Peter Timmer
Appearances
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
The fact is, they were unable to modernize Soviet agriculture with the economic structure and strategy that they were following.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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. You 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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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. Timur was actually in Moscow when the Soviet Union collapsed.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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... 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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
I mean, demand collapsed dramatically. But agricultural productivity did not. And what that meant was prices just collapsed. And so that so totally set the mind frame for U.S. agricultural policy.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
You know, economists who don't do U.S. agricultural policy are usually horrified. 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 mess. Just an awful mess.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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 can go badly wrong even if well intended. I mean, don't get me started on ethanol because that's the next step.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
in reducing the surpluses, but I don't want to go there.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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? 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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
And it was pretty much invented. by Walmart.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
So the U.S. experience is formative. And it's formative for two reasons. One, U.S. universities train so many ag economists, food scientists, food policy people to go back to other countries that the U.S. 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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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 aspect. and quality dimensions going forward.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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 they said, well, what are we going to do?
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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 old paradigm rather than a more sustainable, environmentally friendly, let's make agriculture do more on organic and natural processes.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
That doesn't seem to be the political driver right now, but it has to come back. We have to make agriculture green, which is a strange thing to say.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
When I was a Fulbright scholar and had to explain myself to the cohort when we got to London, I said, well, my background is tomatoes. And everybody just laughed. I hadn't realized that it was not such a normal background.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
If I may say so, I lived through the structural transformation of the agricultural economy.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
I'm a retired professor, have worked on agriculture and food policy, poverty reduction, economic development for well over 50 years now.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
I'm old enough to remember when we hand-picked all of our tomatoes and we hand-peeled all of our tomatoes. But that, of course, changed. 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.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
By the time I had graduated from graduate school, the company was putting out a million cases a year.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
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 U.S. food system at the time.
Freakonomics Radio
How the Supermarket Helped America Win the Cold War (Update)
Economists who don't do U.S. agricultural policy are horrified by what they see in terms of distorting markets.