Economy

How American idea of Supermarkets transformed the whole world?

What is good can have dire consequences too!

I learned from this engaging podcast from Freakonomics (if you haven’t read the fantastic book, stop and immediately get it) on how the food policies of the USA in the early and mid-20th century, planned with good intentions and valid reasons led to industrialized crop growing, supermarkets, death of small farmers, obesity, our addiction to sweet in everything we eat, active encouragement of a carbohydrate diet (the resulting discouragement of fruits and vegetables), and, many more:

  • The first world war accelerated the demand for more food production, which led the Government (United States Department of Agriculture-USDA) to start encouraging better science and technology for crop growing, harvesting, processing and storage. The increased production fed into the need for better distribution.
  • In the 1920/30s with the rising urbanization in the USA, the policymakers worried about food becoming unaffordable to the working class and the middle class in the cities.
  • Once the war ended, and the great depression started, the increased food production remained the same, but the demand died out, so over production was a problem. The Government handled this with subsidies and price guarantees to the farmers, which led to more increase in production.
  • That’s when Supermarkets (in 1930s) were started. The predecessor of the supermarket was the dry-goods store, equivalent to India’s ubiquitious corner grocery stores (Kirana shops).  The early supermarket chain Piggly Wiggly  pioneered the self-service retail model
  • Supermarkets through their efficiency in procuring & distributing, keeping the prices low were seen favourably by the policymakers. As soon as the Supermarkets came, standardization started. It meant particular crops, specific breeds with certain traits/colour/size were favoured over others, which almost killed all the non-confirming varieties.
  • Between 1946 and 1954 in the U.S., the share of food bought in supermarkets rose from 28 percent to 48 percent. By 1963, that number had risen to nearly 70 percent.
  • Then, in the cold war USA wanted to display to the world that the capitalism was a better model than the communism. They did that by projecting the abundance in items especially food items in their well-stocked supermarkets, which were sharply in contrast to the communist countries’ shortage and long queues. This too, fed into the growth of supermarkets in America and which was copied around the world.
  • These led to increasing mechanisation, which due to their upfront cost favoured the large farms and killed the smaller farms.
  • Now the surplus crops (corn, maze, and wheat) had to be used somewhere, which created the High-fructose corn syrup: the one item that is universally hated by nutritionists. The rest were becoming animal feeds, which in turn made America the largest producer / consumer of meat. You get the picture now-Increased Crop yields, reduces prices, increased animal feed, fattened animals, more meat available, cheaper meat, cheaper carbohydrates, costlier fruits & veggies, fattened humans, followed by illness and so on.

It is unbelievable, a policy of one country (USA) could’ve had the above far-reaching consequences around the world. At least to balance this unipolar thought system, I wish the world had more economic superpowers [that are built around open societies].

Listen to the podcast from here.

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