The Argument for Neglecting Laid-Off Workers

Steven Landsburg has a provocative op-ed in the New York Times today. Essentially, he says that we should do absolutely nothing about American workers who are on the losing side of globalization:

All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices...
Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald's, should you compensate the owners of the diner next door? Public policy should not be designed to advance moral instincts that we all reject every day of our lives.
In what morally relevant way, then, might displaced workers differ from displaced pharmacists or displaced landlords?...
If you're forced to pay $20 an hour to an American for goods you could have bought from a Mexican for $5 an hour, you're being extorted. When a free trade agreement allows you to buy from the Mexican after all, rejoice in your liberation -- even if Mr. McCain, Mr. Romney and the rest of the presidential candidates don't want you to.

Well, for one thing, this isn't a matter of morality, it's a matter of equity, not to mention enlightened self-interest. And for another thing, it's entirely consistent to both rejoice in being able to buy cheaper goods, and attempt to help out those who have lost their jobs as a result.

But it doesn't really matter: I suspect that Landsburg lost about 95% of his readers when he found himself forced to start his argument with an "all economists know that" sentence.

Update: Rodrik weighs in.