why there are no real closed economies today
the trend toward globalization in recent decades suggests that governments are becoming more open to participating in international trade closed economies are counterintuitive to modern economic theory which promotes the opening of domestic markets to international trade to capitalize on comparative advantages ideally to the benefit of all citizens by allocating labor and other resources to their most productive efficient operations companies and individuals can increase their wealth the theory maintains in addition according to the international organisation for economic co operation and development oecd relatively open economies grow faster than relatively closed ones and salaries and working conditions are generally better in companies that trade than in those that do not more prosperity and opportunity around the world also helps promote greater stability and security for everyone 1potential advantages aside maintaining a genuinely closed economy is difficult in modern society in part because raw materials play a vital role in everyday life and in the production of finished goods many countries that are powerhouses when it comes to manufacturing and exporting do not have all the necessary raw materials locally and have no choice but to import them for instance in 2023 according to world s top exports an independent research and educational website the five biggest importers of crude oil were 2the united states in fact is both an importer and an exporter of crude oil importing about 6 11 million barrels a day from other countries while at the same time exporting about 2 90 million barrels a day according to the u s energy information administration 3a more dramatic example now and in the future may be lithium a metal that has become integral to the production of the batteries that power electric vehicles the u s and many other industrialized nations have very limited lithium reserves and must rely on others for their supply in fact australia latin america and china collectively accounted for 98 of the world s lithium production in 2020 according to mckinsey co 4