In this day and age, could a nation that is well-endowed with natural resources - let’s take Australia as an example - voluntarily disengage from the rest of the world and survive, or even raise its standard of living?
Say Canberra decided to halt all imports and exports and managed to convince its population to do without certain imported luxuries and restrict overseas travel to a bare minimum - i.e. all holiday and trade was undertaken domestically - could the nation stand on its own two feet?
A nation could certainly survive, hundreds of years ago there was very little international commerce and people seemed to get by. However, keeping the same or better standard of living would be trickier.
If they were seperate from the rest of the world, it would be hard to judge their wealth as their currency and goods would be different from everywhere else’s. They might also appear to the outside to be behind - “what, you don’t have iPods? How backward.”. However, they’d have oPids, or some other equivalent.
Considering that a large enough country can be considered a “world”, I see no reason why it’s not possible for a country with the right resources to secede and do better than the rest of us… if they took all of their resources with them we might end up scuppered. As an intellectual exercise, there’s no reason why it couldn’t be done. I can’t think of an existing country that could manage it though.
Australia has relatively high levels of both imports and exports, and also has a relatively high portion of its population living outside the country (an estimated 1 million out of a total of 20 million). People could survive without overseas trade, but it woud not just be a matter of doing “without certain imported luxuries”: a lot of essentials are imported to Australia. It would be prwetty certain that the standard of living would go down, with a loss of income from exports, and a loss of imported goods until local industries could be started up againn – and even then, people would be paying more for local products thgan they would for equivalent imports.
The US would be a better example: foreign trade is a smaller part of GDP, and it’s more self-sufficient. But again, I doubt if it would be better off.
Let’s see… no electronics or gasolene…
They could survive. I very much doubt they could maintain their standard of living, let alone improve it…depending on what we mean by standard of living of course. If we mean having a thriving industrial and modern society, then no…no one country could maintain that on their own. If we mean going back to the earth, maybe going back to a lower level of technology (say going back to 19th century technology and a slower paced life style), then they could probably maintain that.
Take your example. How much oil does Austrailia have? I have no idea, they may even be a net producer…but how long could they maintain that? Whats their tech base? Even if its high, I’m sure they import a lot of either hardware or software from the outside…what happens when that goes away?
The US of course is in even worse shape…we have fulling integrated our economy and our industry with the rest of the world. Simply put, there is no going back for us. Europe is pretty much in the same boat…even more so because of their lack of resources like oil (depending on where you draw the line for ‘Europe’ of course).
More likely they would have NOpods…I don’t see how they would make them and all the other myriad things needed for a truely modern life. I think it more likely that a modern nation trying to isolate itself from the world would go back to an earlier era of sustainable technology…19th century or even 18th century. Its more easy to sustain an agrarian society with lower levels of technology if you isolate yourself than it would be to attempt to keep up with the internation Jones’s all by yourself.
-XT
Without global exchange markets or imports as references, “cheap” and “expensive” would be relative to like-for-like goods and services within our theoretical loner nation only. It would be impossible to compare with similar commodities elsewhere.
With the amount of technical know-how floating around first-world workforces surely some approximation could be mass-produced. Granted a global market would not exist to offer massive sales but neither would competitors.
Maybe somewhere like Australia would not have the population to support such ventures but what if we took somewhere with a population around the 100 million mark?
If a country like Australia cut itself off from world trade, its standard of living would crash. And not by a little bit, but by a lot.
Australia, like other countries, is very good at making some goods and services, and poor at others. So it focuses on what it has a comparative advantage at doing, and sells its products to people who are good at other things, to the benefit of both. Without that trade, Australia could simply not make the wide array of goods that it enjoys today with anything approaching the economic efficiency it has. Is Australia going to write all its own software? Build its own ships? Make its own semiconductors? Create a large aircraft industry? Make all the heavy equipment for building and maintaining the infrastructure?
We live in a global economy. That fact is a large part of why we are so wealthy today. You cannot end global trade without destroying our economies.
Assuming it has the needed resources, as per the OP, why not?
It may take a while, a time when certain products would become scarce, but what would stop an eventual return to today’s standards?
Economies of scale.
Lets say I am writing a piece of software. Its going to cost me a good deal more money to write the software than it is to copy and distribute it. In otherwords it may cost me $100,000,000 to develope the software and $100 per copy to distribute it. Lets say 1 out of every 100 people buy my software in my market. Now if my market is the whole world the initial cost to write the software is divided across 60,000,000 people who purchased my software. Now if my market was only Australia that is only 200,000 copies. I now have to charge each individule 300 times more for that software to recoop my initial investment. Multiply this effect for each product throughout the economy and there is no way anyone will be able to afford anything.
I understand how economies of scale work.
Australia has all the computer programs it needs for today’s operations, which would not suddenly disappear if it disengaged, and while its ability to write new software would be much dimished, prosperity and standard of life doesn’t rely solely on ever-more elaborate computer programs.
Well, the closest thing we’ve got to a “disengaged” country is probably North Korea. And based on reports of severe famine, they really haven’t been making a go at it.
Next best example, maybe, would be China in the 60’s and 70’s (and I’m treading on shaky ground here because I haven’t studied the history very closely). But before Nixon went to China, they were pretty much isolated – at odds with Russia and the US. Until trade was regularized, I think China’s economy was pretty stagnant.
Finally, you have Japan in the 19th Century. They’d pretty much closed themself off from diplomatic relations with anyone for 200 years until Perry steamed into Edo harbor with four ships. Those ships with their advanced weapons and powerplants profoundly shocked the Japanese who had previously considered themselves protected by the ocean from outside influences. After trade was introduced, Japan rapidly changed from mostly agricultural to almost aggressively industrial.
So, history indicates that if you disengage, at best your economy becomes stagnant. At worst, you fall so far behind technologically that you put yourself in danger. That’s not a definitive answer – it’s possible that a very large country with a vibrant internal economy, many resources, and aggressive research programs could make a go of it. But I’m not sure why you’d want to run the experiment.