What does autarky refer to?

Autarky refers to a situation in which a country aims to be economically self-sufficient, avoiding reliance on international trade. In autarky, a nation seeks to produce all the goods and services it needs internally, depending minimally on imports or exports. This approach often stems from a desire to maintain independence and control over the economy, ensuring that national resources are utilized to meet domestic demand without outside influence.

This concept is significant in discussions about economic strategies, especially in terms of evaluating the pros and cons of self-sufficiency versus the benefits arising from trade, such as access to a wider variety of goods and the advantages of comparative advantage. Autarky can lead to inefficiencies and a lack of innovation since domestic producers may not face competition from abroad, which can stagnate progress and economic growth over time. Understanding autarky is crucial in grasping broader economic principles related to trade, globalization, and national policies aimed at self-reliance.