Good post.

I think that one reason Dems tend to be in favor of protective tariffs is that it's often less painful to their voters in the short-term. It takes time to adjust to a global market that doesn't value unskilled and semi-skilled labor at nearly the going rate in America. So workers need to retrain and business owners need to rethink their niche and it seems easier to just put all that off as long as possible. Of course there will always be jobs available in America that can't physically be outsourced but the general principle holds.

I would think part of adapting to a global economy would involve improving our education system. I see two ways this could go: either everyone goes to college and gets an advanced degree so they can get a "skilled" position, or else we allow earlier specialization and get people actually working much sooner.

there  is plenty involved.

What exactly do you mean by WIN the global economy? You mean dominate through corporate management? Do you see the world being run as a corporate global enterprise? Do you see any standardization of products?

Your theories all sound good on paper, but if you look to Wal-Mart as the heigth of free trade I would have to take issue.

The problem I have with your grand theories is it takes no account of the most imporant resource to any company, the people. And with monster companies like Halliburton, Exxon Mobile etc., they do dirty business.

Do you propose a global standard for accounting? What international laws apply to US companies doing business with Iran?

Do you want your international monied transactions monitered? And if so who do you trust?

I am not happy buying clothes from China made by the hands of child laborers.

I am not happy buying goods from the Marianna's Islands, where Chinese women are promised US citizenship, and end up stuck in a slave labor cycle where their debt can never be paid off.

I would rather buy something from my next door neighbor, than support someone in say, Viet Nam.

I think it is this trend of globalization and greed that is striking fear in the hearts of the working class of America.

They see themselves as disposable. It is hard to take pride in your work when that work holds no value to your free trade economic dreams. It is sucking the hope out of the American dream.

or have you not heard of the "honey pot" theory. It was all such a Grand Idea. Letting business stablize the region.

  IN the quick battle of Iraq, we bomb em, write a constitution, then use free markets and business alliances to create a beautiful free and economic society, with the "right" kind of text books, and the right kind of democracy that is US friendly and free trade open.

  ONe small problem, we forget to respect the culture and the people.

  The free market is not God. Especially if it is used in an unbalanced way.

We see in Latin America, whether you agree politically with the leaders or not, they are riding high on an ANTI-FREE trade populist movement, trying to the US out of the mix of things. And it is resonating. These people have experience first hand what it means to be beholding to US Free Trade, and it seems more about control and surpression, and monopolizing resources, than about competition and captialism.

If your ideal of free trade were to work, capitalism would have to work free of greed and in concert with TRUE  competition. Not monopolies posing as competition.

So I'll go for the big one: Comparative Advantage.  Comparative Advantage is a doctrine from the age of classical economics--from David Ricardo , actually, who first produced a systemized explanation and justification for it.

As wikipedia explains , the problem is, the doctrine depends on a number of implicit assumptions, which in general fail to be true under current conditions:

Ricardo's principle relies on a variety of implicit assumptions that are debatable, such as that there is no (or a low) cost for transportation, and that the advantages of increased production outweigh externalities such as environmental contamination or social inequities. It is also necessary that there be restrictions on the flow of capital — otherwise, there would be no incentive to invest in the manufacture of either wine or cloth in England, since both are more costly to produce there.

Opponents of free trade often point out that globalized communications and transportation unavailable in Ricardo's time invalidate the assumption of capital immobility and cause capital to gravitate toward absolute advantage. Another concern is that comparative advantage only works when competition is absolutely perfect. It has also been argued that comparative advantage may reduce economic diversity to risky levels.

In other words, you have to ignore an awful lot in order for this putative sophisticated theory to actually describe the real world.  Consequently, ordinary folks who observe the real world directly and say, "This sucks!" are not necessarily foolish and delusional.  To the contrary, it's the educated/propagandized out-of-touch elites whose counter-factual cocktail chit-chat is deluded.

Here in the LA/Long Beach Harbor Area, for example, the health and mortality costs of air pollution due to international trade at the ports have been conservatively estimated at $3.25 billion per year in unpaid externalized costs.  A more recent study substantially increases the number of premature deaths, potentially boosting that figure to the neighborhood of $12 billion or more.  That's getting close to 10% of the value of trade through the ports--an enormous unpaid subsidy, without which a great deal of trade would simply be uneconomical.

One dysfunctional aspect of the "free trade" dynamic that's become particularly salient in recent years is the "outsourcing" of jobs.  Ronald Reagan's former Assistant Treasury Secretary, Paul Craig Roberts had this to say back in 2004:

Business Week Guest Commentary—The Harsh Truth About Outsourcing

The Future Of Work

Business Week, March 22, 2004

SPECIAL REPORT—WHERE ARE THE JOBS?

By Paul Craig Roberts

Guest Commentary: The Harsh Truth About Outsourcing. It's not a mutually beneficial trade practice—it's outright labor arbitrage

Economists are blind to the loss of American industries and occupations because they believe these results reflect the beneficial workings of free trade. Whatever is being lost, they think, is being replaced by something as good or better. This thinking is rooted in the doctrine of comparative advantage put forth by economist David Ricardo in 1817.

It states that, even if a country is a high-cost producer of most things, it can still enjoy an advantage, since it will produce some goods at lower relative cost than its trading partners.

Today's economists can't identify what the new industries and occupations might be that will replace those that are lost, but they're certain that those jobs and sectors are out there somewhere. What does not occur to them is that the same incentive that causes the loss of one tradable good or service—cheap, skilled foreign labor—applies to all tradable goods and services. There is no reason that the "replacement" industry or job, if it exists, won't follow its predecessor offshore.

For comparative advantage to work, a country's labor, capital, and technology must not move offshore. This international immobility is necessary to prevent a business from seeking an absolute advantage by going abroad. The internal cost ratios that determine comparative advantage reflect the quantity and quality of the country's technology and capital. If these factors move abroad to where cheap labor makes them more productive, absolute advantage takes over from comparative advantage.

This is what is wrong with today's debate about outsourcing and offshore production. It's not really about trade but about labor arbitrage. Companies producing for U.S. markets are substituting cheap labor for expensive U.S. labor. The U.S. loses jobs and also the capital and technology that move offshore to employ the cheaper foreign labor. Economists argue that this loss of capital does not result in unemployment but rather a reduction in wages. The remaining capital is spread more thinly among workers, while the foreign workers whose country gains the money become more productive and are better paid.

Economists call this wrenching adjustment "short-run friction." But when the loss of jobs leaves people with less income but the same mortgages and debts, upward mobility collapses. Income distribution becomes more polarized, the tax base is lost, and the ability to maintain infrastructure, entitlements, and public commitments is reduced. Nor is this adjustment just short-run. The huge excess supplies of labor in India and China mean that American wages will fall a lot faster than Asian wages will rise for a long time.

In short, the reason why there is "widespread Democratic opposition to free trade" is simple: it hurts the average American worker a lot more than it helps.

(It's not just Paul Craig Roberts.  BusinessWeek as a whole has long been quite skeptical of globalism theories that ignore cold hard facts on the ground.  See, for example, The Judas Economy: the triumph of capital and the betrayal of work a 1997 book by  William Wolman, BusinessWeek the chief economist, and Anna Colamosca, a former BusinessWeek staff writer.  Their book warned of what Roberts wrote about seven years before his column appeared.)

The Versailles consensus in favor of free trade is a result of "The Fault Line We're Never Supposed to Talk About" , as David Sirota explains in a recommended diary over at Dkos:

That, my friends, is the fault line that is driving everything in today's politics: a battle between the people inside the Establishment whose careers rely on protecting the status quo and the vast majority of Americans who have been locked out of their own political and media debate.

In the course of the diary, he links to an earlier post of his at the Huffington Post, "Joe Lieberman & the Hostile Takeover of 'Centrism'" in which he writes:

How about corporate-written trade deals? Lieberman remains one of the most rock-solid supporters of pacts like NAFTA, WTO and China PNTR that were stripped of labor/wage/human rights/environmental protections and thus undermined American jobs, wages, and benefits. He has attacked as - gasp! - "protectionist" anyone (even fellow Democrats) raising any questions about these trade deals. For this, Washington pundits fall all over themselves to call him a courageous "centrist."

Yet, polls consistently show that the centrist position is one that supports pushing for a serious change of these trade policies. To the shock and dismay of the bipartisan Washington Establishment that pushes these sellout trade deals, polls continue to show that a majority of Americans have long wanted this trade policy reformed. For instance, as I have previously pointed out, a July 2005 PIPA poll found 56 percent of Americans said they are "not satisfied with the way the US government is dealing with the effects of trade on American jobs, the poor in other countries and the environment" while 90 percent of Americans want trade deals to include strong labor protections and 93% want strong environmental protections - protections deliberately removed from the trade deals Lieberman champions. Similarly, a January 2004 PIPA/University of Maryland poll found that "a majority [of the American public] is critical of US government trade policy." USA Today reported in 2004 that even high-income Americans "have lost much of their enthusiasm for free trade." A March 2003 EPIC-MRA poll found just 21% of Americans said they wanted to "continue the NAFTA agreement." A 2002 poll by Investors Business Daily and the Christian Science Monitor found an overwhelming 61% of Americans "think U.S. trade policy should have restrictions on imported foreign goods to protect American jobs." And a 1999 poll done on the five-year anniversary of the North American trade deal was even more telling: Only 24 percent of Americans said they wanted to "continue the NAFTA agreement."

Again, Lieberman's trade position is cited as proof of his "centrism" when in fact the actual data shows his position is on the fringes of American public opinion.

This is not to say that one can simply solve things by repealing existing free trade agreements.  But the first law of holes is to stop digging when you find yourself in one.

Ender:

I don't know what this talk about greed means because there is certainly nothing wrong with the desire to make as much money as possible within the law.

Jesus (Luke 6)

6:20. And he, lifting up his eyes on his disciples, said: Blessed are ye poor: for yours is the kingdom of God.

6:21. Blessed are ye that hunger now: for you shall be filled. Blessed are ye that weep now: for you shall laugh.

6:22. Blessed shall you be when men shall hate you, and when they shall separate you and shall reproach you and cast out your name as evil, for the Son of man's sake.

6:23. Be glad in that day and rejoice: for behold, your reward is great in heaven, For according to these things did their fathers to the prophets.

6:24. But woe to you that are rich: for you have your consolation.

6:25. Woe to you that are filled: for you shall hunger. Woe to you that now laugh: for you shall mourn and weep.

6:26. Woe to you when men shall bless you: for according to these things did their fathers to the false prophets.

Oh, and by the way, Jesus wasn't into Bush's "War on Terror," either.  As opposed to all the warmongering posts the conservatives have posted on this site recently, here's what Jesus went on to say:

6:27. But I say to you that hear: Love your enemies. Do good to them that hate you.

6:28. Bless them that curse you and pray for them that calumniate you.

6:29. And to him that striketh thee on the one cheek, offer also the other. And him that taketh away from thee thy cloak, forbid not to take thy coat also.

6:30. Give to every one that asketh thee: and of him that taketh away thy goods, ask them not again.

So let's not hear anything more about the "Christian Right," shall we?  Call it was it is: the "Pharisee Right."

I'd like to know what it is.

He must also ignore my much longer comment, with all the links, and the argument against the underlying rationale for "free trade."  He always goes for the quick jabs and ready one-liners.

Any sort of real depth is beyond him.  And, apparently, beyond our new economics "expert" here, too.

These guys appear to be little more than a walking collection of talking points.

There was nothing uncivil or abusive in what I wrote.  Nor did I vilify you or anyone else.

I simply made a critical observation about how you avoid substantive debate when people such as myself put time and effort into putting together proof that you aren't thinking very deeply, or haven't got a firm grasp of the facts.

There are two ways to counter this criticism:  You can start responding to my most work-intensive, substantive posts.  Or you can ban me.

It's clear which one you prefer.  Now let's see if you can get your playmates to go along with you.

I always love a good witch hunt!

You consistently attack Ender rather than Ender's arguments. I've asked you to stop repeatedly and you have not. Your interpretation of your behavior obviously differs from our interpretation of your behavior. As it happens, our interpretation is the one that actually matters. Sorry, file it under life-isn't-fair.

So, you also have two choices: (1) accept our (wrong, to you) interpretation of your behavior and modify it accordingly, just to please us or (2) continue to be abusive to the people who run SC.

No one has talked about banning you. Your posts are generally informative and provocative and I would say you are a valued member of the community here. Please remove the personal attacks from your posts in the future as we simply cannot allow them to continue.

How about "succeed"?  Unlike a sports game, there don't necessarily have to be losers here.  In fact, the whole point is that we can all be better off.

I would rather buy something from my next door neighbor, than support someone in say, Viet Nam.

That's where I disagree.  If someone in Vietnam can make the same product for less, I think it is unfair and perhaps even reprehensible to "buy American."  I don't want to prop up the parts of our economy that are sick (e.g. the auto industry) -- I want to force them to change.  If that means that GM and Ford go bankrupt, so be it.  Other, better-run companies will happily pick up the slack.

International competition has been a powerful force for good in American corporations.  Most corporations today are significantly better-run than they were 30 years ago, in no small part due to the fact that they have to compete a lot more with Europe and Asia.

What if our trade partner is a very opressive dictatorship with a horrible individual rights record and repression?

I think that, in all but extremely rare cases, trade sanctions will do more harm than good.  I think we should open trade with Cuba, for example.

Unilateral sanctions are pointless.  If the US and only the US decides not to trade with a given country, we have accomplished next to nothing.  After all, their goods can still reach the US -- just indirectly through other countries.  OK, so we can have our customs people search everyone's bags for Cuban cigars, but oddly enough, somehow Cuban cigars still find their way into the country.

If we want to have sanctions, we need pretty much the whole world to agree.  If *everyone* cut off trade with Iran, they would be in a world of economic hurt.

Then, we have to ask an additional question: does imposing economic pain on a country *actually* lead to US-friendly regime change or reform?  I can't see much evidence out there that it does.

The best that I can say for sanctions is that for the worst regimes on the planet, multilateral sanctions cut off their supply of cash, so they have less money with which to buy weapons.  That's about it.

To me, PNTR with China was a no-brainer.  Sure, China has certain authoritarian tinges to its government (hey, just like a bazillion other countries that we have no problem trading with), but it hasn't been communist in any real sense for 30 years now, and (despite the claims of a few scaremongerers) it isn't really a military threat to us.

From the Wikipedia quote:

It is also necessary that there be restrictions on the flow of capital — otherwise, there would be no incentive to invest in the manufacture of either wine or cloth in England, since both are more costly to produce there.

This logic is faulty.  As long as currencies are allowed to adjust, if a given country is an unattractive place to put investment dollars, its currency will depreciate until it is.  Foreign investors will not want to buy its currency to buy products/services, since everything is more expensive in that country; and they will not want to buy its currency to purchase investments, since those investments will offer poor rates of return.  Likewise, residents of that country can do the same thing in reverse -- invest their money overseas instead of domestically, and purchase products overseas.

Either way, this adds up to massive currency selling pressure.  If the currency is floating, it will depreciate.  If it is fixed, there will be a run on the country's central bank, which will eventually be forced by these pressures to devalue the currency.  Alternatively, the country could go through a period of deflation, but for various reasons deflation doesn't tend to happen very much in practice.

The other assumptions, such as zero transportation costs, are just a simplifying aspect of the model.  It is not hard to model trade with transportation costs.  Just like tariffs, transportation costs reduce the benefit of trade, but do not eliminate it.  Then again, you don't need to be an economist to know that "transportation costs are bad", and that we would be better off if we had an infinitely fast and free form of transportation (which, sadly, has not yet been invented).  Transportation costs don't make trade a bad thing; they just make it not as lucrative.

the health and mortality costs of air pollution due to international trade at the ports have been conservatively estimated at $3.25 billion per year in unpaid externalized costs

This hardly sounds like an argument against free trade, or against the existence of ports.  It sounds to me like an argument in favor of taxing air pollution.

Yes, there are conservatives who are anti-trade, like Paul Craig Roberts and Pat Buchanan.  Whatever.  I don't have to agree with them just because they're conservatives.  And from what I can tell, conservative opinion by and large disagrees with them on trade.  I've read PCR's views on trade before, I found them unconvincing then, and I find them unconvincing now.  His view of comparative advantage seems to suffer from the same myths as the Wikipedia article, in that it doesn't take the behaviors of currencies into account.  And it's easy to talk about the people "hurt" by trade, but he makes no serious effort to identify the benefits of trade (lower prices, markets overseas for our products, etc.), nor does he analyze what would happen to our economy if we *didn't* trade with China and India.

And yes, there are business journalists who are anti-trade.  Lou Dobbs, anyone?  Again, so what?  I don't have to agree with them.

Outsourcing/offshoring (the words are often used interchangeably, although really people usually mean "offshoring" when they say "outsourcing") are not nearly the threat the media has hyped them up to be.  My company has engineers in India, and all I can say to that is: you get what you pay for.  They may be 5 times cheaper than engineers here, but they're also not anywhere near as good as engineers here.  I don't know why they aren't, but they aren't.  It may be cultural in part -- they seem to be heavy on "book smarts" but weak at the practical aspects of the job, such as showing personal initiative.

Anyway, offshoring creates jobs and opportunities, too.  But you can't put a scare story on the nightly news about how moving low-value-add, low-skill work to India makes American businesses more competitive and, in effect, *increases* the value of high-value-add workers here.

Re poll numbers: is free trade popular?  I don't know, and I don't care.  If it's unpopular, it would hardly be the first time the majority of the American public was wrong about something.

Yes, free trade is something of an "establishment" position these days -- it's been part of the post-WW2 "economic consensus".  Presidents of both parties have reliably supported it, and while Congress gripes from time to time, by and large it ends up approving most of the important deals.  I don't see anything wrong with all that.  Sometimes the establishment is right, and sometimes it's wrong.  In this case it's right.

lordzorgon wrote:

Just like tariffs, transportation costs reduce the benefit of trade, but do not eliminate it.

Thereby trying to shift the ground, and essentially conceding the argument.

No one doubts that there are [some] benefits to [some] trade.  That's not the "free trade" argument at all.  And by switching terms like that, lordzorgon has basically given up defending "free trade".

Underlying all its diverse forms, the argument against "free trade" has at least two major components:

(1) "Free trade" fails to internalize its true costs, and thus is not free at all, but a form of subsidizied commerce in which the most profitable and mobile international enterprises are subsidized by the most fixed and impoverished populations.  It is, in short, a form of freeloading mixed with extortion.

(2) Among the true costs of "free trade" are some goods that simply cannot be monetized in any fashion--such as the public goods of local, regional and national autonomy.  Autonomy--and related public goods that autonomy potentially protects--can only be preserved by having some system of regulation that prevents purely economic arguments (even if all monetizable costs were internalized) from trumping all other concerns.

Neither of these components argues against trade per se, and I am, in fact, a huge fan of trade.  Trading societies are amongst the most progressive, innovative, open-minded, creative, and liberal in the history of human civilization.  But when trade decimates the fundamental economies of those involved, there is clearly something deeply wrong.

Such is the situation today, though the insulated members of the chattering classes don't experience it, so they can pretend it doesn't exist.  Most folks are not so lucky.

For example:

the health and mortality costs of air pollution due to international trade at the ports have been conservatively estimated at $3.25 billion per year in unpaid externalized costs

This hardly sounds like an argument against free trade, or against the existence of ports.  It sounds to me like an argument in favor of taxing air pollution.

Why, yes it is!  Except that

(1) Such taxes do not exist, and that is hardly an accident.  Externalizing costs is the main engine driving free trade.  It's the old theory vs. reality thing again.

(2) For most folks "free trade" means no taxes and no environmental regulations.  (Regulations <> "free")  And, indeed, the whole mindset of "free trade" is deeply anti-regulatory in general (despite the massive volume of actual free trade agreements, with their intricate detail), and especially hostile to labor and environmental regulations in particular.  So what you're really saying is "'free trade' works great, if by 'free trade' you mean 'fair trade.'"  Which, again, is conceding the argument, while pretending not to.

(3) The majority of that cost--which, as I mentioned, should now probably be placed up around $12 billion--comes from premature deaths.  That means, in essence, that those who create the costs may easily be taxed--in principal, at least (good luck with that, see #1 above)--but those who are harmed are not so readily compensated.  Like I say above, not all externalized costs are readily monetizable.  This one is monetizable only at one end--at least until technology is developed to completely control the pollution.

The ports are not the only example of what's wrong with the "free trade" theory.  They are, however, a relatively concrete and focused example.  And the problem of air quality is not the only externality involved.  The ports rely on transportation infrastructure--primarily roads and  railroads--which have their own externalities in the case of railroads, and heavily public subsidies in the case of roads (the taxes paid by deisel trucks are disproportionately small relative to the wear and tear they produce, even before non-gas-tax public funds are considered.)  And, of course, there is the cost of port security, which has largely simply not been paid.  So far, we've been lucky on that front.  But it only take one incident of the wrong kind to dramatically change the balance sheet.

In short, the real world is complicated, "free trade" theory is not.  It's no surprise that the more you look at it critically, the less sense it makes.  But thanks to our system of political discourse, there's not a whole lot of that critical looking going around.

There should be, though.  Because, as Benjamin Barber astutely noted in Jihad vs. McWorld, "free trade" and fundamentalist extremism are mutually reinforcing semi-opposites (opposed in principle, often collaborative in practice).  And the more that the externalized costs of "free trade" are ignored, the most that some of them serve to fuel the spread of extremism that sometimes lapses over into terrorism.

The alternative, as indicated above, is not "no trade."  The jibe at Paul Craig Roberts ("nor does he analyze what would happen to our economy if we *didn't* trade with China and India") is typical of the strawman arguments routinely used to defend "free trade."

But the real alternative is what's known as "fair trade"--trade conducted with a framework of laws that ensures fair treatment for all participants, directed or indirectly involved.  And, indeed, when pressed long enough on any given point, there are always some defenders of "free trade," who will offer fair trade solutions as a means to salvage "free trade"--just as  lordzorgon has done here with respect to taxing air pollution, for example.

Thus, once you strip the rhetoric away, you find that everyone actually supports fair trade.  But they won't admit to it, and they don't support a rational discussion of what it should look like.  Why? Because the real money lies in squeezing every last penny possible out of the unfair aspects of "free trade," and those who are doing the talking have a vested interest in seeing the "free trade" scam continue just as it is.

You need George Lakoff to explain how this works.  It has to depend on metaphor.  Because they surely aren't getting it from taking the Bible literally.

You bring up a variety of issues that exist even in the complete absence of international trade.  Air pollution, or road subsidies, and so on.  I simply don't see the bearing of those issues on the trade debate.  Again, I've already proposed taxes on air pollution as the right solution to that problem, and regarding road subsidies, I would prefer that roads be funded 100% by user fees (gas taxes are an imperfect solution, as you point out; but with modern technology it would be pretty easy to assess mileage fees based on vehicle weight for road wear&tear, peak vs. non-peak travel time for traffic, etc.).

Primarily, free trade is about abolishing or slashing protectionist tariffs and quotas, and eliminating barriers to foreign investment.  I distinguish "protectionist" tariffs from "revenue-raising" tariffs in that a very small non-discriminatory (same for all classes of goods) tariff, probably less than 1%, could be justified on the grounds of paying for certain government functions related to border and port security.  Services that only cross borders electronically would naturally be exempt because you can't exactly email a nuclear bomb into the US.  (Maybe you can email a "dirty bomb" for a certain meaning of the word "dirty", but I digress..)

There are also some secondary issues such as eliminating subsidies to favored industries (e.g. the US and EU slashing farm subsidies would promote free trade), or privatization -- basically, reducing government interference in national economies.  These are part of the WTO's mission, but I believe the case for free trade is rock-solid even in the presence of these distortionary policies, harmful though they may still be.  (If Canada wants to give its lumber industry export subsidies, I say: great!  Cheaper lumber for us, paid for by Canadian taxpayers!)

To call a proposed tax on air pollution a "fair trade solution" seems rather bizarre to me.  I would call it, perhaps, a more economically rational alternative to pollution quotas or micro-regulation... but I don't see any particular relationship to trade.

No one doubts that there are [some] benefits to [some] trade.  That's not the "free trade" argument at all.  And by switching terms like that, lordzorgon has basically given up defending "free trade".

Say what?  If "there are economic benefits to trade" isn't the free trade argument, what *is* the free trade argument?  I'm confused, because that's *precisely* the argument I support and the one that virtually all economists support.

Among the true costs of "free trade" are some goods that simply cannot be monetized in any fashion--such as the public goods of local, regional and national autonomy.

I'm not sure exactly what you mean by "autonomy", although if it means what I think it means, it sounds like a *good* thing to me that trade reduces it.  For example: if France wants to keep out California wine to preserve their historic culture, I say -- too bad!  French consumers have a right to be allowed to purchase California wine.  No government, elected or otherwise, has the "right" to forbid its citizens from trading with each other or with foreigners, or to levy oppressive taxes on such trade.  And no government, elected or otherwise, has the "right" to impose socialism on its citizens.  If trade undermines the welfare state (and in a small way, I think it does), even better.

But when trade decimates the fundamental economies of those involved, there is clearly something deeply wrong.

I don't know who in particular you are referring to, but it is simply flat-out false to say that trade is in any way "decimating", or anything close to it, the US economy.  Even under the most pessemistic views of things, the US economy is doing at least "OK" right now.

Such taxes do not exist, and that is hardly an accident.

Well, sure -- there are a lot of good policies that don't exist, and a lot of bad policies that do exist.  Yes -- enacting many of the good policies, and repealing many of the bad policies, is not politically feasible, and for a wide variety of reasons.  That doesn't mean I'm going to stop advocating those things!

Leaving politics out of things -- most economists of both liberal and conservative stripes support taxes on activities that generate negative externalities.  They may argue about how to structure those taxes and other prosaic details, but the basic concept of taxing negative externalities and subsidizing positive externalities is not exactly a controversial one in the economic world.

Greg Mankiw has even been leading a campaign on his blog in favor of carbon taxes (rather than, say, the Kyoto treaty) as the solution to global warming.  Mankiw is smack in the middle of conservative economic opinion.  (He is significantly to the left of me, though there is little practical difference in our views about what should change in current US policies.)

Externalizing costs is the main engine driving free trade.

If by this you mean externalizing environmental costs to *other countries*, I might actually agree (although I would change "the main engine" to "an engine").  Some simple economic models can demonstrate this, under a variety of assumptions.  Details are left as an exercise to the reader, but two possible models include:

1. Suppose we have a rich country and a poor country.  Suppose reducing air pollution is a superior good because it's a luxury compared to, say, food, water, and shelter, which the residents of the poor country can just barely afford.  Adding trade to the equation will reduce air pollution in the rich country and increase it in the poor country, while increasing the welfare of both countries.  In effect, the rich country will move some of its polluting industries to the poor country, which is happy to take them (despite the increase in pollution) because of the economic benefits.

2. Suppose we have two countries that are equally wealthy, but have different environmental policies.  One has no environmental laws at all, while the other taxes pollution exactly the "right" amount to reduce it to the optimal level.  In the absence of trade, welfare will be greater in the latter country.  Now suppose these countries start trading.  Polluting industries will move to the first country, while non-polluting industries will move to the second country.  Trade increases welfare in the second country and may either increase or reduce it in the first country.  In effect, the country with environmental laws can get a free ride off the country that doesn't have environmental laws.

A combination of these models could be used to describe part of what is going on with China today.  China is poorer and has fewer environmental rules than the US, so polluting industries are happy to move to China.  But this is a *good* thing for the US: it makes our country cleaner!  China suffers due to the resulting high levels of pollution, but that's their own fault and it's their problem to solve it, not ours.

I am happy to exploit, via trade, other countries which have irrational economic policies.  At the same time, we have to be careful ourselves, because other countries can exploit *our* irrational economic policies, too.

The majority of that cost--which, as I mentioned, should now probably be placed up around $12 billion--comes from premature deaths.  That means, in essence, that those who create the costs may easily be taxed--in principal, at least (good luck with that, see #1 above)--but those who are harmed are not so readily compensated.

This seems like a form of the standard argument that "you can't put a price on human life."  But you can, and we do, all the time.

No, you can't compensate people after they're dead.  But you *can* compensate people for potentially deadly pollution while they're still alive.  There are a lot of ways to structure it, but it's possible to work out a solution.

The optimal level of pollution is not zero; and it is not rational to spend an unlimited amount of money to prevent one death.  I would go further and say: the amount of money we *should* spend to prevent one "premature death" is probably somewhere between $1M and $1B.  Premature death is hard to define, but we could fix that by talking about how much money we are willing to spend to extend 1 person's life by 1 year.

the real alternative is what's known as "fair trade"--trade conducted with a framework of laws that ensures fair treatment for all participants

Well, who could possibly object to "fairness"?  The problem is that (1) life isn't fair and (2) many of the so-called "fair trade" proposals are in fact unfair themselves.  It is manifestly *unfair* to tell a poor country that they must outlaw child labor in order to trade with us.  Maybe it's also unfair that children in that country have to work in the first place to support their families, but outlawing child labor isn't going to solve that problem.

If you want to say that "everyone supports fair trade", the term "fair trade" ceases to mean anything.  My concept of "fair trade" is almost certainly radically different than yours.