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. government’s 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.

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 can’t 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 factory’s 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 country’s 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 wasn’t 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 wouldn’t 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 didn’t 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 you’ll 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, Yugoslavia’s 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. Khrushchev’s 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 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. 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 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.”


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 USDA’s 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 there’s 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 wasn’t 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 world’s 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 industry’s 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 — that’s 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 Americans’ health or animal welfare.

The rise in agricultural productivity tended to favor larger, more industrial farms. It didn’t 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 Timmer’s 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 it’s 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, we’ve 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.’”

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

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 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.

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About this PODCAST

Freakonomics Radio

Discover the hidden side of everything with Stephen J. Dubner, co-author of the Freakonomics books. Each week, Freakonomics Radio tells you things you always thought you knew (but didn’t) and things you never thought you wanted to know (but do) — from the economics of sleep to how to become great at just about anything. Dubner speaks with Nobel laureates and provocateurs, intellectuals and entrepreneurs.

Discover the hidden side of everything with Stephen J. Dubner, co-author of the Freakonomics books. Each week, Freakonomics Radio tells you things you always thought you knew (but didn’t) and things you never thought you wanted to know (but do) — from the economics of sleep to how to become great at just about anything. Dubner speaks with Nobel laureates and provocateurs, intellectuals and entrepreneurs.

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