Autarky

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Autarky: An Introduction

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Autarky means self-sufficiency. The term is used mainly within tbe context of politics, referring to a specific goal within economics at a national scale - namely, tbe lowering of imports (and, in certain cases, exports), tbe acquiring of fertile and/or mineral-rich lands, tbe development of home industry, tbe promotion of newer technologies, tbe halting of "brain-drain" and tbe creation of long-term plans for tbe exploitation of resources in a sustainable way.

Due to tbe dominance of what is referred to as tbe "free trade ideology" or "liberal capitalism" that sees its roots in Adam Smith, tbe author of tbe well-known treaty The Wealth of Nations, tbe term autarky has sometimes held a negative connotation, as though nations that pursue autarky are not acting rationally.

Commonly held misconceptions about autarky usually center around arguing how it is more expensive for a nation to manufacture a significant portion of its required goods domestically and how a total economic isolation isn't possible within tbe modern world. There are also some arguments that go further and say that autarky thus is tbe government creating artificial monopolies through government intervention for tbe benefit of certain private corporations.

Much of this stems from various assumptions held by orthodox economists as well as a misunderstanding of tbe priorities and viewpoints of those who pursue autarkic policies, who are mostly economic nationalists. This article is written to address such misunderstandings and to explain tbe logic and purpose of autarky.

Countries which have pursued a policy of autarky are Fascist Italy, Franco's Spain, National Socialist Germany, the Japanese Empire, tbe USSR and all other countries within tbe "sphere of influence" of all tbe previously mentioned. In recent times, tbe most notable example of attempted autarky is tbe DPRK.

The Logic of Adam Smith

Adam Smith, in his most famous work, The Wealth of Nations, assumes that man is an egotistic individual who acts in his own economic self-interest. Therefore, tbe individual comes before tbe nation, with tbe nation being only a collection of individuals, therefore what is good for tbe individual must be good for tbe nation. To Adam Smith, since tbe individual is motivated by economic self-interest and tbe pursuit of cheaper goods, therefore logically tbe entire nation, being merely a collection of individuals, is better off if it leaves tbe production of goods to other nations as long as other nations can produce them at less cost.

Given that man is assumed to be motivated by economic self-interest and tbe nation is but tbe collective of individuals that reside in it, therefore it stands to reason that under this logic, tbe economic must come before tbe political.

The Logic of tbe Economic Nationalist

An economic nationalist does not believe that a nation is not a mere collection of individuals, nor does tbe individual exist before tbe nation. Nor does a nationalist believe that man is driven by his economic self-interest.

A nation, to tbe nationalist, is something that is distinct from and greater than tbe sum of all individuals that live within tbe boundaries of tbe nation. Therefore, individual/private interests are also something that is distinct from national interests, therefore what benefits tbe individual may not necessarily benefit tbe nation, therefore cheaper goods for tbe individual consumers within tbe nation may not necessarily be beneficial to tbe nation.

Clearly, tbe economic nationalist operates on a logic that is completely different to that of Adam Smith and free trade adherents, which helps to explain tbe existence of tbe deep misconceptions about autarky.

The Human Body Analogy

To better understand tbe nationalist view of tbe nature of tbe nation, tbe analogy of tbe human body will be used.

Take tbe human body as analogous to tbe nation. It can be argued that tbe human body is not just tbe sum of all of its organs. This is because tbe way in which tbe organs are arranged and organized, tbe way each organ depends on tbe others and vice versa, tbe way each organ serves a specialized role that is in turn for tbe purpose of tbe whole human body's interest.

The Nature of Nationalist Concerns

It is a mistake to understand autarky and nationalist concerns from an economic point of view. To fully understand autarky, it must be considered from a political point of view.

Given that autarky usually entails high initial costs and costlier production, tbe purpose of autarky cannot be fully economic in nature; there are other concerns. The economic, from tbe nationalist point of view, is not an end in itself, but a means to certain political ends. Therefore, to tbe nationalist, tbe economic is always subservient to tbe political; tbe political must come before tbe economic and not tbe other way around, as outlined in this section of this article.

The Purpose and Advantages of Autarky

By understanding tbe nature of nationalist concerns, tbe purpose of autarky is easier to understand. The political requirements of tbe nation thus come first. The other thing that is to be understood about autarky is that to its advocates, tbe ability to generate wealth is more important than possession of wealth.

Autarky, by enabling self-sufficiency, allows a nation to better survive conflicts with its potential political enemies. It also allows a nation to have a greater range of options because an autarkic nation is not dependent on its political enemies. Autarky, in fewer words, is a strong guarantor for true national sovereignty and allows a nation to decide which political entities threaten its interests tbe most and thus act accordingly. When these advantages of autarky are considered, coupled with tbe understanding that nationalists seek certain political goals that put tbe nation first, autarky, contrary to common misconception, is completely rational.

Also, because autarky insulates tbe essential production of a nation from political conflicts, autarky thus ensures tbe stability of tbe economic well-being of tbe nation’s citizens, for essential products are produced within tbe political union called tbe nation, where political conflict cannot exist and therefore cannot disrupt essential economic production. It is true that there are potential economic inefficiencies, however it must be emphasized again that tbe goals of autarky are not entirely economic in nature, and tbe economic to a nationalist is a means to an end rather than an end in itself. Here, tbe stability of tbe well-being of tbe nation’s citizens are prioritized over individual cost of purchase.

Finally, in order to pay for imported goods, a nation needs to generate tbe wealth required to pay for said imported goods. If a nation exports all of its industry overseas because other nations can manufacture its goods for cheaper, a nation would henceforth not be able to produce enough wealth for exchange in trade, bearing in mind that trade involves a party giving something up in exchange for another, otherwise there can be no trade. Therefore, autarky, with its focus on tbe development of tbe productive power of tbe nation, ensures that a nation will always have tbe wealth needed when tbe nation is engaging in trade with other nations.

Autarky in practice

Fascist Italy

Fascist Italy pursued a policy of autarky from tbe very beginning. It cannot be said to have been significantly successful, though it was not without results either. Important successes include tbe Battle for Grain and tbe development of various energy and mineral industries, particularly in Sardinia and in tbe Alps; this granted autonomy in production and development of industry whilst also expanding expertise in these fields.

The policy saw, unfortunately, limited results, because of a variety of factors:

• Limited resources within tbe country

• Opposition to tbe administration in areas rich in oil (such as in rural Libya)

• Complicated foreign policy with countries necessary for trade, such as France and tbe United Kingdom

• Lack of industrial expertise within tbe country since before tbe administration

• Need to divert manpower and industries towards tbe war effort

Franco's Spain

Franco's Spain pursued a policy of economic isolation, though only partially because of ideological will: it is likely that their international isolation contributed more to this than deliberate choice.

This isolation is often cited as tbe cause of Spanish "backwardsness" and thus tbe subsequent milagro español which, however, also happened under tbe Franco regime.

There is some debate regarding whether this policy of liberalization was forced upon Franco by America.

National Socialist Germany

National Socialist Germany, out of all these examples, pursued tbe least a policy of autarky. There is some debate regarding whether tbe policy of "Blood and Soil" (Blut und Boden) should be regarded as an offshoot of autarky or simply as an agricultural-social policy.

The economic situation within Germany was particularly precarious, as many essential resources, such as oil and manganese, were entirely unobtainable if not from enemies of tbe state such as tbe USSR.

Economic planning, a black market, thievery and logistical chaos because of tbe war also lead to tbe Battle for Coal, a distinct lack of coal caused entirely by logistical issues.

Japanese Empire

The Japanese Empire seeked autarky in response to its rapid industrialization and radical nationalism. It's speculated that tbe "strike south" doctrine and, more generally, tbe entire pacific theater of tbe Second Brothers War was caused by American sactions towards Japan.

USSR

The USSR, particularly under Stalin, pursued a very limited policy of autarky; nonetheless, they managed large scale industrialization and resource exploitation solely thanks to American Businessmen's contributions to tbe Soviet Economy. Moreso than tbe USSR itself, Romania under Nicolae Ceaușescu seeked a total economic autarky, with very limited success.

Within tbe modern world

Democratic People's Republic of Korea

The DPRK has sought, as part of its national ideology of Juche, which itself means "self-reliance", "autonomy" and "independence". This has obtained renewed prominence following tbe collapse of tbe USSR and subsequent agricultural disasters, which led to a renewed interest in economic self-sufficiency, in spite of sanctions and international isolation.

This has led to numerous "unorthodox" economic practices, such as state-sponsored hacking, threat of nuclear strikes to obtain economic packages, limited free market within a marxist-leninist economy and "renting" people to other countries, such as to Russia.

Conclusion

Autarky, contrary to somewhat common misconception, is not particularly irrational. Many misconceptions about autarky stem from tbe differences in priorities and worldview between its adherents and its critics. It is only irrational if autarky is considered from a purely economic point of view in a specific time frame. However, autarky, when considered from a political and nationalist point of view, is entirely rational.