← Autodidact Archive · Original Dissent · triskelion
Thread ID: 10945 | Posts: 2 | Started: 2003-11-05
2003-11-05 22:06 | User Profile
An earlier thread abou about economics and agrarianism which unfortunately has not gone anywhere prompted me to post this.
Louis de Bernieres Engines of Autarky
The word autarky, which comes from the Greek words meaning "self-sufficiency," is used to describe the policy of being economically independent of other nations by having no trade with them. Autarky has many theoretical benefits that make it an attractive policy for a state that is contemplating its alternatives. The key benefit of autarky is that it provides an immense measure of independence from other states, since trade necessarily creates dependency in a state, both on imports (for products not produced domestically) and on exports (for foreign markets). (1) Alexander Hamilton articulated this desire well when he said that the U.S. should be "independent of foreign nations for military and other essential supplies" so that it may be "least dependent" on the foreign policies of other states. But this benefit has to date proven to be nothing but a deception, damaging nations more than it helps them. In our own century, there are many examples of semi- and completely autarkic practices being adopted by nations, only to be abandoned later. There are also examples of nations that are actively autarkic even today, and we can examine the experience of one to get a more clear idea of what autarky entails.
In Asia, we find that North Korea, a Communist nation since 1945 (and one of the few remaining nations committed to Communism), has practiced a semi-autarkic trade policy for decades and shows no signs of giving it up any time soon. North Korea trades mainly with Communist and former Communist nations, but the level of trade is low, and the traded goods are mostly raw materials, where the gains of specialization are minimal (because there is not much room for specialization, due to the fact that producing raw materials is mostly digging and chopping, rather than processing).
Hard numbers on the North Korean economy are difficult to generate because the nation is sealed off from the rest of the world, but anecdotal evidence based on the experiences of the few who have had the opportunity to enter the country paints a bleak picture of a dreary, colorless daily life, one devoid of any material comfort. North Korea's self-imposed autarky has come at a very high price. Their gain, however, is their independence of action, as they have displayed in their recent negotiations with the West over nuclear development within the country. Aside from military action against North Korea, there is little any other nation can do to influence her behavior (2). North Korea cannot be threatened with being ostracized from a world community she does not belong to, nor can she be threatened with trade sanctions when she does not trade. World public opinion is meaningless to a nation that does not allow in any news from the outside world or any form of contact between her citizens and those of other countries. Self-sufficiency has some very real benefits, and North Korea is willing to pay the price to have those benefits.
These are benefits that every state would like to have; after all, having power is a natural desire of any organism that has to fend for itself, as states do. More independence of action means less vulnerability to the desires of other states, and thus more power for the independent state. Avenues of action and types of behavior that would be unthinkable in a world of interdependent states become viable options with autarky. Were it not for its high cost, many more states, if not all, would consider autarky a reasonable and beneficial policy. Should autarky ever become more affordable in terms of what must be sacrificed in order to practise it, we can expect it to become much more common than it is today. As it turns out, molecular nanotechnology may remove many of the reasons for trade on an international scale, and may even have the same effect on much lower levels. This would pave the way for a world of autarkic states, which would create problems and opportunities that have never existed before.
The prospect of molecular nanotechnology reshaping our world into a more dangerous, more hostile one is as real as it is unfortunate. But the effects that MNT has on the international scene may not be all bad; indeed, it may be the case that certain aspects of the technology's effect on human societal organization offer a chance to end the scourge of war, and pave the way for a perpetual peace.
Economies of (Small) Scale
Since the earliest stages of industrial revolution, the root of material progress has been the division of labor. This mode of human organization is simple in principle: it is a type of sharing of work, but more importantly it is a division of work into discrete functions that workers can specialize in. (3) By dividing up work into separate tasks, workers can do just one thing and thus have the chance to learn to do it extremely well. It is the result of this specialization that there are people who make beer all day, so we can buy beer that is much better than anything we can brew at home in our spare time. It is also the result of specialization that we can consult a librarian who knows more about books than any of his patrons, or that we can find a doctor who studies and thinks about nothing but one particular part of the body for his whole career.
The benefits of this specialization are numerous. For one thing, there is the benefit of having workers who know and can perform their particular task better than a generalist ever could, as in the examples above. There is also a benefit that comes from specialization called economies of scale. Economies of scale are the savings that result from having a particular task done by fewer groups, or fewer companies, or in fewer places. For instance, rather than ship the raw materials for bread to 10,000 households, and having bread baking in 10,000 ovens and being tended by 10,000 amateur bakers, it is much more efficient to ship the raw materials to one factory (savings in shipping costs), and having it bake in only a few very large ovens (saving the costs of building 10,000 smaller ovens) and having it watched over by a few professional bakers (saving the huge amounts of time and effort of 10,000 people learning how to bake bread.) Many tasks can be consolidated into only a few, eliminating redundant factories, machinery and labor, and resulting in cheaper bread. And on top of all that, as professional bakers do nothing but bake all day, they tend to bake better bread.
Better products for less cost are the natural result of specialization, provided there is a way to coordinate the activities of all these specialists (i.e., a market based on money must exist). Before specialization, this problem did not exist; one simply made what one wanted, or what the family or tribe or village wanted. The benefits of the division of labor become truly profound only when the group of workers trading their goods and services becomes very large; the larger the market, the greater the degree of specialization that becomes possible, and as specialization increases, so do its benefits. Products become better and cheaper (all else being equal) as market size increases. It is no coincidence that the dramatic increase in world living standards that followed the end of the Second World War was concurrent with the dramatic increase in international trade made possible by the liberal post-war trading regime; improved standards of living are the result of more trade, because more trade has meant a greater division of labor and thus better, cheaper products and services.
With such compelling benefits, it is no wonder that many societies around the world are organized on the principles of markets, and that most others are starting to adopt markets as a central organizing principle. Trade is a win-win situation, one of the few that exist in this world. But any economist will verify that there is "no free lunch," and international trade, the logical extreme of the division of labor, comes with a hefty price tag. It is a cost that is not immediately apparent as such from a purely economic viewpoint, but it is significant in terms of national strength. The cost is dependency on other nations, and it is becoming a significant problem today. The Ties that Bind
In the past, the cost of depending on a product from another country was not a high one. Commodities were the usual stuff of international trade: cotton, wheat, spices, furs. These were things that were normally available from other sources, so being dependent on a foreign product did not necessarily mean being dependent on any one country for supply of that product. But as global markets expand and specialization increases, it is becoming the case that many products are available from only one country, and in some case from only one company in that country. The risks of dependency are becoming much greater, especially because many of these products are high-technology goods, and as such they are hard to begin producing domestically should the need ever arise. Whole industries may be brought to their knees without access to a crucial part. (The computer industry, for example, would be crippled, at least in the short term, if Intel were suddenly unable to produce any of its popular microprocessors.) Many important weapons systems in the U.S. military, including fighter planes and missiles, will not work without certain chips produced in Japan.
For states, depending on products from overseas in an age of increasing specialization is a considerable risk. Dependency is the opposite of independence, and dependency on foreign goods means a loss of the ability to act in a completely independent fashion, and that situation goes against the most basic self-preservation instincts of states. The benefits of trade are high, but the costs of it are rising. Molecular nanotechnology may hold the key to having our cake and eating it too: having the benefits of trade (better products at lower prices) without the cost (dependency). (4)
A world of autarkic states would present, first of all, a problem of organization, as each state would be able to pursue independent courses of action, without having to bend to outside, non-military pressure. The reason that this will be a central problem is that the "soft power" we examined above will be less effective; this is because soft power is based on dependency (that is, there must be some necessary thing for one state to threaten to withhold from the other). An autarkic world will be a world without dependency. The reason "rogue states" such as Iraq and Libya can cause so much commotion in the world is that they are relatively unrestrained, due to their lack of integration into the larger, international system. For a more globally integrated state to pursue a reckless course of action is quite rare today; major states generally seek the consent of (or at least inform) other major players before making any important moves that would impact the world system (5). A world of autarkic states will also mean that dangerous behavior will become a more viable option for states (though not necessarily a more desirable one), and this will contribute to instability.
But even if interdependence should be pursued as a global policy by states that are seeking to preserve some vestige of the old order (perhaps for the sake of continuity or stability), the dependence that states may artificially foster will still not be a source of soft power. The reason for this is that there are two kinds of costs that can be imposed on a dependent state, and both must be real costs if soft power is to be effective, and MNT will render one of those costs negligible.
There is a short-term cost that a state will pay when it finds itself at the receiving end of an exercise of soft power. This short-term cost is the suffering experienced when a needed thing is withheld by another state. An example of this short-term cost would be the difficulty encountered by a state that is dependent on another nation for imports of a popular luxury vehicle when the producing nation stops exporting. This might appear to be the only cost of dependency, but there is another cost: the long-term cost. The long-term cost of dependency is the cost of changing either the domestic system or the international system in order to end the suffering. In the case of our luxury car importing nation, the long-term costs of ending its suffering might be the costs associated with forcing the producing nation to restart its exporting of cars, or of finding another source of cars, or (crucially) of building up a domestic luxury car industry. This last option is crucial because with an advanced molecular manufacturing base, building up domestic industries to replace whatever good one is dependent on is a low cost option. Dependency thus loses its real bite; any suffering that may be imposed through the use of soft power is at worst a temporary one, and therefore soft power is a chimera. And if soft power is less useful, then hard power, that is, the use of military force, will become relatively more useful. This only adds to the trend of an increasingly violent world that was examined earlier.
But a world of autarkic states may also mean a more peaceful world, if the true advantage of autarky is taken into account and acted upon; that advantage is the possibility of official isolationism , a state policy of avoiding entanglements (6) with other states and limiting contact as much as possible. In the same way that surfaces that have no contact will produce no friction, so may conflict between states be limited by limiting the contact between them. On to Designer Communities Back to Peace
Notes
(1) Autarky has another, often-overlooked, benefit; it is sometimes a way to deny access to a certain good to another state, when the autarkic state is the only source of that product. Thus, a technologically advanced state could practice autarky as a way of maintaining its technological lead. This is especially true of weapons technology. However, when the desire for lower domestic costs of products overrides this concern and drives a state to allow exporting, "the consequence has sometimes been to place technology and weaponry in the hands of potential enemies." (Defense & Dependence in a Global Economy, Vernon, Raymond and Kapstein, Ethan B., eds., Congressional Quarterly, Inc., 1992, p. 39) Witness the arming of Iraq prior to the Gulf War as evidence of this.
(2) There is one way to influence a nation as independent as North Korea without resorting to military means, and that is the "carrot" (i.e., offering something in return for a desired behavior, as opposed to withholding something already granted). One carrot might be financial aid, another might be access to an important technology. However, as we shall see later, with molecular nanotechnology, this carrot will cease to be as effective as it might be today.
(3) "The division of labour, ...so far as it can be introduced, occasions, in every art, a proportional increase of the productive powers of labour. The separation of different trades and employments from one another, seems to have taken place, in consequence of this advantage." (An Inquiry into the Nature and Causes of the Wealth of Nations, Smith, Adam, University of Chicago Press, 1976, p. 9).
(4) In this way, it may defeat the "autarky-efficiency dilemma," a situation in which greater autonomy can only be bought at the price of reduced efficiency in production. See Vernon and Kapstein, p. 23.
(5) And consider what happens when other states strongly oppose a particular action. When military force is not an attractive or appropriate course, trade sanctions are very common. In recent years the international community has punished South Africa for its policy of racial segregation. More recently, protest over French plans to test nuclear weapons in the South Pacific in 1995 came in the form of anti-French boycotts down to the private citizen level. Longshoremen in Denmark, for instance, refused to unload French goods in Danish harbors.
(6) Or "entangling alliances," as the first American President, George Washington, expressed it to his countrymen in his farewell speech.
2003-11-06 18:05 | User Profile
I'm at a lose to understand why so little attention is payed to economics here as the agarianism thread and this one show. The thruth is that if you wish to be taken seriously by the public you need to have a genuine alternative. Simply pretending that globalism can some how be removed from libertarianism is simply no alternative at all. Unfortunately, that's all that seems to come out of the paleo and racist scenes in the states.