Autarky

Not to be confused with Autarchy.

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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.

Etymology

The word "autarky" is from the Greek: αὐτάρκεια, which means "self-sufficiency" (derived from αὐτο-, "self," and ἀρκέω, "to suffice"). The term is sometimes confused with autocracy/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.

Modern examples

Mercantilism 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)^[1] – 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.^[2] 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.

Historical examples

• Afghanistan under the Taliban, from 1996-2001.
• Albania became a near-autarky in 1976, when Communist Party leader Enver Hoxha instituted a policy of what he termed "self-reliance".^[3] Outside trade increased after Hoxha's death in 1985, though it remained severely restricted until 1991.^[4]
• Austria-Hungary (1867–1918) was an exclusive economic and monetary union with a population of more than 50 million people. It was independent of the world market, thus autarkic.^[5]
• Burma followed a policy of autarky known as the Burmese Way to Socialism under dictator Ne Win, who ruled the country from 1962 to 1988.
• Cambodia under the Khmer Rouge, 1975-1979.
• Guyana under Forbes Burnham's PNC dictatorship, from 1970-1985
• India had a policy of near-autarky that began after its establishment as an independent state, around 1950, and ended in 1991.^[6]
• Italy, Benito Mussolini claimed to be an autarky,^[7] especially after the 1935 invasion of Abyssinia and subsequent trade embargoes. However, it still conducted trade with Germany and elsewhere.
• Japan was partially an autarky during the era known as the "Edo period", prior to its opening to the west in the 1850s, as part of its policy of sakoku. There was a moderate amount of trade with China and Korea; trade with all other countries was confined to a single port on the island of Dejima.
• North Korea's official state ideology, Juche, is based heavily in autarky.
• Romania in the 1980s Nicolae Ceausescu 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.^{[citation needed]}
• Spain, under dictator Francisco Franco, was an autarky from 1939 until Franco allowed outside trade again in 1959, coinciding with the beginning of the "Spanish miracle".^{[citation needed]}
• The United States, while still emerging from the American Revolution and wary of the economic and military might of Great Britain, came close to complete autarky in 1808 when President Jefferson declared a self-imposed embargo on international shipping. The embargo lasted from December 1807 to March 1809.^[8]
• In the Dominican Republic, 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 scale 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.

See also

• Integral Urban House

References

1. ^ D. Evans & J. Jenkins, Years of Weimar & the Third Reich, (London: Hodder & Stoughton Educational, 1999), 348-349.
2. ^ D. Evans & J. Jenkins, Years of Weimar & the Third Reich, 349
3. ^ http://www.country-data.com/cgi-bin/query/r-171.html
4. ^ http://www.country-data.com/cgi-bin/query/r-243.html
5. ^ Vide for the controversy of the role of the state: T. I. Berend and Gy. Ranki, "Az allam szerepe az europai 'periferia' XIX. szazadi gazdasagi fejlodesben." The Role of the State in the 19th Century Economic Development of the European "periphery." Valosag 21, no.3 (Budapest, 1978), pp. 1-11; L. Lengyel, "Kolcsonos tarsadalmi fuggoseg a XIX szazadi europai gazdasagi fejlodesben." (Socio-Economic Interdependence in the European Economic Development of the 19th Century.) Valosag 21, no.9 (Budapest, 1978), pp. 100-106
6. ^ http://www.pbs.org/wgbh/commandingheights/lo/countries/in/in_full.html
7. ^ http://www.westernmind.com/syllabus/syllabus20c/09_mussolini.html
8. ^ http://www.dartmouth.edu/~dirwin/Embargo.pdf (PDF file)

External links

• Autarky in Spain - Article discussing Autarky under the Franco dictatorship.