Tuesday, April 6, 2010

The Underreported Relationship

I've always thought that as the world's largest democracy, and one that was able to gain its freedom peacefully from Britain, we should have been paying more attention to developing good ties with India. They do of course have to do a bit more to get their own house in order to have the economic clout for them to be a bigger economic partner but I can't help wondering if there is more potential here if only we made it a priority. In any case, the NY Times reports Geithner is heading over there to "inaugurate a new economic and financial partnership" (whatever that means) so perhaps we'll see another baby step to better interactions.

What all this was really leading up to, was that I wanted to mention the farm subsidies. What is it about this sector that gets supposed economically rational people all screwy? It's always an outsize sticking point in any negotiations. For India it makes sense, it still employs so many of their people. For us, it makes less sense, at least from an economically rational standpoint. Politically, we've found a few ways to give farmers outsize political power but for anyone that thinks the economy is an important political driver it still needs to be explained why their power has persisted for so long. Anyone that thinks we're economically rational better have a really good explanation for this because I'm stumped for anything but cultural explanations.

1 comment:

  1. It doesn't make sense to me for India, either. If you have a lot of peasants you want to help, better to help them than their crops.

    You won't catch me defending the rationality of humanity, particularly with regard to pork-fed grain.