The failure to learn history’s simple lessons

Farm and Food File for the week beginning Sunday, May 5, 2024

Long before it became a cliché, there were many heroes who never wore capes.

I met one: the rail-thin, then-86 year old Theodore W. Schultz, in his sun-filled, University of Chicago office on a cold, January day in 1989, a decade after he had been awarded a Nobel Memorial Prize in Economic Sciences.

As I noted in the resulting Top Producer magazine profile, Schultz was “perhaps the world’s most pre-eminent agricultural economist” having “spent a lifetime disproving the simpleness most other economists attached to farming and farmers.”

What that meant, Paul Burnett, a Canadian economist explained in an article on Schultz’s bitter, 1940s fight with the then-named Iowa State College (now Iowa State University), was Schultz understood “that markets are made, not born, and that subtle arguments need to be advanced to increase the scope of liberty and decrease the monopoly power of collective organizations.”

Subtlety, however, wasn’t a Schultz trait. Intellectual honesty and personal integrity were hallmarks of more than seven decades of his research and teaching. (He died two months shy of age 96 in 1998.)

Born to a South Dakota farming family, Schultz never finished grade school or even attended high school; his father kept him on the farm after war came to Europe in 1914 because, he explained, “every hand was needed to meet the demands it generated.”

After the inevitable post-war bust, Schultz accompanied his father to evening meetings of the Non-Partisan League where speakers told them that “the big grain companies in Minneapolis were in cahoots with the railroads to cheat farmers.”

Schultz hoped to attend college but without so much as a diploma from grade school what institution would admit him? A letter to the president of South Dakota State College (now South Dakota State University) in 1921 got him in the door and by 1928 he had a Ph.D. in agricultural economics from the University of Wisconsin.

By 1935–and not yet 33 years old–Schultz was chair of its Iowa State College’s Department of Economics and Sociology. There he quickly built an ag econ juggernaut that one of his students, D. Gale Johnson, later described as “first rank… that produced four presidents of the American Economic Association, four members of the National Academy of Sciences, and one Nobel laureate other than himself.”

But his brilliance couldn’t protect him when he and his staff came under attack in 1943 by Iowa farm groups over–of all things–oleomargarine.

The fight began when Schultz defended a young colleague who, due to World War II shortages, postulated that vegetable-based oleo “could entirely displace butter” in Iowa with “one-half of the crop land and one-eighth of the labor” required of dairy.

The study was an academic exercise–no one at Iowa State was advocating the switch–but statewide farm groups, led by the powerful Iowa Farm Bureau, saw it as heresy. Schultz and his staff came under withering attack from farmers, farm groups, and even Iowa State’s weak-kneed leaders.

Schultz shot back; he said he understood the farmers’ anger because, after all, they had “expectations” that the college was theirs to pressure “regardless of the effects of what was done upon the welfare of the public generally.”

The retort hit its mark but Shultz knew his science would never defeat their politics. He resigned and headed east to the University of Chicago with “his integrity intact and his reputation enhanced.”

Once there, the Great Plains farmboy, who never finished grade school or even attended high school, became a cornerstone in today’s Chicago School of Economics, the intellectual home to 13 Nobel laureates in economics.

And all greased by a political brawl over oleomargarine–that, incidentally, went on sale in Iowa just 10 years after Schultz left for Chicago and decades before he won his Nobel.

© 2024 ag comm