What is Autarky

Autarky is a nation or entity that is self-reliant, or an economic system of self-sufficiency and limited trade. Autarky is a political/economic term coming from the Greek—autos, meaning "self" and arkein, meaning "to be strong enough, to suffice"—meaning self-sufficiency. 


Autarky is a state of independence, achieved when an entity, such as a political state, is self-sufficient and exists without external aid. A country is considered to be in a state of complete autarky if it has a closed economy, one that is functional without partaking in any international trade.

Autarky is an extreme form of economic nationalism and protectionism. Autarky was first questioned by economist Adam Smith, and then David Ricardo. 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. Ricardo amended that slightly, saying that countries should also produce goods in which they have a comparative advantage. Free trade and globalization have been seen as superior economic courses of action, generally speaking, and so, autarky involving the elimination of foreign trade has proved unsuccessful, and has become more of a utopian ideal.

Historically, autarkic policies have been deployed to different extents. Encyclopedia Britannica notes that western European countries deployed them under mercantilist policies from the 16th to the 18th century, Nazi Germany used a more extensive form. North Korea is a contemporary example.