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  #1  
Old 02-15-2012, 01:32 PM
YogSosoth YogSosoth is offline
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Any major countries with a closed economic system?

The answer's probably no, so I would also like to know if there's a decent sized country as close to a closed economy as possible.

What I mean by a closed economy is an economy that can do just as well without having to import and export anything. The country can provide for all of its own needs from its own resources, either mining its own materials, farming its own food, or tapping its own fossil fuels.

I was thinking about this question because of the Greece situation. It looks like they're going to be kicked out of the EU and have to fall back on their old currency, which would be super inflated because they have a lot of debts and no money. If there's a country out there who can essentially close its borders, issue its own money, without an economic collapse, I would like to see how it works and what kind of effort it would take.

Suppose that Greece had something like this. They could leave the EU with no real damage. They can employ however many people they want and provide whatever wage they can sustain. How difficult would it be to change from an open economy that prospers through trade to one that's isolated, but not destitute? The only real closed economies I can think of is extreme cases like North Korea, or tiny countries who can barely enforce the rule of law. Those are not models to follow, but I wonder if its possible to do so just to protect oneself against the fluctuations of the global market
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  #2  
Old 02-15-2012, 02:08 PM
robert_columbia robert_columbia is offline
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I believe that North Korea WANTS to be this.
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  #3  
Old 02-15-2012, 02:11 PM
Sparky812 Sparky812 is offline
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Major countries, no.
Minor countries, no.
Small isolated villages, maybe.
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  #4  
Old 02-15-2012, 02:18 PM
Exapno Mapcase Exapno Mapcase is offline
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There can't be in a modern industrialized world because sources of major raw materials are not evenly divided.

Very large countries - the U.S., Russia, China, Canada, and perhaps Australia - could probably come close if they had to, although the prices of certain commodities would rise precipitously. Even so, almost everything about daily life would change. People would have to go back to farming and live closer to food sources and cut out much new technology. It's amazing how much modern tech requires rare earth metals, almost all of which currently come from China.

North Korea is supplied by China. If China stops supplying them it's cannibalism in a year.
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Old 02-15-2012, 02:23 PM
Ludovic Ludovic is offline
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The closest is probably the US. We have plenty of energy sources and minerals and are self-sufficient in food (to put it mildly). The only thing I can thinkg of that we are dependent on from the rest of the world is aluminum. We have rare earth metals, they're just not economically viable yet. And we are self-sufficient for most of our petroleum needs, and the rest could be made up for my artificial sources. (Until we run out of coal and natural gas, that is)
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Old 02-15-2012, 02:30 PM
dracoi dracoi is offline
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Quote:
Originally Posted by YogSosoth View Post
What I mean by a closed economy is an economy that can do just as well without having to import and export anything. The country can provide for all of its own needs from its own resources, either mining its own materials, farming its own food, or tapping its own fossil fuels.
Given your definition, if any society could meet that definition, it already would. There's an economic cost to importing - not only political and currency barriers, but the literal cost of transportation. We don't have international trade except when the benefits of the trade exceed the cost. So if a country could provide for all of its own needs "just as well" then it would already be doing so.

There are certainly some countries that could adapt with fewer drawbacks than others (as in, avoid complete collapse of civilization), but no country can do as well as they currently do.
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Old 02-15-2012, 02:41 PM
Chronos Chronos is offline
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The only thing I can thinkg of that we are dependent on from the rest of the world is aluminum.
No more than we are for rare earths. Aluminum ore is abundant everywhere; the lion's share of the cost of the metal is the energy needed to extract it from the ore. But I'm at a loss as to how we're self-sufficient on petroleum.
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Old 02-15-2012, 02:45 PM
Nava Nava is offline
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The term you're looking for is "autarky". M-w uses the spelling autarchy to mean both "economic self-sufficiency" and "absolute government (despotism/absolutism)", but prefers autarky for the economic meaning.

Last edited by Nava; 02-15-2012 at 02:48 PM..
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  #9  
Old 02-15-2012, 03:10 PM
t-bonham@scc.net t-bonham@scc.net is offline
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Originally Posted by YogSosoth View Post
TThe only real closed economies I can think of is extreme cases like North Korea,
I believe North Korea has a significant amount of trade with China, so they are not really a closed economy.
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  #10  
Old 02-15-2012, 03:16 PM
hogarth hogarth is offline
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Originally Posted by dracoi View Post
Given your definition, if any society could meet that definition, it already would. There's an economic cost to importing - not only political and currency barriers, but the literal cost of transportation. We don't have international trade except when the benefits of the trade exceed the cost. So if a country could provide for all of its own needs "just as well" then it would already be doing so.
Even if a country could be self-sufficient, there's still such a thing as comparative advantage. Although I agree that "just as well" is a tantalisingly vague term.
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  #11  
Old 02-15-2012, 03:31 PM
Fuzzy Dunlop Fuzzy Dunlop is offline
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Originally Posted by hogarth View Post
Even if a country could be self-sufficient, there's still such a thing as comparative advantage. Although I agree that "just as well" is a tantalisingly vague term.
Exactly. To tie the concept in to a real example that Chronos was coincidentally mentioning - The mere fact that the U.S. has the potential to produce domestic aluminum in no way implies that it's economically preferable to produce it rather than import it. We can't just identify one cost, transportation or other import costs, and conclude it's always bad to import. Other countries may have a much cheaper ability to produce aluminum that overcomes the incidental cost of importing.
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  #12  
Old 02-15-2012, 08:39 PM
Ludovic Ludovic is offline
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Originally Posted by Chronos View Post
No more than we are for rare earths. Aluminum ore is abundant everywhere; the lion's share of the cost of the metal is the energy needed to extract it from the ore. But I'm at a loss as to how we're self-sufficient on petroleum.
Of course there's aluminum ore everywhere, I'm just not aware of any industrialized process that even exists to claim most of its forms. (Which isn't to say that potentially industrial-scale processes don't exist, I'm just not aware of them. Feel free to point me to them as it would be interesting to know.)

With regards to petroleum, we are a lot closer than most countries in the world to being self-sufficient in it. We have abundant oil supplies and the worlds biggest fossil fuel supply from which we could potentially manufacture petroleum. We could be up and running tomorrow in a scale we might not with regards to aluminum, even if we had the energy we needed to extract it.

Of course our lifestyle would take a hit. Everyone's lifestyle would take a hit. I was just saying that we're the closest to being a closed economic system. Everyone else would do much worse.
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  #13  
Old 02-15-2012, 09:31 PM
jbaker jbaker is offline
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The closest thing to this that I can think of is Albania, which was radically self-sufficient in the 1970s and 1980s, although it did still have some trade with other countries. Of course, the country in consequence was poorer than most other European countries, so it was not a country that could do as well without imports and exports.
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  #14  
Old 02-15-2012, 10:29 PM
UDS UDS is offline
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Logically, big countries with lots of diverse resources and a large domestic consumer base are going to be best positioned to withstand the shock of losing all imports and all exports. So, the US, possibly Russia? China?

A small country with limited resources and not much diversity? There's not a chance that they'd survive the transition without a great drop in productivity, income and living standards - unless these things are already very low.
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Old 02-15-2012, 10:36 PM
elbows elbows is offline
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If you stretch, 'self sustaining' to include the ability to purchase for your needs then, doesn't a place like Singapore count? A small city state, it's true. But run their country with a surplus budget, and pretty much, always have. At the same time having to import drinking water, a problem they have since solved. It doesn't hurt that they have the third largest port in the world. But they enjoy a very western standard of living. Definitely a closed economy to my mind.
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  #16  
Old 02-15-2012, 10:45 PM
Nava Nava is offline
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They don't have to be large, they just have to be diverse and have enough of certain key products. A smaller country also means lower transportation costs and less people to organize. Many countries which nowadays get a lot of their food from abroad while exporting most of their own production (for example Costa Rica) would need to reorganize internally, but the potential to have a more-varied farming sector exists, and in fact their agriculture was much more varied before mass-transportation became as feasible as it is now. Spain survived its forced autarky period partly thanks to having some unusual resources that other countries were willing to pay for while calling us names, partly thanks to a few sympathetic countries willing to sell us basic necessities (Argentinian beef gets mentioned routinely), and partly because Madrid and Barcelona were about the only towns in the country where it was unusual for people to have vegetable gardens; the emphasis, both from the government and spontaneously achieved by people, was on growing as many different things as your land was able to support. The latifundist areas had it worse because they have worse land, but even there it was relatively common to have fruit trees and cereal growing in the same field at the same time.

Last edited by Nava; 02-15-2012 at 10:48 PM..
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  #17  
Old 02-15-2012, 10:58 PM
Terr Terr is online now
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Quote:
Originally Posted by Chronos View Post
No more than we are for rare earths. Aluminum ore is abundant everywhere; the lion's share of the cost of the metal is the energy needed to extract it from the ore. But I'm at a loss as to how we're self-sufficient on petroleum.
Domestic shale oil - enough for a few hundred years at production cost of ~$80/bbl last time I looked. Domestic coal-based synthetic fuel - enough for a few hundred years at production cost of $60-$70/bbl. Domestic natural gas-based synthetic fuel - enough for a few hundred years at fairly low production cost (I believe something like $20/bbl over the natural gas cost).

Obviously at large scales the cost should go down.

Last edited by Terr; 02-15-2012 at 10:59 PM..
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  #18  
Old 02-15-2012, 11:25 PM
Quartz Quartz is offline
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Might pre-invasion Tibet or Bhutan qualify?
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  #19  
Old 02-16-2012, 12:54 AM
UDS UDS is offline
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Originally Posted by elbows View Post
If you stretch, 'self sustaining' to include the ability to purchase for your needs then, doesn't a place like Singapore count? A small city state, it's true. But run their country with a surplus budget, and pretty much, always have. At the same time having to import drinking water, a problem they have since solved. It doesn't hurt that they have the third largest port in the world. But they enjoy a very western standard of living. Definitely a closed economy to my mind.
I think the question raised in the OP uses "self-sustaining" in a sense which excludes countries that are reliant on imports and foreign trade to sustain their standard of living.

Singapore may be financially viable, but it exists only because of foreign trade; it's pretty much the diametric opposite of the kind of "self-sustaining" that the OP asks about. Without foreign trade Singapore wouldn't just be poor; it wouldn't be there, except perhaps as a fishing village in the far south of a Malaysian province.
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  #20  
Old 02-16-2012, 04:40 AM
Postariti Postariti is offline
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So far as aluminum goes, there is a source of bauxite in the US, in a city helpfully named Bauxite. I don't know how much is left now, but according to Wikipedia, there was "a 1943 annual production of 6,000,000 tons of ore."
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  #21  
Old 02-16-2012, 05:44 PM
clairobscur clairobscur is offline
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Originally Posted by jbaker View Post
The closest thing to this that I can think of is Albania, which was radically self-sufficient in the 1970s and 1980s, although it did still have some trade with other countries. Of course, the country in consequence was poorer than most other European countries, so it was not a country that could do as well without imports and exports.


Albania was, roughly, the European North korea. It was self sufficient in the sense that Hodja had decided it would be, damn the consequences. It isn't and wasn't in any way "naturally" self-sufficient anymore than any random small country.

As for the OP, amongst western countries, it would be the USA who already exports and imports much less (in proportion of its GDP) than other industrialized nations. I've no clue how it would compare to large non western nations like China, Russia, India...
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  #22  
Old 02-17-2012, 12:32 AM
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Some tribes and villages have no outside contact:

http://en.wikipedia.org/wiki/Uncontacted_peoples

But no countries as far as I know though. Even countries who do not like to admit it have a lot of trade going on with at least one other country.
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  #23  
Old 02-17-2012, 05:58 AM
Xema Xema is offline
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Originally Posted by robert_columbia View Post
I believe that North Korea WANTS to be this.
Perhaps not, in view of trade with China (as Exapno M. notes) and evidence that they counterfeit US money.
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