Friday, April 23, 2010


I believe I've mentioned this concept before, but I didn't define it. Autarky is an economic system in which the system is completely self sufficient. Imports and exports are not allowed.
In any big economy like ours, this would be a disaster. We count on imports to buy from the cheapest available sources worldwide, and we count on exports to not be wiped out by all that importing. But there are economies who would benefit from such a scheme.
Very small economies, newly started, would benefit, as start-ups would not have to face competition from deep-pocketed multinational corporations. Forced to rely on their own talents and skills for survival, people would build the resources to supply needs, and unfilled needs would be obvious to would-be entrepreneurs.
Of course, once founded companies become large enough, autarky becomes impractical. When you've reached a national economy of trillions of dollars, as the top 8 or so nations have, then going multinational is your only hope of the continuing expansion that economy requires. To forbid that expansion is to suffocate that company. Autarkies are price inefficient, which is tolerable for a small commune, but intolerable for the trillion-dollar economies. Once everyone's working, paying $8 for dinner is insufferable when you can easily see that your neighbor(ing country) eats that same dinner for 75 cents.
Only one country is pursuing such a strategy, albeit a slightly modified one. North Korea's "Juche" system is an Autarky plus a tourism industry to take foreign money. It's not working well -- it wants to be a command economy, but isn't investing enough research for that to work properly. The power goes off regularly. Reports of starvation escape. I think North Korea has reached the point where dropping autarky is recommended, but they wish not to do that for political reasons.
I would recommend autarky for, at this point, only the impoverished nations of central Africa, and then only long enough for the big startups to get off the ground level. Everyone else clearly benefits from international trade.

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