Furthermore, despite the theory of job losses from trade, most past research concluded that the real culprit of job loss was technology that automated away low skilled jobs in manufacturing, leaving only high skilled occupations (known as skill biased technological change)….
Note though that this hinges on two crucial assumptions of (1) frictionless labor market adjustment and (2) adequate redistribution of gains, suggesting that poor theory and policy are to blame for the harmful effects of trade as described in more detail below.
I don’t see the connection. It makes no difference to a displaced worker whether his job is now being done by a robot or a foreigner. It does make a difference to those who argue that automation is not a problem, that a frictionless labor market will find work for the Luddite masses. But that argument does not reject the claim that automation, and not trade, poses the greatest challenge to manufacturing employment, especially going forward, as even foreign labor is displaced by local robots.
Nor does the claim that automation is the problem negate the arguments for progressive solutions. Those may or may not make sense, but their merit does not depend on whether trade was ever the problem or is the problem now. Comparative advantage must be allowed to operate, except perhaps in the area of strategically important production — do we really want to rely on foreign steel, not to mention rare earths, for military use? The inventors will invent, and workers will be replaced. We need to figure out how to occupy ourselves usefully and to entitle ourselves to outputs on a basis other than contribution.
China’s social credit system suggests an avenue, but its Big Brother implementation is unacceptable. The Bible says that work is our punishment for original sin, but it may prove to be our punishment for not being able to be communists. If we can’t just work hard and take what we need — we are not wired to do that and so shouldn’t be expected to do that — “you eat what you kill,” plus some welfare payments, may be the only viable system for allocating outputs among members of our species. That is the challenge we face, and there is little chance that we can avoid facing it by rejecting the benefits of trade and/or automation outright.