386. 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 endpoint of the U. S. government’s battle for agricultural abundance against the U. S. S. R. Our farm policies were built to dominate, not necessarily to nourish — and we are still living with the consequences.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Stephen J. Dubner?

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• 1:25Stephen J. Dubner?

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• 2:06Stephen J. Dubner?

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• 2:20Stephen J. Dubner?

  Hey there, podcast listeners. Before today's episode, let me ask you this. We are working on an episode about the opioid crisis and potential solutions. One idea we've heard about is a buyback program for prescription opioids, where you'd get cash or a cash equivalent for turning in the pills you haven't used. So, we are curious to know what you have in your medicine cabinet, especially if they're opioids that you're no longer taking. We're also curious to know what it would take to get you to drop off the unused pills at your local pharmacy. If you have a story to tell us, please make a brief audio recording. Just use whatever voice memo app is on your phone and email the file to [email protected] with the subject line "Medicine." Tell us your name, what you do, where you're from.

• 3:03Stephen J. Dubner?

  Given the topic at hand, if you prefer to just use your initials instead of your name, that's fine, too. And you can also anonymize your other details. Thanks.

• 3:18Stephen J. Dubner?

  When you think about propaganda campaigns, I am guessing you don't think of this.

• 3:34Stephen J. Dubner?

  After World War I and World War II came the Cold War between the US and the USSR. It featured a space race, an arms race, and a farms race.

• 3:46Speaker 01

  Things like chicken breeding and hybrid corn took an outsized and somewhat surprising role in US propaganda in the early 1950s.

• 3:55Stephen J. Dubner?

  The farms race had an obvious winner.

• 3:57Speaker 02

  We clearly won the abundance war.

• 4:00Stephen J. Dubner?

  But the American victory was, to some degree, a Pyrrhic victory, whose after-effects are still being felt.

• 4:07Speaker 02

  Economists who don't do US agricultural policy are horrified by what they see in terms of distorting markets.

• 4:19Stephen J. Dubner?

  Today on Freakonomics Radio, how a sprawling system of agriculture technology, economic policy, and political will came to life in the supermarket.

• 4:30Speaker 03

  Tell me, who could possibly afford to buy food in a place such as this?

• 4:33Speaker 04

  Well, this is just an ordinary food market. Competition and big volume keep prices down.

• 4:39Speaker 03

  Utterly impossible.

• 4:51Speaker 05

  From Stitcher and Dubner Productions, this is Freakonomics Radio, the podcast that explores the hidden side of everything. Here's your host, Stephen Dubner.

• 5:10Stephen J. Dubner?

  The supermarket is so ubiquitous today that it's hard to imagine the world without it. But of course, such a time did exist.

• 5:16Speaker 06

  There's some debate about when supermarkets actually started, but usually we pin it at around 1930.

• 5:21Stephen J. Dubner?

  That's Shane Hamilton. He's an American historian who teaches at the University of York in England.

• 5:27Speaker 06

  I'm the author of Supermarket USA: Food and Power in the Cold War Farms Race.

• 5:32Stephen J. Dubner?

  Was the supermarket a purely American invention?

• 5:36Speaker 06

  I argue yes. The easy answer is that the first declared supermarket was built in the United States. I think the broader answer is that what makes a supermarket a supermarket is the industrial agriculture system that enables the affordability of mass-produced foods.

• 5:57Stephen J. Dubner?

  The predecessor of the supermarket was the dry goods store.

• 6:02Speaker 06

  So they didn't have fresh produce. They didn't necessarily have milk or meat or a bakery in-house. That's what a supermarket did, is it put all those food items, and often many other things. You could get auto parts. You could get your shoes shined in the early supermarkets. It was a kind of one-stop shopping and service emporium.

• 6:21Stephen J. Dubner?

  Another big difference: supermarkets were self-serve. In a dry goods shop, you'd ask a clerk for something, and they'd fetch it. In a supermarket, you could ogle the meat and produce yourself, even handle it, and then put it in your basket. The supermarket chain Piggly Wiggly is credited with having pioneered the self-service retail model. It is still operating today in 17 states. But the biggest supermarket chain for much of the 20th century was A&P, the Great Atlantic and Pacific Tea Company.

• 6:52Speaker 06

  A&P, as of the 1940s, was the world's largest retailer by any measure, by sales volume, by number of outlets, and so forth.

• 7:02Stephen J. Dubner?

  Between 1946 and 1954 in the US, the share of food bought in supermarkets rose from 28% to 48%. By 1963, that number had risen to nearly 70%. A&P had so much market power that the Department of Justice went after it for anti-competitive practices. This was an interesting development, considering that the US government played such a significant role in the creation of supermarkets in the first place.

• 7:33Speaker 06

  The original goal had been to use the supermarkets to drive down the cost of food for urban consumers.

• 7:40Speaker 07

  The US becomes a majority urban nation by, I think, 1920. And there's a lot of anxiety among leaders, political leaders, thought leaders, about whether or not US agriculture is going to be productive enough to feed this growing urban population.

• 7:57Stephen J. Dubner?

  That's Anne Efland.

• 7:59Speaker 07

  I'm a senior economist in USDA's Office of Chief Economist, and I work primarily on domestic policy.

• 8:05Stephen J. Dubner?

  The US Department of Agriculture, established in 1862, had a long history of funding and conducting scientific research.

• 8:13Speaker 07

  You know, a lot of the seed development and livestock breeding. One good example would be the research done in the 1890s on animal disease, on bovine tuberculosis, for example, to identify the causes of those diseases and then to develop ways to treat that. There was also research on developing new kinds of machinery that would, you know, be less heavy on the ground or less damaging to crops.

• 8:40Stephen J. Dubner?

  The USDA's promotion of agriculture went even further than farm machinery and animal breeding.

• 8:46Speaker 07

  There was a need for better transportation from the farms to the cities. So USDA had a unit that did engineering research on the best road materials and road construction methods. The Rural Electrification Administration was part of the New Deal USDA. The private electrical companies didn't see a profit in expanding out into rural areas, and so that was taken on by USDA.

• 9:13Stephen J. Dubner?

  But perhaps the biggest changes to American agriculture were mechanization and automation.

• 9:19Speaker 02

  If I may say so, I lived through the structural transformation of the agricultural economy.

• 9:26Stephen J. Dubner?

  That's Peter Timmer, an economist who used to teach at Harvard.

• 9:29Speaker 02

  I'm a retired professor, have worked on agriculture and food policy, poverty reduction, economic development for well over 50 years now.

• 9:41Stephen J. Dubner?

  And 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 factory's tomato farm.

• 9:51Speaker 02

  I'm old enough to remember when we handpicked all of our tomatoes and we hand-peeled all of our tomatoes.

• 9:59Stephen J. Dubner?

  But that, of course, changed.

• 10:01Speaker 02

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

• 10:23Stephen J. Dubner?

  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.

• 10:44Speaker 02

  I remember when we bought our first one, it was a huge expense, and it just revolutionized our operation. I was just in a microcosm of what turned out to be very general trends in the entire US food system at the time.

• 11:04Stephen J. Dubner?

  The general trends could best be characterized as high-volume and standardized agriculture. If you would describe US agriculture policy as aggressive in earlier decades, then in the Cold War era, it was pretty much on steroids. And this wasn't just about feeding a growing US population. This had a political thrust, meant to show the Soviet Union and the rest of the world just how mighty the US was. Shane Hamilton again.

• 11:34Speaker 06

  I don't mean to deny the power and the might of these weapon systems that were deployed in the space race and all that. But fundamentally, this was a contest to demonstrate that either communism or capitalism was a superior political economic system.

• 11:50Speaker 01

  After Sputnik, when the United States was trying to understand why it was falling behind in the space race, or why it thought it was falling behind in the space race, many of the commentators said, "The problem is we're not funding basic research." So after 1957, the budgets of not only organizations like the National Science Foundation, but also specific government departments like the Department of Agriculture, their budgets for research increased dramatically on the theory that this is how the United States would win the Cold War by doing the best science.

• 12:23Stephen J. Dubner?

  That is Audra Wolf.

• 12:25Speaker 01

  I'm a writer, editor, and historian.

• 12:27Stephen J. Dubner?

  Wolf's latest book is called Freedom's Laboratory: The Cold War Struggle for the Soul of Science.

• 12:33Speaker 01

  And it really looks at the ways that science as an idea became a tool for propaganda in the Cold War, especially on the American side. There's this idea that you can change hearts and minds, and you can establish a climate of opinion that makes people more willing to accept the American way of life as the better choice.

• 12:53Stephen J. Dubner?

  And one of the things that made America so great? Its agricultural system.

• 12:58Speaker 01

  Things like chicken breeding and hybrid corn took a outsized and somewhat surprising role in US propaganda in the early 1950s.

• 13:07Stephen J. Dubner?

  But there was a tension.

• 13:08Speaker 01

  The United States wanted to promote personal exchanges, scientific and technical exchanges, as a way to promote American values. But at the same time, it was very, very nervous that by doing so, it would lose the advantages that it had, particularly in grain production.

• 13:23Stephen J. Dubner?

  In 1955, the US government unexpectedly had its hand forced.

• 13:28Speaker 01

  A newspaper editor in Iowa named Lauren Soth invited Khrushchev to the United States to see the wonders of American agriculture.

• 13:36Stephen J. Dubner?

  That's Nikita Khrushchev, then leader of the Soviet Union.

• 13:40Speaker 01

  And somewhat to everyone's shock, Khrushchev said yes. Now, Khrushchev didn't come himself until 1959. But in 1955, a group of 12 Soviet agricultural experts came to the United States to see the wonders of American agriculture. They saw how contour farming worked. They saw the wonders of hybrid corn. They saw the chicken breeders.

• 14:01Speaker 06

  Chicken in the 1920s was pound for pound as expensive as lobster. By the 1960s, it was so cheap that it was quickly becoming America's most popular meat.

• 14:12Stephen J. Dubner?

  What can you tell us about the Chicken of Tomorrow Project?

• 14:15Speaker 06

  The Chicken of Tomorrow.

• 14:18Speaker 06

  Really, the Chicken of Tomorrow is the chicken of today in that we're all eating the kind of genetic progeny of the original Chicken of Tomorrow. What it was, was a contest to produce the most efficient chicken, using genetic techniques, basically. And it not only had to be an efficient chicken, but very heavy breasts, very light colored feathers, so that when it's plucked, it would look good under cellophane and then later plastic packaging. And the birds had to be relatively disease resistant so that they could be put in intensive rearing operations without dying too quickly.

• 14:58Stephen J. Dubner?

  This agricultural bounty, those heavy-breasted cheap chickens, those millions of cases of tomatoes, all this was a good candidate for the US propaganda machine.

• 15:10Speaker 06

  The US information agency were searching for concrete forms of propaganda to display America's wealth.

• 15:18Stephen J. Dubner?

  Enter one of the most concrete forms of display imaginable: the supermarket.

• 15:23Speaker 06

  A supermarket is not just a retail box, but actually the endpoint of an industrial agriculture supply chain. A supermarket can't exist without the inputs of mass-produced foods. The farms race was about how do you get the food from industrially productive, technologically sophisticated farms to, you know, this this display of abundance, and the display was really crucial.

• 15:48Stephen J. Dubner?

  Since the average citizen living under communism wouldn't have access to a Piggly Wiggly or an A and P, the US government brought the supermarket to the communists.

• 15:59Speaker 06

  The 1957 Supermarket USA exhibit in Zagreb, Yugoslavia, which was then a communist country, was a fully operational 10,000-square-foot American supermarket filled with frozen foods and breakfast cereals and everything else. They airlifted in fresh produce from the US because they didn't think Yugoslavian produce was attractive enough. It was about this display of affordable abundance available to American consumers.

• 16:24Stephen J. Dubner?

  For anyone who didn't get the message, there was also a sign touting, quote, "the knowledge of science and technology available to this age." In other words, if you like our breakfast cereal, just think how much you like the rest of our capitalism.

• 16:38Speaker 06

  There were quite a few people who thought that if you showed that American consumers could access affordable food, you know, strawberries in December without having to wait in line, that that that might actually cause the whole communist system to collapse.

• 16:52Stephen J. Dubner?

  The Supermarket USA exhibit proved tremendously popular. More than 1 million Yugoslavs visited. Some received free bags of American food.

• 17:02Speaker 06

  Immediately after seeing it, Marshall Tito, the leader of the country at the time, ordered the whole thing to be purchased, and it was bought wholesale from the United States exhibitors and used as a model. They hired a consultant from an Atlanta supermarket firm to come over and teach them how to build their own chain of socialist supermarkets.

• 17:22Stephen J. Dubner?

  So Yugoslavia, along with other European countries, started building American-style supermarkets, which created new buyers for processed and frozen foods from America. This did not, however, lead to a wider embrace of American culture, much less the downfall of communism. But just a couple of years later, the Americans took another shot, this time in Moscow, at the American National Exhibition. They built a split-level ranch-style American house. Its kitchen stocked with food and the latest labor-saving appliances. The message was clear. The American economy, based in free-market capitalism, was capable of producing things

• 18:04Stephen J. Dubner?

  that the Soviets' command-and-control economy simply couldn't. The exhibition opening was attended by Nikita Khrushchev and then-US Vice President Richard Nixon. They engaged in what came to be known as the Kitchen Debate.

• 18:18Speaker 08

  You must not be afraid of ideas.

• 18:23Speaker 09

  That's what we're telling you. Don't be afraid of ideas. We have nothing to fear. The time has passed when ideas scared us. Well, then, let's have more exchange of it.

• 18:33Speaker 06

  Richard Nixon and Nikita Khrushchev are two of the most explicit users of this Cold War farms-race language. Khrushchev declared that by outproducing the US in per capita meat-and-milk production, that would be the Soviet equivalent of hitting American capitalism with a torpedo. Nixon retorted that if there was going to be a torpedo fired, it was going to be by America's farmers and ranchers, to which the farmers and ranchers listening to his speech applauded very mightily.

• 19:03Stephen J. Dubner?

  A few months afterward, Khrushchev finally visited the US and he got to see for himself the sprawling cornfields of Iowa. But this was of little help to the Soviet farmers back home.

• 19:14Speaker 02

  The fact is, they were unable to modernize Soviet agriculture with the economic structure and strategy that they were following.

• 19:26Stephen J. Dubner?

  The economist Peter Timmer again.

• 19:28Speaker 02

  It was not a technological problem. It was a management and marketing problem. There was a total divorce between what consumers wanted and what the managers of the big state farms were told to produce.

• 19:43Stephen J. Dubner?

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

• 19:51Speaker 02

  Oh, gosh. I mean, the shelves were empty. It was just weird. We stayed at a government hotel and there was hardly anything to eat. To talk with the staff of the research agencies and places like that, who would struggle just to come up with basic foods, they knew it could be better than that.

• 20:11Stephen J. Dubner?

  Khrushchev, despite his bravado, was ultimately forced to buy imported grain from the US.

• 20:18Speaker 06

  Some historians would argue that this was one of the crucial factors that led to his downfall, that it was just embarrassing on the world stage for the Soviet Union, you know, this vast country with enormous agricultural resources, having to turn to its arch enemy for grain.

• 20:35Stephen J. Dubner?

  Khrushchev's successor, Leonid Brezhnev, continued the policy of importing food from the US to cover domestic shortfalls. If the two countries had been normal trading partners, this wouldn't have been a big deal. But they weren't 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. Peter Timmer's final analysis?

• 21:03Speaker 02

  It was a fundamentally failed strategy for agriculture that brought down the Soviet Union. They didn't grow enough and they didn't grow the right things. And there were no price signals telling you what's expensive and what's cheap. They wasted a lot of what they were producing on the land. It never got into the supermarkets.

• 21:23Stephen J. Dubner?

  Timmer was actually in Moscow when the Soviet Union collapsed.

• 21:27Speaker 02

  The neat thing is I have a passport going in stamped Soviet Union, but my passport coming out, the exit stamp, is Russia. People were so...

• 21:39Speaker 02

  Optimistic about what was going to happen. They knew that American supermarkets were a miracle. They had seen it on television. That point had clearly gotten through, at least to everybody that I talked to.

• 21:56Stephen J. Dubner?

  And so it seems as though the mighty supermarket may indeed have played a role in America's Cold War victory.

• 22:03Speaker 06

  Yeah, I mean, this is it's central to the the kind of lie, really, of the supermarket as a weapon.

• 22:10Stephen J. Dubner?

  The historian Shane Hamilton again.

• 22:12Speaker 06

  So when the supermarket is upheld as this, you know, effectively missile, this concrete consumer weapon against the claims of communism, it's built on this idea that supermarkets are producing this affordability just through the workings of supply and demand, that, you know, it's unfettered markets that are somehow making food so affordable for American consumers. Where the reality is, for everything from milk to beef to grain to processed foods of all kinds, there's massive government investment in the science and technology that enables the productivity of American farms, from fertilizers to frozen food processes to distribution and so forth.

• 22:57Speaker 06

  And that's all erased. The image is that it's just the supermarket itself that is the source of abundance.

• 23:03Stephen J. Dubner?

  So when you describe it like that, it's certainly, I mean, you use the word lie and you and you you talk about the hidden components and you make it certainly sound nefarious. But couldn't you argue that, you know, the role of a government is to invest in science and technology that'll benefit private industry and ultimately the citizenry?

• 23:23Speaker 06

  Yeah, I actually don't have a problem with the US government investment in science and technology and encouraging, you know, more productivity. The concern is with, you know, that being disguised as a free market when it's not particularly free. I mean, taking that to a propaganda level and attacking another country for not having free markets, it's just duplicitous, right?

• 23:48Stephen J. Dubner?

  You may or may not be as disturbed as Shane Hamilton is by what he calls the duplicity of the US government for promoting the supermarket as an emblem of free market capitalism. To me, the big question is this: What was the ultimate cost of this supermarket victory? What are the economic and political and health consequences of more than 100 years of agriculture policy that encouraged industrialization, standardization, and low prices? That's coming up right after this. Freakonomics Radio is sponsored by Southern New Hampshire University. There's no hiding how convenient Southern New Hampshire University makes college. They offer over 80 career-focused

• 24:33Stephen J. Dubner?

  graduate programs online. Classes have no set meeting times, so you can balance life and learning, and online tuition rates are some of the lowest in the country, making it all a little more manageable. A school this willing to work with you is worth the investment. Visit SNHU.edu/freakonomics to learn more. Freakonomics Radio is sponsored by PNC Bank. Boring. Great word, bad rep. Yet, time and time again, here at Freakonomics, we find that when something culture-changing happens, boring things like calculations and careful planning are usually behind it. Which begs the question, why not apply it to other aspects of life, like banking, for example? Well,

• 25:17Stephen J. Dubner?

  PNC Bank did since its inception, proving time and again that the best banking strategy isn't the exciting type, but the steady, reliable, definitely-not-YOLO type. PNC Bank: brilliantly boring since 1865. Brilliantly boring since 1865 is a registered mark of the PNC Financial Services Group, Inc. PNC Bank, National Association, Member FDIC. Freakonomics Radio is sponsored by Hotels.com. Hotels.com helps you find and book the right stay for work faster. With business preferences, save your travel must haves, like gym access or breakfast, just once, then get tailored results whenever you search for work travel.

• 26:00Stephen J. Dubner?

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• 26:23Stephen J. Dubner?

  So the US won the so-called farms race with an industrial approach to agriculture that was heavily influenced by government policy and funding. What were the long-term results of that victory? To figure that out, we need to go back about 100 years. That's on the advice of Anne Efland, the US Department of Agriculture economist we've been hearing from. Efland thinks there's one key event that really drove US food policy.

• 26:51Speaker 07

  And that is production increases around World War I. Farmers expanded their production to meet wartime goals. And there were some price supports during that time that provided incentives for increase, especially wheat and pork and some of these other staple commodities. 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.

• 27:23Stephen J. Dubner?

  So after the war, farmers were producing more food than was necessary. Then came the Great Depression. The economist Peter Timmer.

• 27:31Speaker 02

  I mean, demand collapsed, but agricultural productivity did not. And what that meant was prices just collapsed. And so that so totally set the mind frame for US agricultural policy.

• 27:51Speaker 07

  That's when we see the beginning of real price policies for agriculture.

• 27:56Stephen J. Dubner?

  Price policies for agriculture would take many forms over the ensuing decades, from crop insurance to loans and direct payments and many more. Now, you can understand why the government would want to make agriculture financially viable and remove some of the uncertainty. A national food supply is a pretty important thing. 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.

• 28:26Speaker 07

  There was an idea of something called parity, which was that the price should be such that it would give farmers the same purchasing power in comparison to workers and others in the economy that they had had before World War I, and that was the guideline for what those price support levels ought to be.

• 28:44Stephen J. Dubner?

  But if you increase the price being paid without limiting the amount being produced, well.

• 28:50Speaker 07

  One of the problems with this is that it leads to a large surplus.

• 28:56Stephen J. Dubner?

  This would leave the federal government to buy and store excess produce. In the early 1930s, when the US government guaranteed farmers 80 cents per bushel of wheat, the government wound up buying and storing more than 250 million bushels.

• 29:11Speaker 07

  These things all take place in the context of their own times. Having policies that found a way to increase farm incomes in the 1930s, I think, would be seen as a good thing, but there are also consequences of that over time as they get embedded.

• 29:28Stephen J. Dubner?

  If you ever wonder why the USDA's old food pyramid, the diagram of recommended servings of different foods, why the biggest category at the bottom of the pyramid was bread, cereal, rice, and pasta, well, the US had an awful lot of all those foods. And if you ate as the USDA instructed, there is a good chance you put on a few pounds. You can't think about nutrition without thinking about agriculture policy. And US agriculture came to be driven by financial incentives, incentives that, given how government funding often works, weren't always entirely sensible.

• 30:08Speaker 02

  You know, economists who don't do US agricultural policy are usually horrified.

• 30:18Speaker 02

  By what they see in terms of distorting markets, picking, okay, corn, soybeans, wheat, you guys get big subsidies, apples, grapes, fresh fruits and vegetables, you're on your own. Dairy incredibly regulated, both federally and at the state level, just a, you know, just a mess, just an awful mess.

• 30:42Stephen J. Dubner?

  With price guarantees for certain crops and the resultant glut of supply, the government sometimes paid farmers to plant fewer crops. But even this wasn't fully successful.

• 30:54Speaker 07

  So we have controls on how much can you plant on an acre, but not on how much your yield is on the acres you are planting. There's a huge boom, lots of new chemicals, fertilizers, machinery that make farms more productive. So even though we're trying to control by reducing the acreage, there continues to be increasing production and surpluses don't go down.

• 31:18Stephen J. Dubner?

  But Anne Eflin says this was a problem the USDA wasn't all that unhappy about.

• 31:24Speaker 07

  Problem solving on the scientific and technical and engineering side tends to run on its own track and be seen as a positive outcome. I don't think there's ever a point at which the policy side is saying, oh, stop providing good science and better agricultural practices so we don't have these surpluses. Because when you do that, what you're saying is then stop this economic development. Solving problems and making farming more efficient are still seen as good projects to continue. The fact that they also create these surpluses is sort of a different track of problems that the farm policy then is trying to figure out solutions to.

• 32:07Stephen J. Dubner?

  One solution was to use surplus grain for animal feed. Shane Hamilton again.

• 32:14Speaker 06

  Those massive surpluses of cheap corn and later soybeans encourages the rise of, you know, industrial meat production, concentrated animal production, livestock feeding operations, where, you know, that's, that's enabled by cheap grain production.

• 32:30Stephen J. Dubner?

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

• 32:56Speaker 02

  High fructose corn syrup. Yep, you've got surplus corn and you've got a demand for easy, convenient sweetener in the food sector. And that was just a perfect storm. That syrup revolutionizes food processing because instead of a powdery sweet thing, it's a liquid, and liquids are way easier to handle in food processing. 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, that's the example of how things

• 33:39Speaker 02

  can go badly wrong, even if well-intended. I mean, don't get me started on ethanol, because that's the next step in reducing the surpluses, but I don't want to go there.

• 33:54Stephen J. Dubner?

  The rise in agricultural productivity tended to favor larger, more industrial farms. It didn't hurt that they often received the government price supports designed for smaller family farms. As you can imagine, this began to put a lot of small farms out of business.

• 34:11Speaker 02

  We didn't manage that process very well, but I think just basic economic forces would have pushed us in that direction. It just wouldn't have pushed us as far.

• 34:24Stephen J. Dubner?

  Peter Timmer, you will recall, grew up working on the tomato farm and canary founded by his great-grandfather. You'll also recall when the Tip Top Canning Company got their first mechanical tomato harvester.

• 34:36Speaker 02

  It just revolutionized our operation.

• 34:39Stephen J. Dubner?

  When the mechanical harvester was introduced, there were around 5,000 tomato growers in the US. Within five years, 4,400 had gone out of business. The Timmer family farm and canning factory made the cut. They're still operating today. But between 1940 and 1969, 3.4 million American farmers and their families stopped farming.

• 35:04Speaker 06

  Quite a few historians suggest that this all-out push to productivity killed the family farm, effectively.

• 35:12Stephen J. Dubner?

  Shane Hamilton again.

• 35:14Speaker 06

  And it's hard to deny that. On the other hand, we don't apply the same kind of metrics to industrial manufacturing, where similarly, there's been massive US government investment in science and technology to support economic growth and productivity. I'm sympathetic to those who see it as overall a net positive gain. However, the pain is real.

• 35:39Stephen J. Dubner?

  Peter Timmer says this massive consolidation on the production side was driven by what was happening on the consumption side, the growth of supermarket chains.

• 35:50Speaker 02

  Supermarkets were able to manage the supply chains all the way back to farmers, but they didn't want little tiny farmers. Just one supplier, please. It's just way too complicated to contract with 50 or 100. That has changed then the nature of production, right down at the level of Tip Top Canning Company, and how we would be able to provide the kind of regular quality and supply and low price that a Walmart, or a Kroger, or a Publix would need.

• 36:24Speaker 06

  I mean, Walmart really came in and looked at the landscape of American supermarkets and saw inefficiencies everywhere. What Walmart did was build on its successful model of general merchandise sales with hyper-efficient logistics and distribution, brought that into the supermarket industry and really shook things up.

• 36:45Speaker 02

  I used to ask my class, I'm talking 1985, "Where is the world's largest supercomputer?" And the correct answer was, "It's at the Pentagon." Okay, where is the world's second-largest supercomputer?

• 37:00Speaker 02

  Bentonville, Arkansas, home of Walmart. They used that computer to track every single item on every single Walmart shelf. That information technology is what revolutionized food marketing. And it was pretty much invented by Walmart.

• 37:24Stephen J. Dubner?

  This technology would spread across the world, affecting not just the demand side, supermarkets, but the agriculture supply side.

• 37:32Speaker 02

  So, the US experience is formative. And it's formative for two reasons. One, US universities train so many ag economists, food scientists, food policy people to go back to other countries, that the US model is pretty well ingrained intellectually. But the other thing, of course, is the biological and mechanical technologies mostly came out of the United States.

• 38:06Stephen J. Dubner?

  Another consequence of the scaling up of American agriculture? More standardization and less variety.

• 38:13Speaker 06

  So Apples, in the early 20th century, consumers in, say, New York State would have access to literally hundreds of varieties. You know, even in mass retail markets, by the mid 20th century, it's down to just a handful, and, you know, Red Delicious really dominates the whole market. And Apples became remarkably tasteless by the mid 20th century. You know, so certain qualities were given up in order to gain that advantage of price and abundance.

• 38:42Speaker 02

  Well, you know, we clearly won the food wars in terms of supply and abundance. We won the abundance war. What we may be in the process of losing is the health and quality dimensions going forward.

• 39:05Speaker 06

  I think today, we're certainly witnessing, perhaps especially among millennials, an attempt to kind of reconfigure values. You know, what are you actually looking for when you go to a supermarket? And it's not just price. Price does not contain all relevant information for many shoppers in a contemporary supermarket. So the costs of pollution, of degraded animal welfare, that are currently not being borne by either producers or consumers of food, would have to be borne.

• 39:38Speaker 02

  If we had worried much, much more about the quality of farmland, of sustainability, about environmental side effects from heavy fertilization on corn. You know, we've got a dead zone in the Gulf of Mexico that is directly attributable to putting fertilizer on corn up in the Midwest. I accused my brothers of poisoning the Gulf of Mexico. And I said, well, what are we going to do? We have to get high yields. There was this sense of everybody being trapped in an old paradigm. And now, how do we break out of that? I hate to say it, but the current government seems to be trying to take us back to the

• 40:19Speaker 02

  old paradigm, rather than a more sustainable, environmentally friendly, let's make agriculture do more on organic and natural processes. That doesn't seem to be the political driver right now, but it has to come back. We really, we have to make agriculture green, which is a strange, strange thing to say.

• 40:47Stephen J. Dubner?

  Peter Timmer has seen a lot of change in the farming business over his lifetime. And who knows, maybe he'll see the change he's hoping for now. But it's 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, farmers' revenues. Just last week, the US government announced they had put together a welfare package to US farmers.

• 41:31Stephen J. Dubner?

  The price tag? $16 billion. Coming up next time on Freakonomics Radio. How much does your name matter?

• 41:44Speaker 06

  Guys, I think ultimately, all a name really does is it's a vehicle for the parents to signal what kind of person they are.

• 41:52Stephen J. Dubner?

  Is that really all a name does? This ad popped up that said Latony Sweeney arrested, and I basically almost fell out of the chair because I'd never been arrested. A classic episode from our archive to be followed the week after by a whole new chapter in the name saga with lessons from this person. Dr. Marijuana Pepsi Bendike. How much does your name matter? That's next time on Freakonomics Radio. Freakonomics Radio is produced by Stitcher and Dubner Productions. This episode was produced by Matt Hickey. Our staff also includes Alison Kreglo, Greg Rippon, Harry Huggins, Zach Lepinski, and Corinne Wallace. Our intern is Daphne Chen. We had help this week from Nellie Osborne. Our theme song is "Mr.

• 42:37Stephen J. Dubner?

  Fortune" by The Hitchhikers. All the other music was composed by Luis Guerra. You can subscribe to Freakonomics Radio on any podcast app, including Spotify or the Apple or Google Podcast apps. If you want to get the entire Freakonomics Radio archive, that is available exclusively on the Stitcher app or at Freakonomics.com, where you can also find transcripts, show notes, and sign up for our newsletter. If you want our entire archive without ads, along with bonus episodes, go to stitcherpremium.com/freakonomics. We also publish every week on Medium a short text version of our new episode. Go to medium.com/freakonomicsradio. We can also be found on Twitter and Facebook and LinkedIn, or via email at [email protected].

• 43:21Stephen J. Dubner?

  Freakonomics Radio also plays on many NPR stations, so please check your local station for details. Thank you for listening.

• 43:34Speaker 05

  Stitcher.

• 43:40Stephen J. Dubner?

  Freakonomics Radio is sponsored by EverPure. Is the value of AI not living up to the promise? The problem is probably your data, not your AI models. When it's scattered across different systems, getting your data AI-ready is a challenge. You keep your AI waiting, and everything slows down. EverPure unifies your data, so you can see it, understand it, and control it all from one simple place, and get it AI-ready fast. Unlock the true value of your AI at everpuredata.com.

• 44:12Stephen J. Dubner?

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• 44:43Stephen J. Dubner?

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• 45:20Speaker 10

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