Autarky
Encyclopedia
Autarky is the quality
of being self-sufficient
. Usually the term is applied to political states or their economic policies. Autarky exists whenever an entity can survive or continue its activities without external assistance. Autarky is not necessarily economic. For example, a military autarky would be a state that could defend itself without help from another country. Autarky can be said to be the policy of a state or other entity when it seeks to be self-sufficient as a whole, but also can be limited to a narrow field such as possession of a key raw material.
/autarchy (Greek: αὐτoκρατία/αὐταρχία "government by single absolute ruler"). Libertarian
theorist Robert LeFevre
used "autarchy" and "autarchism
" in the sense of self-government to describe his own political philosophy and to distinguish it from anarchism
.
was a policy followed by empires, especially in the 17th and 18th centuries, forbidding or limiting trade outside the empire. In the 20th century, autarky as a policy goal was sought by Nazi Germany
in the 1930s, which maximized trade within its economic bloc and minimizing trade outside of it, particularly with the then world powers such as Great Britain
, the Soviet Union
, and France
, with which it expected to go to war and consequently could not rely upon. The economic bloc wherein trade was maximized comprised countries that were economically weak – namely, those in South America
, the Balkans and eastern Europe
(Yugoslavia
, Romania
and Hungary
) – and had raw materials vital to Germany's growth. Trade with these countries, which was negotiated by then Minister of Economics Hjalmar Schacht
, was based on the exchange of German manufactured produce directly for these materials rather than currency, allowing Schacht to barter without reliance on the strength of the Reichsmark. However, although food imports fell significantly between 1932 and 1937, Germany's rapid rearmament policy after 1935 proved contradictory to the Nazi Party autarkic ambitions and imports of raw materials rose by 10% over the same period.
Today, complete economic autarkies are rare. A possible example of a current autarky is North Korea
, based on the government ideology of Juche
(self-sufficiency
), which is concerned with maintaining its domestic localized economy in the face of its isolation. However, even North Korea has extensive trade with the Russian Federation, the People's Republic of China
, Syria
, Iran
, Vietnam
, and many countries in Europe and Africa. Bhutan
, seeking to preserve an economic and cultural system centered around the dzong, has until recently maintained an effective economic embargo against the outside world, and has been described as an autarky. With the introduction of roads and electricity, however, the kingdom has entered trade relations as its citizens seek modern manufactured goods.
in the public and private business sectors. It is evident that several nations in the world do not have direct access to certain raw materials such as oil, coal, gas, wheat or fabrics such as wool due to geographical boundaries including climate, location, land size or population numbers.
Therefore the production of scarce resources becomes relatively expensive and a large cost to consumers and firms that need to pay a higher price for these goods and services.
The globalisation process has reinforced the concept of comparative advantage
as regions of economic exchange become more integrated across the world, due in part to the rising influence of transnational economic bodies such as the World Bank
, the International Monetary Fund
, the World Trade Organization
and trade agreements between nations with differing degrees of industrialization such as the Central American Free Trade Agreement, North American Free Trade Agreement
, the European Union
, KORUS FTA and AFTA, beginning in the last quarter of the 20th Century. Cheaper labor, commodity and compliance costs for multinational firms, access of corporations to raw materials and consumer markets located in previously autonomous regions, and the establishment of zero tax export zones
in developing nations are major motivational factors influencing the growth of international trade and property law harmonization
and the corresponding reduction in national economic self-sufficiency.
Quality (philosophy)
A quality is an attribute or a property. Attributes are ascribable, by a subject, whereas properties are possessible. In contemporary philosophy, the idea of qualities and especially how to distinguish certain kinds of qualities from one another remains controversial.-Background:Aristotle analyzed...
of being self-sufficient
Self-sufficiency
Self-sufficiency refers to the state of not requiring any outside aid, support, or interaction, for survival; it is therefore a type of personal or collective autonomy...
. Usually the term is applied to political states or their economic policies. Autarky exists whenever an entity can survive or continue its activities without external assistance. Autarky is not necessarily economic. For example, a military autarky would be a state that could defend itself without help from another country. Autarky can be said to be the policy of a state or other entity when it seeks to be self-sufficient as a whole, but also can be limited to a narrow field such as possession of a key raw material.
Etymology
The word "autarky" is from the , which means "self-sufficiency" (derived from αὐτο-, "self," and ἀρκέω, "to suffice"). The term is sometimes confused with autocracyAutocracy
An autocracy is a form of government in which one person is the supreme power within the state. It is derived from the Greek : and , and may be translated as "one who rules by himself". It is distinct from oligarchy and democracy...
/autarchy (Greek: αὐτoκρατία/αὐταρχία "government by single absolute ruler"). Libertarian
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
theorist Robert LeFevre
Robert LeFevre
Robert LeFevre was an American libertarian businessman, radio personality, and primary theorist of autarchism.-Early life:...
used "autarchy" and "autarchism
Autarchism
Autarchism is a political philosophy that upholds the principle of individual liberty, rejects compulsory government, and supports the elimination of government in favor of ruling oneself and no other...
" in the sense of self-government to describe his own political philosophy and to distinguish it from anarchism
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...
.
Modern examples
MercantilismMercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...
was a policy followed by empires, especially in the 17th and 18th centuries, forbidding or limiting trade outside the empire. In the 20th century, autarky as a policy goal was sought by Nazi Germany
Nazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...
in the 1930s, which maximized trade within its economic bloc and minimizing trade outside of it, particularly with the then world powers such as Great Britain
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, the Soviet Union
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
, and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, with which it expected to go to war and consequently could not rely upon. The economic bloc wherein trade was maximized comprised countries that were economically weak – namely, those in South America
South America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...
, the Balkans and eastern Europe
Eastern Europe
Eastern Europe is the eastern part of Europe. The term has widely disparate geopolitical, geographical, cultural and socioeconomic readings, which makes it highly context-dependent and even volatile, and there are "almost as many definitions of Eastern Europe as there are scholars of the region"...
(Yugoslavia
Yugoslavia
Yugoslavia refers to three political entities that existed successively on the western part of the Balkans during most of the 20th century....
, Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
and Hungary
Hungary
Hungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...
) – and had raw materials vital to Germany's growth. Trade with these countries, which was negotiated by then Minister of Economics Hjalmar Schacht
Hjalmar Schacht
Dr. Hjalmar Horace Greeley Schacht was a German economist, banker, liberal politician, and co-founder of the German Democratic Party. He served as the Currency Commissioner and President of the Reichsbank under the Weimar Republic...
, was based on the exchange of German manufactured produce directly for these materials rather than currency, allowing Schacht to barter without reliance on the strength of the Reichsmark. However, although food imports fell significantly between 1932 and 1937, Germany's rapid rearmament policy after 1935 proved contradictory to the Nazi Party autarkic ambitions and imports of raw materials rose by 10% over the same period.
Today, complete economic autarkies are rare. A possible example of a current autarky is North Korea
North Korea
The Democratic People’s Republic of Korea , , is a country in East Asia, occupying the northern half of the Korean Peninsula. Its capital and largest city is Pyongyang. The Korean Demilitarized Zone serves as the buffer zone between North Korea and South Korea...
, based on the government ideology of Juche
Juche
Juche or Chuch'e is a Korean word usually translated as "self-reliance." In the Democratic People's Republic of Korea , "Juche" refers specifically to a political thesis of Kim Il-sung, the Juche Idea, that identifies the Korean masses as the masters of the country's development...
(self-sufficiency
Self-sufficiency
Self-sufficiency refers to the state of not requiring any outside aid, support, or interaction, for survival; it is therefore a type of personal or collective autonomy...
), which is concerned with maintaining its domestic localized economy in the face of its isolation. However, even North Korea has extensive trade with the Russian Federation, the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, Syria
Syria
Syria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the West, Turkey to the north, Iraq to the east, Jordan to the south, and Israel to the southwest....
, Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
, Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
, and many countries in Europe and Africa. Bhutan
Bhutan
Bhutan , officially the Kingdom of Bhutan, is a landlocked state in South Asia, located at the eastern end of the Himalayas and bordered to the south, east and west by the Republic of India and to the north by the People's Republic of China...
, seeking to preserve an economic and cultural system centered around the dzong, has until recently maintained an effective economic embargo against the outside world, and has been described as an autarky. With the introduction of roads and electricity, however, the kingdom has entered trade relations as its citizens seek modern manufactured goods.
Historical examples
- AfghanistanAfghanistanAfghanistan , officially the Islamic Republic of Afghanistan, is a landlocked country located in the centre of Asia, forming South Asia, Central Asia and the Middle East. With a population of about 29 million, it has an area of , making it the 42nd most populous and 41st largest nation in the world...
under the Taliban, from 1996-2001. - AlbaniaAlbaniaAlbania , officially known as the Republic of Albania , is a country in Southeastern Europe, in the Balkans region. It is bordered by Montenegro to the northwest, Kosovo to the northeast, the Republic of Macedonia to the east and Greece to the south and southeast. It has a coast on the Adriatic Sea...
became a near-autarky in 1976, when Communist Party leader Enver HoxhaEnver HoxhaEnver Halil Hoxha was a Marxist–Leninist revolutionary andthe leader of Albania from the end of World War II until his death in 1985, as the First Secretary of the Party of Labour of Albania...
instituted a policy of what he termed "self-reliance". Outside trade increased after Hoxha's death in 1985, though it remained severely restricted until 1991. - Austria-HungaryAustria-HungaryAustria-Hungary , more formally known as the Kingdoms and Lands Represented in the Imperial Council and the Lands of the Holy Hungarian Crown of Saint Stephen, was a constitutional monarchic union between the crowns of the Austrian Empire and the Kingdom of Hungary in...
(1867–1918) was an exclusive economic and monetary unionEconomic and monetary unionAn economic and monetary union is a type of trade bloc which is composed of an economic union with a monetary union. It is to be distinguished from a mere monetary union , which does not involve a common market. This is the fifth stage of economic integration...
with a population of more than 50 million people. It was independent of the world market, thus autarkic. - Burma followed a policy of autarky known as the Burmese Way to SocialismBurmese Way to SocialismThe Burmese Way to Socialism refers to the ideology of the Socialist regime in Burma, from 1962 to 1988, when the 1962 coup d'état was led by Ne Win and the military to remove U Nu from power...
under dictator Ne WinNe WinNe Win was Burmese a politician and military commander. He was Prime Minister of Burma from 1958 to 1960 and 1962 to 1974 and also head of state from 1962 to 1981...
, who ruled the country from 1962 to 1988. - CambodiaCambodiaCambodia , officially known as the Kingdom of Cambodia, is a country located in the southern portion of the Indochina Peninsula in Southeast Asia...
under the Khmer RougeKhmer RougeThe Khmer Rouge literally translated as Red Cambodians was the name given to the followers of the Communist Party of Kampuchea, who were the ruling party in Cambodia from 1975 to 1979, led by Pol Pot, Nuon Chea, Ieng Sary, Son Sen and Khieu Samphan...
, 1975-1979. - GuyanaGuyanaGuyana , officially the Co-operative Republic of Guyana, previously the colony of British Guiana, is a sovereign state on the northern coast of South America that is culturally part of the Anglophone Caribbean. Guyana was a former colony of the Dutch and of the British...
under Forbes BurnhamForbes BurnhamLinden Forbes Sampson Burnham was the leader of Guyana from 1964 until his death, first as Premier from 1964 to 1966, then as the Prime Minister from 1966 to 1980 and finally as President from 1980 to 1985....
's PNCPeople's National CongressThe People's National Congress is a socialist political party in Guyana led by Robert Corbin. The party currently holds 22 of the 65 seats in the National Assembly.-History:...
dictatorship, from 1970-1985 - IndiaIndiaIndia , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
had a policy of near-autarky that began after its establishment as an independent state, around 1950, and ended in 1991. - ItalyItalyItaly , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Benito MussoliniBenito MussoliniBenito Amilcare Andrea Mussolini was an Italian politician who led the National Fascist Party and is credited with being one of the key figures in the creation of Fascism....
claimed to be an autarky, especially after the 1935 invasion of Abyssinia and subsequent trade embargoes. However, it still conducted trade with GermanyGermanyGermany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
and elsewhere. - JapanJapanJapan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
was partially an autarky during the era known as the "Edo periodEdo periodThe , or , is a division of Japanese history which was ruled by the shoguns of the Tokugawa family, running from 1603 to 1868. The political entity of this period was the Tokugawa shogunate....
", prior to its opening to the west in the 1850s, as part of its policy of sakokuSakokuwas the foreign relations policy of Japan under which no foreigner could enter nor could any Japanese leave the country on penalty of death. The policy was enacted by the Tokugawa shogunate under Tokugawa Iemitsu through a number of edicts and policies from 1633–39 and remained in effect until...
. There was a moderate amount of trade with ChinaChinaChinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
and KoreaKoreaKorea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...
; trade with all other countries was confined to a single port on the island of DejimaDejimawas a small fan-shaped artificial island built in the bay of Nagasaki in 1634. This island, which was formed by digging a canal through a small peninsula, remained as the single place of direct trade and exchange between Japan and the outside world during the Edo period. Dejima was built to...
. - North KoreaNorth KoreaThe Democratic People’s Republic of Korea , , is a country in East Asia, occupying the northern half of the Korean Peninsula. Its capital and largest city is Pyongyang. The Korean Demilitarized Zone serves as the buffer zone between North Korea and South Korea...
's official state ideology, JucheJucheJuche or Chuch'e is a Korean word usually translated as "self-reliance." In the Democratic People's Republic of Korea , "Juche" refers specifically to a political thesis of Kim Il-sung, the Juche Idea, that identifies the Korean masses as the masters of the country's development...
, is based heavily in autarky. - RomaniaRomaniaRomania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
in the 1980s Nicolae CeausescuNicolae CeausescuNicolae Ceaușescu was a Romanian Communist politician. He was General Secretary of the Romanian Communist Party from 1965 to 1989, and as such was the country's second and last Communist leader...
proposed such goals as paying the entire foreign debt and increasing the number of items produced in the country and their quality. The aim of these policies was to reduce dependency on foreign imports, as the relationship of Ceausescu with both Western and Communist leaders was worsening. - SpainSpainSpain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, under dictator Francisco FrancoFrancisco FrancoFrancisco Franco y Bahamonde was a Spanish general, dictator and head of state of Spain from October 1936 , and de facto regent of the nominally restored Kingdom of Spain from 1947 until his death in November, 1975...
, was an autarky from 1939 until Franco allowed outside trade again in 1959, coinciding with the beginning of the "Spanish miracleSpanish miracleThe Spanish miracle was the name given to a broadly based economic boom in Spain from 1959 to 1974. The international oil and stagflation crises of the 1970s ended the boom.- The pre-boom situation :...
". - The United StatesUnited StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
, while still emerging from the American RevolutionAmerican RevolutionThe American Revolution was the political upheaval during the last half of the 18th century in which thirteen colonies in North America joined together to break free from the British Empire, combining to become the United States of America...
and wary of the economic and military might of Great BritainKingdom of Great BritainThe former Kingdom of Great Britain, sometimes described as the 'United Kingdom of Great Britain', That the Two Kingdoms of Scotland and England, shall upon the 1st May next ensuing the date hereof, and forever after, be United into One Kingdom by the Name of GREAT BRITAIN. was a sovereign...
, came close to complete autarky in 1808 when President JeffersonThomas JeffersonThomas Jefferson was the principal author of the United States Declaration of Independence and the Statute of Virginia for Religious Freedom , the third President of the United States and founder of the University of Virginia...
declared a self-imposed embargoEmbargo Act of 1807The Embargo Act of 1807 and the subsequent Nonintercourse Acts were American laws restricting American ships from engaging in foreign trade between the years of 1807 and 1812. The Acts were diplomatic responses by presidents Thomas Jefferson and James Madison designed to protect American interests...
on international shipping. The embargo lasted from December 1807 to March 1809. - In the Dominican RepublicDominican RepublicThe Dominican Republic is a nation on the island of La Hispaniola, part of the Greater Antilles archipelago in the Caribbean region. The western third of the island is occupied by the nation of Haiti, making Hispaniola one of two Caribbean islands that are shared by two countries...
, the rural peasants, escaped slaves, and freed slaves that lived in the sparsely populated woodland interior of the island nation between the 1600s and early 1900s. The weak Dominican government had no control on these autonomous subsistence agriculture based communities.
Economic dilemmas of an autarky
A self-sufficient economy can experience diseconomies of scaleDiseconomies of scale
Diseconomies of scale are the forces that cause larger firms and governments to produce goods and services at increased per-unit costs. The concept is less well known than economies of scale.-Communication costs:...
in the public and private business sectors. It is evident that several nations in the world do not have direct access to certain raw materials such as oil, coal, gas, wheat or fabrics such as wool due to geographical boundaries including climate, location, land size or population numbers.
Therefore the production of scarce resources becomes relatively expensive and a large cost to consumers and firms that need to pay a higher price for these goods and services.
The globalisation process has reinforced the concept of comparative advantage
Comparative advantage
In economics, the law of comparative advantage says that two countries will both gain from trade if, in the absence of trade, they have different relative costs for producing the same goods...
as regions of economic exchange become more integrated across the world, due in part to the rising influence of transnational economic bodies such as the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
, the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
and trade agreements between nations with differing degrees of industrialization such as the Central American Free Trade Agreement, North American Free Trade Agreement
North American Free Trade Agreement
The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...
, the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, KORUS FTA and AFTA, beginning in the last quarter of the 20th Century. Cheaper labor, commodity and compliance costs for multinational firms, access of corporations to raw materials and consumer markets located in previously autonomous regions, and the establishment of zero tax export zones
Free trade zone
A free trade zone or export processing zone , also called foreign-trade zone, formerly free port is an area within which goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of the customs authorities...
in developing nations are major motivational factors influencing the growth of international trade and property law harmonization
Harmonisation of law
Harmonisation of law comes from the root word harmonise which under the OED means “make or form a pleasing or consistent whole”. In the case of harmonisation of law, the aim is to make a consistent whole of law...
and the corresponding reduction in national economic self-sufficiency.
External links
- Autarky in Spain - Article discussing Autarky under the FrancoFrancisco FrancoFrancisco Franco y Bahamonde was a Spanish general, dictator and head of state of Spain from October 1936 , and de facto regent of the nominally restored Kingdom of Spain from 1947 until his death in November, 1975...
dictatorship.