on the whole beneficial in making good cars available for moderate prices. It was however disruptive to the established but then-aging American auto industry, putting great economic stress on the Midwest and some on the US as a whole. Other national economies were likewise affected in various ways both positive and negative, a reshuffling that rippled through the world economy as a whole.
Economic development in one country may also have a more general transformative effect on the world economy. Even as the American industrial sector was struggling in the 1970s and 1980s, the US was also giving rise to a new computer industry. Not only has this industry produced a surge of growth in the US economy, it has also changed the ways the entire world does business. Improved communications have accelerated capital flows, and permitted innovations such as "just in time" manufacturing. These changes have in turn triggered a host of shifts in trading patterns, and indeed in the goods traded, effecting a general transformation of the world economy.
B. Why might a nation that formerly supported free trade turn toward protectionism? In brief form, it might do so because its own economic makeup has changed, or because the world economy has changed. In either case, the changes may be such that the general advantage of free trade (lower all-round prices) come to be seen as outweighed by the more localized -- but thus more strongly felt -- advantages of protectionism.
Consider first the case of a primarily agricultural country, whose agricultural sector is capable of producing substantial exports, while its industrial sector is small (and thus lacks political influence). This country must import most manufactured goods, but it is easily able to pay for them with its ample agricultural exports. Both farmers and consumers benefit from free trade; farmers can sell their surplus more easily, and consumers can buy foreign manufactu...