This article examines how anthropology's emphasis on the traditional values of peasants reflected the general precepts of 'modernization theory', the dominant development discourse of the Cold War era. It explores how such ideas lent credibility to the U.S. strategy of 'community development' as a central part of its response to radical rural change. Special attention is paid to the Cornell-Peru Project at Vicos in the Peruvian highlands, which attained legendary status as a case of applied anthropology, but is here examined in relationship to the strategies of the U.S. power elite and Cold War government policies.