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 < Back to Contents  Chapter Fourteen: BUSINESS Gross Domestic Product Business Cycles Business Revenues Trading Volume Dow Jones Average Stockholders Crude Oil Energy Consumption Patents Imports and Exports Foreign Investment
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Business Revenues |
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The sheer size and growth of American business is difficult to comprehend. In 1939, American businesses had revenues of $2 trillion (in constant 1999 dollars). By 1996, these revenues had increased ninefold to $18 trillion, while the population had only doubled. As the chart indicates, between 1939 and 1996, the business revenues of corporations increased nearly tenfold, while those of partnerships and proprietorships grew sevenfold and threefold, respectively. This remarkable growth in business revenues had three major components. Part of the increase represented a transfer of social activities to the business sector. Child care, for example, was almost completely noncommercial in 1939. By 1992, child care had become an $8 billion sector of private enterprise (see page 38). The largest component of the growth in business revenues, however, represented an increase in the quality and quantity of products and services. Most of the products available in 1939—automobiles, for example—were available at the end of the century, but in greater quantities and with much better quality. The final component of the increase in business revenues was the introduction of new products and services. Television shows, computer virus protection programs, and feng shui real estate consultations represented entirely new sources of business revenue. Between 1939 and 1996, the proportion of business revenue that went to corporations increased from 78 percent to 89 percent. At the same time, the share that went to proprietorships decreased from 14 percent to 5 percent, while the proportion that went to partnerships declined from 8 percent to 6 percent. The increase in the corporate share of business revenues was a natural outgrowth of the increasing size and scale of American business. As the overall economy expanded, many entrepreneurs with growing businesses that started as proprietorships or partnerships decided to incorporate. For growing businesses, incorporation often involved the sale of stock to the public, which allowed these entrepreneurs to raise capital for the business and receive cash for some share of the business. Source
Notes HS series V 5, V 8, and V 11; and SA 1999, table 862.
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PBS Program | Trends of the Century | Viewer's Voices | Interactivity | Teacher's Guide |
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