Autarky

Autarky: An Introduction

Autarky, quite simply, means self-sufficiency, usually through extensive development of home industry.

Due to the dominance of what is referred to as the "free trade ideology" or "liberal capitalism" that sees its roots in Adam Smith, the author of the well-known The Wealth of Nations, the 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 is therefore irrational. There are also some arguments that go further and say that autarky thus is the government creating artificial monopolies through government intervention for the benefit of certain private corporations.

Much of this stems from various assumptions held by orthodox economists as well as a misunderstanding of the 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 the logic and purpose of autarky.

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, the individual comes before the nation, with the nation being only a collection of individuals, therefore what is good for the individual must be good for the nation. To Adam Smith, since the individual is motivated by economic self-interest and the pursuit of cheaper goods, therefore logically the entire nation, being merely a collection of individuals, is better off if it leaves the 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 the nation is but the collective of individuals that reside in it, therefore it stands to reason that under this logic, the economic must come before the political.

The Logic of the Economic Nationalist

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

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

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

The Human Body Analogy

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

Take the human body as analogous to the nation. It can be argued that the human body is not just the sum of all of its organs. This is because the way in which the organs are arranged and organized, the way each organ depends on the others and vice versa, the way each organ serves a specialized role that is in turn for the purpose of the 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, the purpose of autarky cannot be fully economic in nature; there are other concerns. The economic, from the nationalist point of view, is not an end in itself, but a means to certain political ends. Therefore, to the nationalist, the economic is always subservient to the political; the political must come before the economic and not the other way around, as outlined in this section of this article.

The Purpose and Advantages of Autarky

By understanding the nature of nationalist concerns, the purpose of autarky is easier to understand. The political requirements of the nation thus come first. The other thing that is to be understood about autarky is that to its advocates, the 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 the most and thus act accordingly. When these advantages of autarky are considered, coupled with the understanding that nationalists seek certain political goals that put the nation first, autarky, contrary to common misconception, is completely rational.

Also, because autarky insulates the essential production of a nation from political conflicts, autarky thus ensures the stability of the economic well-being of the nation’s citizens, for essential products are produced within the political union called the 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 the goals of autarky are not entirely economic in nature, and the economic to a nationalist is a means to an end rather than an end in itself. Here, the stability of the well-being of the nation’s citizens are prioritized over individual cost of purchase.

Finally, in order to pay for imported goods, a nation needs to generate the 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 the development of the productive power of the nation, ensures that a nation will always have the wealth needed when the nation is engaging in trade with other nations.

Conclusion

Autarky, contrary to somewhat common misconception, is not particularly irrational. Many misconceptions about autarky stem from the 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.