The Travels of a T-Shirt in a Global Economy Part 1

In the typical idealized, pure market there are a large number of firms in the market all with homogenous goods, and thus all competing fairly and for a profit that is not off the charts. The market Rivoli discusses differs from this because with the help of the government the United States cotton farmers are able to compete in a market that they would otherwise not be able to. They are able to operate inefficiently (i.e. much higher labor and land prices in the United States in comparison to other agricultural nations) and still  not have to worry about the consequences due to these enormous subsidies. Thereby ensuring their place of dominance in the cotton industry.

An interesting example of how culture can sometimes interact, and at the same time interfere, is in the story of Eli Whitney and his revolutionary machine for the cotton industry. At this time in the United States, thanks to Mr. Whitney's machine, the United States was able to further itself from its cheaper competitors in India and China. But one would wonder why China and India didn't choose to accept the same technology and thus advance right along with the United States at the time. The answer is simple; India and China are two countries who are very rooted in their old ways, which eventually led to their choice to lose efficiency in the name of remaining loyal to their originality, and at the same time resistant to the ever changing new world, much like Schweder mentions in his prophecies as well.

What comes as the biggest surprise to me is even after international scrutiny of the unfair use of subsidies by the American government, there has been no falter. In fact, as mentioned in class, after being sued by Brazil over unfair trade practices due to these subsidies the United States did not stop or even slow down, rather they chose to issue more subsidies in the United States, and shockingly to Brazil too. A sort of large scale bribery one might say. It is shocking that in a country so adamantly supportive of the free market system that we would support something like this as much as we have. But I guess in the end, cash is king.