what is autarky 
autarky refers to a nation that operates in a state of self reliance nations that follow a policy of autarky are characterized by self sufficiency and limited trade with global partners the definition of autarky comes from the greek autos meaning self and arkein meaning to ward off and to be strong enough to suffice a fully autarkic nation would be a closed economy and lacking any sources of external support trade or aid in practice however no modern nation has achieved this level of autarky even when subjected to punishing sanctions this is because the global supply chain has made true economic isolation difficult so any policy of autarky is a matter of degrees rather than a complete isolation understanding autarkyautarky can be thought of as an extreme form of economic nationalism and protectionism the motivation behind a policy of autarky is usually a combination of securing the supply of important goods and a desire to reduce the dependence on other nations in general depending on the type of political structure in a nation the goal of reducing dependence on outside nations may be related to reducing the influence of competing political and economic systems at various points in history however autarky has been proposed by groups all across the political spectrum when framed in terms of keeping domestic spending at home or stopping the transfer of wealth to bad political actors autarky touches populist themes and appears to make practical sense in practice however autarky has economic downsides that are not immediately apparent in the populist arguments autarky was first questioned by economist adam smith and then david ricardo 1 smith suggested that countries should engage in free trade and specialize in goods they have an absolute advantage in producing in order to generate more wealth this is one of the core arguments smith made in favor of free trade in the wealth of nations ricardo amended this argument slightly saying that countries should also produce goods in which they have a comparative advantage by leveraging comparative advantages countries are able to work together to create more wealth in the global system of trade put another way opting out of global trade in favor of doing it all domestically has a high opportunity cost for nations just as it does for individuals for example a family preoccupied with sewing their own clothes building their own furniture and growing their own food will necessarily have less time to work outside the home for wages this will likely result in less income for the household and less workers for nearby employers and ultimately a smaller economy due to the high degree of self sufficiency being practiced this is true on a global scale as well real world examples of autarkyhistorically autarkic policies have been deployed to different extents western european countries deployed them under mercantilist policies from the 16th to the 18th century this spurred economists like smith ricardo and frederic bastiat to refine free market and free trade philosophies as counter arguments nazi germany also implemented a form or autarky to ensure the strategic supply needed for its war efforts today north korea stands as the main example of a policy of autarky north korea s economic isolation is a mixture of intentional self reliance to reduce international political influence and imposed self reliance due to being cut out of international trade through sanctions one of the most extreme examples of contemporary autarky is north korea which relies on the concept of juche often translated as self reliance autarky and the autarkic pricea related term autarky price or autarkic price refers to the cost of a good in an autarkic state the cost of producing in a closed economy must be covered by the price charged for the good if the cost is higher relative to other nations then the autarky price is a dead loss for that national economy the autarkic price is sometimes used as an economic variable when roughly calculating where a nation s comparative advantages are in practice however comparative advantages are discovered through market mechanisms rather than an economic model 