T-Shirt subsidies in the U.S. made it near impossible

 

T-Shirt
Writeup 1: Question 2

Even with these four
chapters it is obvious the author is advocating against the overly simplified
ways people see globalization. For example, when the poor countries were blaming
United Sates subsidies for cotton with not letting their own nation’s cotton
industry develop, they did not take into account how they lacked the institutions
and mechanisms that have supported cotton farmers in the U.S. It seems when
people citizen aspects of international trade they fail to see all of the
contributing factors to any nation’s economic situation within the world
economy.

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During the period just
before the Civil War, cotton in the United States was mainly intended for
consumption in foreign markets. Tobacco was once a more popularly farmed cash
crop, but as the prices dropped it was less profitable. Eli Whitney’s invention
of the cotton gin in 1793 led to tobacco being replaced as the main cash crop
of the South. The cotton gin made it possible for mechanized separation of cotton
fibers from their seeds. This machine was much more productive than manual
methods. And unfortunately, it also made slavery more profitable as cotton is a
rather labor intensive. The institution became ever more tied to the region’s
economy.

For much of the 19th
century, the United States of America was the leader in cotton production
throughout the world. Their largest consumer was England. Rivoli attributes the
continued industry supremacy of cotton growers in the United States to this present
day, to government subsidies, creative approach to entrepreneurship, and stability
of national institutions.

Government mechanisms, cotton
subsidies particularly, have led to much controversy in the last decades.
During trade talks for the World Trade Organization in 2003, several poor
countries argued that cotton subsidies in the U.S. made it near impossible for
their cotton industry to compete. To these nations, U.S. cotton subsidies are
more than an unfair competitive advantage or a violation of free trade. Benin
and others blame subsidies for keeping them in poverty.

            While
government subsidies do help, the author feels the creativity expressed by
United States cotton growers is the main factor for their success. Their
creative approach to all aspects of entrepreneurship, including production,
marketing, organization, and technology, allows for adaptation to any variation
in market forces like supply and demand.

            Cotton
farmers in poor nations placed blame on U.S. subsidies for their inability to
successfully integrate their small economy into the larger global economy, when
the lack of stable national institutions was at fault. Without a functioning market,
farm system, education system or government, farmers in poor countries cannot
access the necessary resources to compete globally. Academic institutions within
the United States are still contributing to the industry, with research, advanced
agricultural practices, and development of new technologies.