Autarky is an economic policy or doctrine in which a country seeks to build a self-sufficient and independent national economy. This means limiting or eliminating foreign trade, relying instead on domestically produced goods and services to meet the needs of the nation.
Etymology and Historical Context
The term “autarky” is derived from the Greek word “autarkeia,” meaning self-sufficiency. Historically, autarkic policies have been prominent in various nations during different periods. For example, Nazi Germany and Fascist Italy in the early 20th century sought autarkic policies to reduce reliance on foreign resources.
Mechanisms of Achieving Autarky
Trade Barriers
To achieve economic self-sufficiency, a nation may implement trade barriers such as tariffs, import quotas, and embargoes to protect domestic industries from foreign competition.
Domestic Production
A critical aspect of autarky is fostering domestic production. This can be achieved through subsidies, government investment in domestic industries, and promoting the development of key national resources.
Strategic Resource Management
Countries pursuing autarky focus on managing and utilizing their own natural resources to ensure sustainability and reduce dependency on external sources.
Types of Autarky
There are different forms of autarky, including:
- Complete Autarky: A nation achieves complete economic independence, producing all its goods and services domestically without any foreign trade.
- Partial Autarky: A nation seeks to be self-sufficient in critical or strategic sectors while still engaging in international trade for non-essential goods and services.
Special Considerations
Economic Efficiency
While autarky aims for self-sufficiency, it can result in economic inefficiencies, higher production costs, and a lack of innovation due to reduced competition.
Political Implications
Autarky can be driven by political motives, such as national security concerns or ideological beliefs about self-reliance and independence from foreign influences.
Examples of Autarky
- North Korea: Known for its self-reliant policy of Juche, North Korea strives to maintain an autarkic economy with minimal foreign influence.
- Historical Cases: During World War II, Nazi Germany and Imperial Japan implemented autarkic policies to sustain their war efforts independently.
Related Terms
- Closed Economy: A closed economy is an economic system that does not interact with other economies in terms of international trade. It is closely related to autarky but does not necessarily aim for complete self-sufficiency.
- Protectionism: Protectionism involves implementing policies to restrict imports to protect domestic industries from foreign competition, which is often a tool used in pursuing autarky.
FAQs
What is the main goal of autarky?
Is autarky feasible in the modern world?
What are the drawbacks of autarky?
References
- Heckscher, E. F. (1950). Mercantilism. London: Allen & Unwin.
- Mises, L. (1949). Human Action: A Treatise on Economics. Yale University Press.
Summary
Autarky represents a policy direction where a nation strives to achieve complete economic independence by minimizing reliance on foreign trade. While historically significant and politically motivated, modern autarky faces challenges in globalization’s context due to economic inefficiencies and potential isolation.
By understanding autarky, its contexts, mechanisms, and implications, one can grasp the intricate balance nations attempt to maintain between self-sufficiency and international economic engagement.
