The problem with your theory is that there is no such thing in reality. Never has been, never will be. Human beings will always maneuver for some advantage and render the "laissez-faire free market" a greedy farce. All human endeavors must be regulated because human beings are not incorruptible. The regulation, however, should be at a minimum and serve commerce and not government.
. A Mexican will take a labor job at the factor in Mexico precisely because it is the best available option (to his knowledge) for employment. The wage may be miserly, and by American standards it is,
By American standards the wage is at subsistence. Hand to mouth. America cannot compete with countries that are willing to keep its own citizens pay at poverty level in order to sell cheap to America. In the case of Mexico, this policy only produces more illegal immigration than it reduces.
FYI, the US has had a tariff on Mexican Cement because it was so cheap that it was putting the four American producers of Portland Cement into the ditch without the tariffs. Now, because of Hurricane Katrina, the US Gov. is considering lifting the tariff (temporarily) to increase supply and keep prices stable.
Free trade will only work when the rest of the world catches up, economically and socially to the United States. Not before.
Yep. you got it.
Bingo
Actually, I agree, and I think you misunderstood me. Government's role in a laissez-faire free market is precisely a.) to prevent coercion through force and b.) to enforce contracts. Preventing coercion through force means that a punk with a gun can't coerce a shop-owner to empty the register and give the cash to him. Enforcing contracts means that when someone signs a contract to pay for the construction of a house, he must then actually pay the builders when the house is built. Here I think we agree completely despite a misunderstanding of defintions.
By American standards the wage is at subsistence. Hand to mouth. America cannot compete with countries that are willing to keep its own citizens pay at poverty level in order to sell cheap to America. In the case of Mexico, this policy only produces more illegal immigration than it reduces.
The wage might be at a subsistence level, but that's not the point. The next-best option for that worker may be starvation wages, which would be why he takes a job at subsistence wages in the first place. His lot has been improved as a result of a demand for his cheap labor.
In America, our labor is generally skilled and educated, which is why it's more productive, and therefore why our labor is paid much, much more. The advantageous position of Americans is not an accident. We are paid more because we produce more and our time is more valuable. As an example, the introduction of mechanization into manufacturing in America has vastly increased the value of labor because it makes each individual laborer more productive and hence more valuable, and the marginal producers are no longer profitable and find other lines of work (as in service, technology, and education). Automation in industry has resulted in the majority of real wage gains in America, not unions. (Unions were most useful as conduits of information, eventually they became a force of coercion against employers and held back real wage gains)
Regarding Mexican immigration. . . I think welfare is the largest contributor to it. In a free labor market, uneducated, unskilled Mexicans would be paid what they are worth (which would be less and less as they saturate the market) and the immigration would stop altogether. I'm personally in favor of immigration walls until the welfare state ends.
Free trade will only work when the rest of the world catches up, economically and socially to the United States. Not before.
I think it's the opposite. Trade will advance the third world far more rapidly than any amount of foreign aid money will.
As far as socially. . . I'll grant that trading with a hypothetical nation that uses slave labor is immoral as it would exploit the slave workers to own advantage. I don't think that's at issue though. Communist China is more capitalist every day, and at worst they use state coercion to exploit their workers.