INDUSTRIES FOR FREE TRADE 351 ing from previous historical periods of rising and falling protectionism, these analysts expected the 197os and 198os to look much more like the Igzos than like the period between 1934 and 1970.In fact,the 1g2os were offered frequently as the example for the decade after 1973.For many, the threat of a significant closure of the U.S.market evoked a repetition of the dismal interwar years. In this article,I challenge that view of the current period.There were sizable differences in trade policy outcomes between the 192os and the 197os;these differences are puzzling because they belie the predictions of other theories.I maintain that a primary reason for these different policy outcomes was the growth of international economic interdependence after World War II.By the 197os,the expansion of these international economic ties helped to dampen pressures for trade barriers as the pref- erences of industries turned against protectionism.Using evidence from a number of industries in the Ig2os and the 197os,I shall show how the internationalization of firms reduced their interest in protection even in difficult economic times,and thus helped the United States to resist pro- tectionism in the 1970s. THE PUZZLE Two common elements,which distinguish the 192os and the 197os from the intervening years,seem central in this comparison between their trade policies.First,both the 1gzos and the 197os were times of serious economic distress and instability.Such difficult conditions have been seen as a key precondition for rising protectionist activity.One economist noted: It is generally agreed that in a modern industrial economy the cyclical state of the economy and the country's competitive position internationally are the principal determinants of the degree of protectionist pressure.Low lev- els of economic activity,high unemployment,unused capacity,trade defi- cits,rapid increases in imports,and increases in import penetration all op- Kronholz,"Trade and Currency Wars Deepen the Depression,"Wall Street Journal,October 23,I979,P.1. Hegemonic stability theorists have also predicted such a resurgence.See Charles Kindle- berger,The World in Depression,1929-1939(Berkeley:University of California Press,1973), esp.307-8;Robert Gilpin,US Power and the Multinational Corporation (New York:Basic Books,1975),esp.258-62.For more skeptical views,see Stephen Krasner,"State Power and the Structure of International Trade,"World Politics 28(April 1976),317-47;Robert O.Kco- hane,"The Theory of Hegemonic Stability and Changes in International Economic Re- gimes,"in Ole Holsti,Randolph Siverson,and Alexander George,eds.,Change in the Inter- national System (Boulder,CO:Westview Press,1980),131-62.INDUSTRIES FOR FREE TRADE 351 ing from previous historical periods of rising and falling protectionism, these analysts expected the 1970s and 1980s to look much more like the 1920s than like the period between 1934 and 1970. In fact, the 1920s were offered frequently as the example for the decade after 1973. For many, the threat of a significant closure of the U.S. market evoked a repetition of the dismal interwar years. In this article, I challenge that view of the current period. There were sizable differences in trade policy outcomes between the 1920s and the 1970s; these differences are puzzling because they belie the predictions of other theories. I maintain that a primary reason for these different policy outcomes was the growth of international economic interdependence after World War 11. By the I~~OS, the expansion of these international economic ties helped to dampen pressures for trade barriers as the pref￾erences of industries turned against protectionism. Using evidence from a number of industries in the 1920s and the I~~OS, I shall show how the internationalization of firms reduced their interest in protection even in difficult economic times, and thus helped the United States to resist pro￾tectionism in the 1970s. Two common elements, which distinguish the 1920s and the 1970s from the intervening years, seem central in this comparison between their trade policies. First, both the 1920s and the 1970s were times of serious economic distress and instability. Such difficult conditions have been seen as a key precondition for rising protectionist activity. One economist noted: It is generally agreed that in a modern industrial economy the cyclical state of the economy and the country's competitive position internationally are the principal determinants of the degree of protectionist pressure. Low lev￾els of economic activity, high unemployment, unused capacity, trade defi￾cits, rapid increases in imports, and increases in import penetration all op￾Kronholz, "Trade and Currency Wars Deepen the Depression," Wall Street Journal, October 23, 19793 P 1. Hegemonic stability theorists have also predicted such a resurgence. See Charles Kindle￾berger, The World in Depression, 1929-1939 (Berkeley: University of California Press, 1973)~ esp. 307-8; Robert Gilpin, US Power and the Multinational Corporation (New York: Basic Books, 1975)~ esp 258-62. For more skeptical views, see Stephen Krasner, "State Power and the Structure of International Trade," World Politics 28 (April 1976), 317-47; Robert 0.Keo￾hane, "The Theory of Hegemonic Stability and Changes in International Economic Re￾gimes," in Ole Holsti, Randolph Siverson, and Alexander George, eds., Change in the Inter￾national System (Boulder, CO: Westview Press, 1980), 131-62