Weekend Economists' Demeter Film Award Reveal January 23-25, 2015

[Demeter]

34. Vocabulary Review time: AUTARKY

au·tar·ky
ˈôˌtärkē/
noun
noun: autarky; noun: autarchy

economic independence or self-sufficiency.
a country, state, or society that is economically independent.
plural noun: autarkies; plural noun: autarchies

Origin


early 17th century: from Greek autarkeia, from autarkēs ‘self-sufficiency,’ from autos ‘self’ + arkein ‘suffice.’


It's a word that came into use just before WWII.

Autarky is the quality of being self-sufficient. Usually the term is applied to political states or their economic systems. Autarky exists whenever an entity can survive or continue its activities without external assistance or international trade. If a self-sufficient economy also refuses all trade with the outside world then it is called a closed economy.

Autarky is not necessarily an economic phenomenon; for example, a military autarky would be a state that could defend itself without help from another country, or could manufacture all of its weapons without any imports from the outside world.

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. For example, many countries have a policy of autarky with respect to foodstuffs and water for national security reasons.

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 1930s, autarky as a policy goal was sought by Nazi Germany, which maximized trade within its economic bloc and minimized external trade, 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 attempt at 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. North Korea has also had to import food during the 1990s due to widespread famine.

Bhutan, seeking to preserve a manorialist economic and cultural system centered around the dzong, had until the 1960s 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 to 2001.
  
  
• Albania became a near-autarky in 1976, when Communist Party leader Enver Hoxha 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.
  
  
• 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.
  
  
• Classical Greece idealized economic self-sufficiency at the level of oikos and city-state. This ideal broke down over time, and was redundant by the Hellenistic period.
  
  
• Nazi Germany under Adolf Hitler attempted to end international trade and considered economic self-sufficiency to be ideal. However, tasked with establishing full autarky in Germany as part of the Four Year Plan, (beginning in 1936) Hermann Göring failed to close the German economy.
  
  
• Guyana under Forbes Burnham's PNC dictatorship, from 1970 to 1985
  
  
• India had a policy of near-autarky that began after its establishment as an independent state, around 1950; it increased until 1980 and ended in 1991 due to imminent bankruptcy.
  
  
• Italy, Benito Mussolini claimed to be an autarky,[8] 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 somewhat based on autarky, though North Korea is not a genuine autarky as it conducts principles of trade with a few nations, as well as benefits on Chinese capital and trade.
  
  
• Romania in the 1980s. Nicolae Ceaușescu 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 Ceaușescu with both Western and Communist leaders was worsening.
  
  
• South Africa was a partial autarky during the later Apartheid era, when the country faced ever increasing economic sanctions from the international community, including an increasing oil embargo that motivated the state to embark on a successful coal-to-oil project and also establish its own military industries, including the creation of its own atomic bomb.
  
  
• 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.
  
  
• 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.
  
  
• 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.