production requires pollution precisely by making those products more expensive for consumers." He recommends linking tax increases related to "bads" such as pollution to tax decreases on "goods" related to productive work, as exemplified by social security taxes. (The ABC's of Political Economy, 272) From an international strategic perspective however, he has thrown his support behind a cap and trade system. He argues that progress has been made toward a cap and trade system and should not be discarded, that such a system would foreground scientific and climatological expertise rather than economic expertise, and that such a system is much more achievable on an international level. Corporate-sponsored globalization, criticism and activism As the nineties wore on, Hahnel became increasingly immersed in analysis of corporate-sponsored globalization, and actively participated in movements opposed to it. As disparate oppositional groups planned and unified for what were to be momentous demonstrations against the World Trade Organization meetings in Seattle in 1999, Hahnel was among the leading economic analysts educating popular movements. His first major book authored without Michael Albert was "Panic Rules". The book features concise analysis of crises due to financial liberalization in the era of globalization, a critique of the ideology and practices of global institutions such as the WTO, IMF and World Bank, and a tightly argued explanation of the conditional insights and much overlooked limitations of international trade theory based upon Ricardo's theory of comparative advantage. Hahnel acknowledged core insights within comparative advantage theory, noting that "if opportunity costs of producing goods are different in different countries there are potential gains from specialization and trade." However, he explained that the potential gains are realized only under specific conditions, and expounded on the many real world factors that can account for significant efficiency losses. Among the most significant factors for efficiency losses from trade are inaccurate prices due to significant externalities that cause misidentification of comparative advantages, unstable international markets that create macro inefficiencies, and adjustment costs of moving people in and out of industries that can be considerable. Moreover, in spite of Ricardo's theory, international trade usually aggravates global inequality because terms of trade are set inequitably as a result of the dominant bargaining positions of northern countries, and thanks to class structures that ensure the costs and benefits of trade are distributed unfairly within countries. (see ABC's of Political Economy, 176–207) Theory and practice of economic justice and democracy