyers and American sellers (or producers) in markets. Third, owners of land and capital as well as the workers they employ are free to pursue their own self-interests in seeking maximum gain from the use of their resources and labor in production. American consumers are free to spend their incomes in ways that they believe will yield the greatest satisfaction. And fourth, a minimum of government supervision is required; if competition is present, economic activity will be self-regulating. .
Thus, although American Capitalism gave rise and support to America being the land of freedom and prosperity, the sharpest challenge came in the 1930s. The Great Depression was by far the most severe economic upheaval endured by American Capitalism. Thus, no event of the twentieth century had a more profound impact on American life than the Great Depression of the 1930s. It was seen as the worst and longest economic collapse in the history of the United States of America, lasting from the end of 1929 until the early 1940s. Statistics can document a slumping economy, mass unemployment and swelling relief rolls. However, although the Great Depression was seen as a disaster in its own, it revealed many underlying economic weaknesses about the nature of American Capitalism. .
The self-centered attitudes of the 1920s seemed to fit nicely with the needs of the economy. Modern industry had the capacity to produce vast quantities of consumer goods, but this created a fundamental problem: Prosperity could continue only if demand was made to grow as rapidly as supply.
