[python] How can I verify if one list is a subset of another?

Assuming the items are hashable

>>> from collections import Counter
>>> not Counter([1, 2]) - Counter([1])
False
>>> not Counter([1, 2]) - Counter([1, 2])
True
>>> not Counter([1, 2, 2]) - Counter([1, 2])
False

If you don't care about duplicate items eg. [1, 2, 2] and [1, 2] then just use:

>>> set([1, 2, 2]).issubset([1, 2])
True

Is testing equality on the smaller list after an intersection the fastest way to do this?

.issubset will be the fastest way to do it. Checking the length before testing issubset will not improve speed because you still have O(N + M) items to iterate through and check.