DRUM said:
Lorentz law is not about fields, but about FORCE, which is why it is called 'Lorentz force law'. Why do you even mention FIELDS? Where did you ever hear fields do work? Why not talk about how unicorns do no work? What is this? FORCE DOES WORK, NOT FIELDS.
Do you realize Lorentz force acts exactly in the direction of wire displacement?
At any rate, there is no need to shout or be impolite. Of course I understood your argument the first time I saw it. I've heard it many times before from students. You should not assume that you are the first to come up with this great counterexample.
The Lorenz Force on a point particle of electric charge q, moving in electric field E and magnetic field B with the velocity v is F=qE + (q/c)v\timesB. The second term in this formula is the force due to the presence of magnetic field, and it is always directed perpendicularly to the particle velocity, v. This is why people say that the magnetic field does no work: because the force which arises due to the presence of the magnetic field does no work. No unicorns needed to understand that, I hope.
Now since the magnetic field does no work on any charged particle of the wire, it does no work on the wire as a whole, either.
The mistake you have made is that the force apparently applied to the macroscopic wire is not by any means the magnetic part of the Lorentz force. Indeed, the wire is electrically neutral, and the Lorenz force, as defined above, needs a net charge (or charge density).
In reality, the magnetic part of the Lorenz force is applied ONLY to the free electrons which drift inside the wire. The effect of the magnetic field is to curve the electron trajectories (without doing any work!) and to make electrons bump onto the wore wall from inside. This deviation of electron motion from straight trajectories creates local deviation from electric neutrality inside the wire and, as a result, gives rise to some macroscopic electric field. This electric field does the work when the wire is mechanically accelerated as a whole.
This may seem to be impossible: the wire literally accelerates itself, as if in violation of the Newton's third law. And it would be impossible without the presence of the magnetic field. The latter constrains the motion in such a way that the Newtons third law is no longer applicable. The two subsystems of the wire (the negatively charged conductivity electrons and the positively charged ions) exert on each other a net total force. This is the force that is observed macroscopically and makes the wire accelerate.
In general, the third law in electrodynamics should be applied only with extreme caution. There are many instances when it breaks.
Think some more about the example with the swing; it may be useful to gain some understanding of what's going on.
DRUM said:
What formulas do you use to model this interaction?
How do you explain wires repel if we change direction of the current in one wire?
A) The Columb law of electrostatics.
B) Because the electrons, when they deviate from straight trajectories inside the wire, can go either to the left or to the right, depending on the direction of the external magnetic field, and they would push the wire either to the left or to the right.
Finally, why is it such a big topic? I've noticed that general public (by that I mean nonphysicists) are most interested in the subjects which are abolutely inconsequential and can not be even considered as part of theoretical physics.
How does it matter whether the magnetic field does work in this situation or not?
Can you offer an experiment in which your understanding of this phenomenon would lead to a different observable? Can you predict a new effect? If not, this discussion has no relation to physics whatsoever and should be moved to philosophy or linguistics forum.