[Nokinside]

No economist has ever claimed that global trade is Pareto-optimal inside nations. It's well known fact that some industries suffer and some thrive. It's just that the total sum is positive.

The trade shocks should not be handled with tariffs or restricting trade. It's domestic policy issue.

[lrajlich]

The issue is that distributional losses historically have been significantly underestimated in terms of scale and persistence or glossed over as insignificant. Economists traditionally have held that workers who lose their jobs to free trade, while losing their job in the short term, find a new job elsewhere and ultimately are better off. This is turning out to not be the case, some workers persistently remain worse off.

[resters]

To be fair, the rate of economic change is increasing, so part of the problem is that workers over-invest in skills only to have those skills obsoleted by the changing landscape.

So of course the worker who over-invested in job A and was compensated based on that over-investment is going to be worse off in job B when he/she has under-invested in the skills needed for job B.

The fields that are best for workers today are those that have built in required continuing education, or fields in which rapid change is widely acknowledged and understood by the workforce (software engineering, etc.)

[_dps]

> No economist has ever claimed that global trade is Pareto-optimal inside nations.

This is an important point, and I think plays into the question about tariffs (which, to be clear, I think are probably net negative).

The conventional argument is that free trade is a Kaldor Hicks [0] improvement, not a Pareto improvement. KH means that the sum of benefits and costs is positive, and it would be possible (in principle) to tax the beneficiaries and pay off the people harmed and create a synthetic Pareto outcome.

You could view tariffs as a clumsy attempt to apply the Kaldor-Hicks concept. I personally think there are much better ways, but I think the argument is at least plausible.

[0] https://en.wikipedia.org/wiki/Kaldor%E2%80%93Hicks_efficienc...

[Tyrek]

This needs to be emphasized more - Economics is given a bad rep for creating inequalities, but the field is playing with half the handbook - domestic policy in the form of fiscal policy (i.e. decision on how much and where to spend $), as well as distribution policy (i.e. how much redistribution to engineer via taxation/subsidies, etc.) has never been in the hands of any real economists - domestic politics has always taken the forefront in these decisions, and rightfully should take the blame for the results.