How the Supermarket Helped

America Win the Cold War

Aisle upon aisle of fresh produce, cheap meat, and
sugary cereal — a delicious embodiment of free-
market capitalism, right? Not quite. The supermarket
was in fact the end point of the U.S. governmentʼs
battle for agricultural abundance against the USSR.
Our farm policies were built to dominate, not
necessarily to nourish — and we are still living with the
consequences.
Stephen J. Dubner/ Freakonomics Radio

People picking up treats at a self-serve delicatessen in Berg's Supermarket, circa 1950. Credit: Gifford
Photographic Collection via OSU Special Collections & Archives/flickr

The decades-long Cold War between the United States and the USSR
featured a space race, an arms race, and… a farms race. This farms race —
which involved substantial government policies to deliver high-volume and
standardized agriculture — was about more than just food; it was a battle
over which was the superior system, communism or capitalism.

The farms race had an obvious winner: American supermarkets were filled
with affordable food, while the USSR was ultimately forced to import grain
from the United States.

But the American victory was, to some degree, a Pyrrhic victory whose
aftereffects are still being felt. Today on Freakonomics Radio: how a
sprawling system of agriculture technology, economic policy, and political
will come to life in… the supermarket.
“A supermarket is not just a retail box, but actually the end point of an
industrial agriculture supply chain,” explains the historian Shane Hamilton,
author of Supermarket USA: Food and Power in the Cold War Farms Race.
“A supermarket canʼt exist without the inputs of mass-produced foods.”

The American supermarket — a one-stop shop that, unlike its predecessor

the dry-goods stores, sold pretty much everything — was born around
1930. Between 1946 and 1954 in the United States, the share of food
bought in supermarkets rose from 28% to 48%. By 1963, that number had
risen to nearly 70%.

Around the same time, perhaps the biggest changes to American

agriculture were mechanization and automation. Peter Timmer is a former
Harvard economist who studied agriculture and food policy. Before that,
Timmer was a farm boy in Ohio. He worked for the Tip Top Canning Factory,
which was founded by his great-grandfather, and the factoryʼs tomato farm.
When he was young, all the tomatoes on the farm were hand-picked and
hand-peeled.

“When I was in grade school or junior high school, if we could pack 40- or
50,000 cases of canned tomatoes and product in a year, that was a pretty
successful year,” Timmer says. “By the time I had graduated from graduate
school, the company was putting out a million cases a year.”

This was thanks, in large part, to a mechanical tomato harvester — which

came out of the engineering school at the University of California, Davis,
with the help of federal research money. It had taken years to get the
harvester right — mostly because they first had to get the tomato right,
breeding a new variety that could withstand the rough treatment of the
mechanical harvester. The transformation that Timmer witnessed at the Tip
Top Canning Factory is emblematic of the general trends in the countryʼs
food system at the time, and one example of the role the government
played in advancing agricultural productivity. The U.S. Department of
Agriculture, established in 1862, has had a long history of funding and
conducting scientific research — including on farm machinery, seed
development, livestock breeding, and even road construction and rural
electrification.

If U.S. agriculture policy was aggressive in earlier decades, then in the Cold
War era, it was pretty much on steroids. And this wasnʼt just about feeding a
growing U.S. population. The policy had a political thrust, meant to show
the Soviet Union — and the rest of the world — just how mighty the United
States was.

And one of the things that made America so great? Its agricultural system.
This agricultural bounty was a good candidate for the U.S. propaganda
machine.

“The farms race was about, how do you get the food from industrially
productive, technologically sophisticated farms, to, you know, this display of
abundance — and the display was really crucial,” says Hamilton.

The United States just needed somewhere to display this abundance. Since
the average citizen living under communism wouldnʼt have access to a
supermarket, the U.S. government brought the supermarket to the
communists. In 1957, the United States created a Supermarket U.S.A.
exhibit in then-communist Yugoslavia. The exhibit featured a fully functional
supermarket full of affordable frozen and packaged foods, and fresh
produce airlifted in from the United States.

For anyone who didnʼt get the message, there was also a sign touting “the
knowledge of science and technology available to this age.” In other words:
“If you like our breakfast cereal, just think how much youʼll like the rest of
our capitalism.”

The Supermarket U.S.A. exhibit proved tremendously popular. More than

one million Yugoslavs visited; some received free bags of American food.
Marshal Tito, Yugoslaviaʼs leader, purchased the entire exhibit and used it
as a model for a chain of socialist supermarkets.

But the Soviet Union could not figure out how to replicate the American
model. Soviet leader Nikita Khrushchev was ultimately forced to buy
imported grain — from the United States. Khrushchevʼs successor, Leonid
Brezhnev, continued the policy of importing food from the U.S. to cover
domestic shortfalls.

Peter Timmer was part of a World Bank team that visited the Soviet Union;
he saw for himself their agricultural system and supermarkets.

“[T]he shelves were empty,” Timmer says. “It just — it was just weird. We
stayed at a government hotel and there was hardly anything to eat. You talk
with the staff of the research agencies and places like that who would
struggle just to come up with basic foods.”

If the two countries had been normal trading partners, this wouldnʼt have
been a big deal. But they werenʼt normal trading partners. They were Cold
War adversaries, the global icons of capitalism and communism. And it was
becoming clear which system would prevail, at least on the food front. And,
according to Peter Timmer, on other fronts as well.

“It was a fundamentally failed strategy for agriculture that brought down the
Soviet Union, Timmer says. “They didnʼt grow enough, and they didnʼt grow
the right things. And there were no price signals telling you whatʼs
expensive and whatʼs cheap. They wasted a lot of what they were
producing on the land. It never got into the supermarkets.”

So the United States won the so-called “farms race,” with an industrial
approach to agriculture that was heavily influenced by government policy
and funding. But what was the ultimate cost of this supermarket victory?
What are the economic and political and health consequences of decades
of agriculture policy that encouraged industrialization, standardization, and
low prices?

Anne Effland, a senior economist in USDAʼs Office of the Chief Economist,

thinks you need to go back about 100 years, to before the Cold War, to
answer that question. Effland thinks thereʼs one key event that really drove
U.S. food policy: increases in agricultural production during World War I.

“Farmers expanded their production to meet wartime goals, and there were
some price supports during that time that provided incentives for increases,
especially wheat and pork and some of these other staple commodities,”
Effland says. “But there was no real planning for the aftermath, after the
increased demand and the price supports that are set up for war go away,
and it left a number of farmers who had, in good faith, developed larger
farms and more productive farms, with very low prices.”

So after the war, farmers were producing more food than was necessary.
Then came the Great Depression. Demand for food collapsed, but
agricultural productivity stayed the same. So the government started
implementing policies to support American farmers. These policies would
take many forms over the ensuing decades, from crop insurance to loans
and direct payments, and many more. One key policy tool the government
used was a price-support system: guaranteeing farmers a certain minimum
price for a specific crop at a specific time. The government set these prices
at a level required to give farmers the same purchasing power they had
before the war.

But if you increase the price being paid for something without limiting the
amount being produced, you get surpluses — large surpluses. So the
federal government started buying and storing excess produce. In the early
1930s, when the U.S. government guaranteed farmers 80 cents per bushel
of wheat, the government wound up buying, and storing, more than 250
million bushels.
With price guarantees for certain crops, and the resultant glut of supply, the
government sometimes paid farmers to plant fewer crops. But even this
wasnʼt fully successful. One solution was to use surplus grain for animal
feed. This, however, had another unintended consequence: it enabled the
rise of industrial meat production.

Industrial meat production, fueled by cheap grain, meant cheap meat, too,
and helps explain how the United States became one of the worldʼs biggest
consumers of meat, per capita. Today, more than 30% of corn and more
than 50% of soybeans grown in the United States goes toward feeding
cattle and other livestock. But even that left a lot of surplus production.

So, what happened next? High-fructose corn syrup. In what Peter Timmer
describes as a “perfect storm,” surplus corn was used to fill the food
industryʼs demand for convenient sweeteners.

“If I had only one thing to say about the impact of our agricultural programs
on what you see in the supermarket and subsequent health issues out of
the diet, I would have said the fact that we use so much high-fructose corn
syrup is — thatʼs the example of how things can go badly wrong, even if
well intended,” Timmer says.

Today, the United States has clearly won the abundance war. But the costs
have been high, and they extend beyond the damage done to Americansʼ
health or animal welfare.

The rise in agricultural productivity tended to favor larger, more industrial

farms. It didnʼt hurt that such farms often received the government price
supports designed for smaller family farms. When the mechanical harvester
was introduced — the machine that revolutionized Peter Timmerʼs family
farm and canning factory — there were around 5,000 tomato growers in the
United States. Within five years: 4,400 had gone out of business. Between
1940 and 1969, 3.4 million American farmers and their families stopped
farming.

“Quite a few historians suggest that this all-out push to productivity killed
the family farm, effectively,” says Shane Hamilton. “And itʼs hard to deny
that.”

The all-put push for productivity has had a negative impact on the
environment as well.

“If we had worried much, much more about the quality of farm land, of
sustainability, about environmental side effects from heavy fertilization on
corn — you know, weʼve got a dead zone in the Gulf of Mexico that is
directly attributable to putting fertilizer on corn up in the Midwest,” Timmer
says. “I accused my brothers of poisoning the Gulf of Mexico, and they said,
‘Well what are we going to do? We have to get high yields.ʼ”

Peter Timmer has seen a lot of change in the farming business over his
lifetime. Heʼs hopeful that the political will to make the agricultural industry
shift to more organic and natural processes will soon emerge.

Maybe heʼll see the change heʼs hoping for now. But itʼs going to be hard to
break the status quo, at least in terms of how financial incentives drive food
production. For instance: when the Trump administration placed billions of
dollars of tariffs on Chinese imports, China responded with their own tariffs
on imported American crops like soybeans, alfalfa, and hay. American crop
exports to China fell dramatically — as did, of course, farmersʼ revenues.

Just last week, the United States Government announced it had put
together a welfare package for U.S. farmers. The price tag? $16 billion.

You can find the full Freakonomics Radio episode “How the Supermarket
Helped America Win the Cold War” at Freakonomics.com. You can also
listen on Stitcher, Apple Podcasts, or any other podcast platform.
Stephen J. Dubner is co-author of the Freakonomics books and host of
Freakonomics Radio.

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