a.) The markets of cotton described by Rivoli are greatly different from idealized, pure market theory. The markets have been manipulated by culture, government subsidies, chemical engineering, and more. One of the most interesting aspects of the cotton market to me is how the success of the cotton industry in the US is due to the avoidance and control of the labor market. Cotton farmers of the American west have seen huge benefits from practices such as sharecropping, government regulations, and slavery that have allowed them to exploit cheap labor to their unpredictable needs. Rivoli exposes that it is much more than just governmental subsidies that are responsible for the historical and continual dominace of the American cotton industry.
b.) An example of culture interacting with economics is how the American culture has supported and encouraged innovation while the Chinese cotton farmers have to incentive to innovate. This is one of the underlying causes besides subsidies that have contributed to the success of American cotton.
c.) As I previously knew nothing about the American cotton industry or any cotton industry, almost everything in this first section of the book surprised me. What surprised me most was the stability that American cotton farmers experience. They are receiving substantially more money per pound off cotton than foreign farmers but more importantly have insurance nets that save them not only from falling prices but also from falling yields. It was striking to read about how an American cotton farmer can shrug off a weather disaster to their crop while farmers elsewhere may be destroyed financially and resort to suicide. I think it is important, when examining the fairness of subsidies, to not just look at monetary value but also the value of safety provided to American cotton farmers.
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