Your analysis fails to consider what happens when our workers loses their productivity edge in an export industry. If that happens, the whole industry moves to China (or wherever). A LARGE number of workers lose their jobs. If the workers cannot atain comparable productivity in another industry, which is likely in many cases, then they see a PERMANENT as in LONG TERM drop in income, and so does the country as a whole. That loss might be offest by lower prices for consumers and higher returns for investors, but it need not be. If a some of the industry's sales come from exports, the loss of the income from that industry will outweigh any gains we get through lower prices and higher investment returns.
The wholes in free trade theory have been apparent to academics for 20 years. Now they're finally being made public. It's about time.
Indeed, a large number of people that produced TV sets lost their jobs: not a single TV set is produced in this country since 1980s. What happened to these workers? In 1961, out of every 12 airplanes flying anywhere in the world, 11 were produced in the U.S. Now, this is clearly not the case. What happened to those workers?
In mid 1800s Pittsburgh was producing half of all steel and three quarters of glass in the world. What about now?: What happened to those workers?
If the workers cannot atain comparable productivity in another industry, which is likely in many cases, then they see a PERMANENT as in LONG TERM drop in income,
This is incorrect: these workers find jobs in other industries. A person that assembled cars can assemble airplanes without loss of income. The one who assembled TV sets in 1980s assembled computers in 1990s at a HIGHER level of income. Your perception, driven perhaps by what you read in the newspapers, is simply incorrect.
The wholes in free trade theory have been apparent to academics for 20 years. Now they're finally being made public. It's about time.
Don't be silly. Please point to specific papers that you have in mind.