a multidisciplinary approach takes time and effort because of the need to understand each other's language and alternative perspectives, our social product will tend to be higher if we take this approach.
Before providing a historical perspective on protectionism, it is useful to first provide a brief outline of the benefits of international trade. Economists tend to be the ones who articulate the benefits of international trade. These benefits tend to be subtle and not always directly observable, whereas the costs in terms of displaced workers and perceived effects on the distribution of income are more explicit and observable.
The easily observable benefits of international trade are the expansion of consumer choices and the reduction in prices of goods and services it brings. An important example of this occurred when the United States was flooded with imports of automobiles from Japan. The United States was fortunate that protective measures against imports at the time were quite low. U.S. automobiles were not keeping up with the quality of automobiles from Japan and Germany, and they were expensive in comparison. Imports expanded quality opportunities for U.S. consumers, and at a lower price. That is the means by which increases in per capita incomes come about.
The experience with Japanese automobiles teaches us another lesson. Recent developments in economic theory have linked international trade to economic development. Trade is not only an important means of bringing new technology into a country, but it forces domestic economies to modernize and thus lower their cost of production, again benefiting consumers with declines in the price of consumer goods.
In recalling what happened in the case of automobile imports from Japan, it did not take many years for U.S. automobile companies to catch up on the technology that the U.S. consumers wanted imbedded in their automobiles. Moreover, in a relatively short period of time they were also able to modernize their production practices, so they became more competitive with imports. Ultimately, jobs were saved here at home, but in a way that contributed to economic growth and development.
This points to another aspect of international trade worth noting. Economic growth benefits from an expansion of trade in part because the foreign exchange increased exports earn can be the means of financing a higher rate of economic growth and development. But the benefits will tend to be much broader. International trade enables individuals to benefit from an international division of labor that is based on specialization and on the unequal distribution of resources around the world. By making more efficient use of the world's scarce resources, everyone participating in that division of labor has their standard of living raised. The exceptions, of course, are those most damaged directly by the trade, which will be discussed below.
In regard to the historical perspective on protectionism, if one goes back in time, tariffs were the primary barriers to trade. Moreover, many, if not most,