<blockquote>
<p>Given these risks, would it be better to abolish trade completely and develop a principle of self-sufficiency, where a state will attempt to find any way to make and obtain its resources and products completely by itself if it is even remotely possible to do so?</p>
</blockquote>
<p>No it would not be better abolishing trade completely, if by better you are asking if countries would have higher material levels of welfare.</p>
<p>For most countries that would mean literally going back to dark ages as some small countries do not have resources to produce modern technologies (for example lithium for batteries is available only in few locations around the world). Big countries such as USA or Russia or China might not go all the way to stone age but the welfare standards would plunge by decades if not centuries and most modern comforts would not be widely accessible to public.</p>
<p>Even if we would allow trade in commodities that are not physically present in home country it would lead to major economic disaster.  People trade precisely because trade is beneficial. Carpenters do not grow their own food, they specialize in what they can do comparatively better than other people and then trade for food with farmers. The same way countries specialize in what they can do comparatively better and then trade. This leads to higher living standards, because if someone focuses only on farming that person can produce more food than someone who is not specialist farmer but a jack of all trades master of none.</p>
<p>In many places that might even cause famines since some countries have higher population than can be sustained without any import of food (e.g. Singapore).  It would certainly lead to great decrease of human population globally, not only because it would lead to lack of food.</p>
<p>This being said of course it is technically possible to do it if people would be fine with massive decrease with living standards. But it would be very hard since people would try to break law and trade with foreigners anyway (people smuggle even when there are just minimal restriction on trade) so it would require very heavy handed response from the government, similar to USSR iron curtain that every country would have to maintain (e.g. heavily fortified/guarded border walls). In addition, I do not believe any democratic electorate would be willing to put out with becoming impoverished so I do not believe that this would be possible to implement without autocracy. Even if people would foolishly vote for this they would promptly vote against it once the effects would become visible.</p>
<p>You can see that on the case of Brexit. Brexit is not even a full autarky (which is what you propose), it is just exist from free trade area with EU that makes trade for Britain little bit more difficult, yet it causes significant loss of welfare (approximately 6.3-9.5% loss in GDP per capita in long term and immediate loss of about 2.6% in short run - <a href="http://eprints.lse.ac.uk/66144/" rel="nofollow noreferrer">Dhingra et al 2016</a>). As a consequence many voters say now they would switch their vote (<a href="https://yougov.co.uk/topics/politics/articles-reports/2021/02/02/britons-would-vote-remain-are-less-sure-about-re-j" rel="nofollow noreferrer">yougov</a>).</p>
<p>Your proposal would be like Brexit on steroids, the effects would be of several magnitudes larger.</p>
<blockquote>
<p>Would the robustness of an economy without trade and other benefits I’m not sure of right now be worth any downsides, such as economic strain (because countries aren’t getting money from trade agreements and are using more on attempting to find a way to obtain certain resources without trade)?</p>
</blockquote>
<p>This is question for moral philosophers to answer.</p>
<p>Trade makes people better off, it allows them to achieve higher standards of welfare  and it reduces poverty. On the other hand it probably hurts more to be rich and than having your riches to be taken away from you than always being poor because people get used to the comfort and if you never experienced good life then you don't know what you are missing.</p>
<p>A science cannot determine whether the benefit of always being poor and thus robust to loss of riches is better than being rich with some small but real probability of becoming poor. That is for moral philosophers to ponder.</p>
<p>It would be equivalent of asking engineer whether costs of  building buildings, with all the modern comforts, in places where there are earthquakes, are worth the benefit of forcing people to live in tents but having city virtually immune to earthquakes. After all, if everyone lives in tents then city is robust to any earthquake because even heavy earthquake will do minimal damage if there are no firm structures in the city. So is it worth to make the exchange? That's a philosophical question.</p>
<blockquote>
<p>Also, what would happen to the global economy as a whole?</p>
</blockquote>
<p>Without question it would collapse. That would be the largest global recession world had ever seen. Covid-19 disrupted supply chains and economic activity a little bit and it caused greater recession than 2008 financial meltdown. This would be without question largest economic recession in history of mankind.</p>
<p>As already mentioned above even relatively small disruption to UK trade could lead to 6.3-9.5% loss in national income per capita. Complete autarky would lead to drop that would be much higher, there are no studies that would calculate impacts of such far fetched ideas as complete autarky but if hypothetically some study would say the world output would contract by 5-8 times more it would not raise eyebrows.</p>
<p>Autarky is man-made disruption of world supply chains. The effect on world economy from a volcano or pandemic that would completely shut down trade will be similar effect as when politicians decide to shut down trade.</p>
<blockquote>
<p>Which countries would be most and least affected and in what ways?</p>
</blockquote>
<p>Geographically small countries with limited resources would be most affected. They would experience economic collapse and return to low living standards that our ancestors had in distant past. Geographically large countries with lot of natural resources would be least affected but they would still experience significant and in modern times unprecedented drop in living standards.</p>
<hr />
<p>Answer to new edited question:</p>
<blockquote>
<p>Would the increased robustness of an autarkic economy outweigh any economic costs (many of these could be alleviated by gradually making the switch) such as increased expenditure on finding ways to obtain certain resources without trade?</p>
</blockquote>
<p>No. Problem with sudden loss of trade is not just that it is sudden, it is the loss of trade itself. Of course, making the process gradual would ease the pain little bit, similarly as getting unemployed without severance is worse than when there is some transitional period with severance, but in the end you end up unemployed anyway.</p>
<p>Trade itself is beneficial and increases material standards of living (see for example discussion in Krugman et al International Economics: Theory and Policy Ch 1-3). Of course, any unexpected negative shock is worse than slow expected negative shock, but removing trade still creates negative shock.</p>
<p>Here we again can use Brexit as a case study. Brexit did not happen overnight. First UK leaving EU free trade area took 2 years after article 50 was invoked (and this article was not invoked immediately after the referendum). So UK leaving EU was almost 3 year process. In addition, it was not even completely unexpected shock as polling was showing the vote was very close so people already had chance to start preparing even before for this eventuality.</p>
<p>Yet as discussed above the Brexit had immediate negative effects, and what even more, the research estimates that the long-term negative effects will be even <em>worse</em> then short term ones. This is because trade has not just static positive effect (it allows economies to produce and operate on higher level) but it also has dynamic effects that allows countries to progress faster (see Krugman et al Ch 3). So removing it (even taking the surprise factor out of the equation) creates double whammy of reducing the production possibilities of the country immediately and retarding the growth of production possibilities of the country in the future. Since economic growth is compounding this can have profound effects over time. If we have two equal countries starting with 100 GDP per capita but one grows at 2% and another one at 1% per year then over 100 year period faster growing country will have GDP per capita of 724.46, and slow growing country 270.48. By removing the unexpected shock you might be able to mitigate the immediate damage but it won't help mitigate much if any of the long term damage that is even higher than the immediate damage.</p>
<p>Again there is a philosophical debate about whether its better to live in stable poverty, or live at high standards of living with some risks that there might be periods of time when those standards of living drop. However, there is no question that material standards of living themselves will be higher in trading countries (even factoring in occasional disruptions during global disasters) than in countries under autarky.</p>

CC BY-SA 4.0
2022-11-06T10:33:00.120Z
That kinda proves my point. Small trade disruptions = big economic ones. We rely too much on trade, and it leads to a fragile economy. I’ll edit the question for clarification
A. N Asker
CC BY-SA 4.0
2022-11-06T10:53:49.193Z
@A.NAsker what point? Thats like saying, if you live in house and it happens to burn down = big disruption to your life. We rely too much for living inside homes lets stop living in homes and start living in streets. Now don't get me wrong, there is no scientific reason not for all of us to live on the streets, but there is no way you will be equally comfortable as living in nice home. The same way we could eliminate all trade and live in medieval style subsistence economy that is robust to supply chain disruptions but it will not be pleasant
1muflon1
CC BY-SA 4.0
2022-11-06T11:25:31.287Z
or even better more direct analogy I just thought about: why not just stay always unemployed? After all there is always probability you will get fired which creates economic disruption to you. This nearly equivalent to disruption of trade. Of course, you can stay your whole life unemployed and thus be robust to any increase in unemployment (lets say during recession), but to stay always unemployed you will have to drastically sacrifice your living standards. Whether the benefit of being robust to employment shocks is worth the low living standards  of being unemployed is philosophical question
1muflon1
CC BY-SA 4.0
2022-11-07T04:56:08.947Z
That link doesn’t work, try again
A. N Asker
CC BY-SA 4.0
2022-11-07T09:54:00.470Z
I double checked the links in the answer and they do work, what do you mean?
1muflon1
CC BY-SA 4.0
2022-11-10T09:45:39.860Z
I don’t really know, it just doesn’t work. I am using this on a mobile phone so that might have something to do with it. It’s only the links in the newer answer that don’t work
A. N Asker
CC BY-SA 4.0
2022-11-10T09:46:30.463Z
Also how can comparatively better living standards be kept during times of trade disruption in trading countries (literally every country in the world)
A. N Asker
CC BY-SA 4.0
2022-11-10T12:10:19.100Z
@A.NAsker comparatively to what exactly?
1muflon1
CC BY-SA 4.0
2022-11-17T20:20:12.810Z
To other countries
A. N Asker
CC BY-SA 4.0
2022-11-17T22:56:28.117Z
@A.NAsker but in trading countries the standards of living are already higher than in non-trading countries even during disruptions. For example, North Korea is under near complete autarky (there is some meager trade with china), and the living standards in North Korea are several orders of magnitude lower than in highly trading countries like South Korea, and this was true even during the worst covid lockdowns.
1muflon1
CC BY-SA 4.0
2022-11-05T11:58:25.360Z
2022-11-06T14:53:29.090Z
2022-11-06T14:53:29.090Z
1muflon1
<blockquote>
<p><strong>How can a giant volcanic eruption devastate the world?</strong>
Aside from the immediate fatalities,
the eruption can devastate the world’s economy and climate cannot be understated. A good comparison would be the last recorded magnitude 7 eruption in Tambora.
While the death toll was severe, it impacted the entire world. The eruption launched huge amounts of volcanic ash, water and sulphuric acid into the atmosphere, obscuring the Sun and repelling some solar radiation. The Tambora eruption’s volcanic winter hit hard in 1816, which has become known as the Year Without a Summer. Temperatures dropped worldwide and climate and weather changes were felt everywhere. But Europe and North America were arguably the most severely hit, with lakes and rivers being frozen over in July and August. Crop damage was rampant, harvests ruined and food shortages widespread. Food prices skyrocketed and violent riots erupted. Malnourishment soon became a severe issue, facilitating disease epidemics that killed tens of thousands. <strong>Could it get worse?</strong> The world is already experiencing severe food shortages and rising prices, though these were largely caused by inflation and the Russo-Ukraine War. However, incidents like this, the COVID-19 pandemic and the blocking of the Suez Canal serve to underscore just how fragile the global supply chain is.</p>
</blockquote>
<p>Given these risks, would it be better for the economy to abolish trade completely and develop a principle of self-sufficiency, where a state will attempt to find any way to make and obtain its resources and products completely by itself if it is even remotely possible to do so? Would the increased robustness of an autarkic economy outweigh any economic costs (many of these could be alleviated by gradually making the switch) such as increased expenditure on finding ways to obtain certain resources without trade? Also, what would happen to the global economy as a whole? Which countries would be most and least affected and in what ways?</p>

CC BY-SA 4.0
2022-11-06T10:58:21.060Z
Imagine the disruptions if farmers in your country go on strike. Why not abolish all trade international and domestic! Your supply chain will be even more robust if you produce everything at home. Also you never know if your family gets mad at you, even better if you literally produce everything yourself.
csilvia
CC BY-SA 4.0
2022-12-23T11:22:27.603Z
That’s kinda silly. That just forces the farmers will onto the silly government, which is good.
A. N Asker
<international-trade>
Would the more robust global economy resulting from the abolition of trade be worth any costs? What would happen to the economy?
A. N Asker
# Would the more robust global economy resulting from the abolition of trade be worth any costs? What would happen to the economy?

(Asked by: username_0 on 2022-11-05)

> **How can a giant volcanic eruption devastate the world?**
> Aside from the immediate fatalities,
> the eruption can devastate the world’s economy and climate cannot be understated. A good comparison would be the last recorded magnitude 7 eruption in Tambora.
> While the death toll was severe, it impacted the entire world. The eruption launched huge amounts of volcanic ash, water and sulphuric acid into the atmosphere, obscuring the Sun and repelling some solar radiation. The Tambora eruption’s volcanic winter hit hard in 1816, which has become known as the Year Without a Summer. Temperatures dropped worldwide and climate and weather changes were felt everywhere. But Europe and North America were arguably the most severely hit, with lakes and rivers being frozen over in July and August. Crop damage was rampant, harvests ruined and food shortages widespread. Food prices skyrocketed and violent riots erupted. Malnourishment soon became a severe issue, facilitating disease epidemics that killed tens of thousands. **Could it get worse?** The world is already experiencing severe food shortages and rising prices, though these were largely caused by inflation and the Russo-Ukraine War. However, incidents like this, the COVID-19 pandemic and the blocking of the Suez Canal serve to underscore just how fragile the global supply chain is.

Given these risks, would it be better for the economy to abolish trade completely and develop a principle of self-sufficiency, where a state will attempt to find any way to make and obtain its resources and products completely by itself if it is even remotely possible to do so? Would the increased robustness of an autarkic economy outweigh any economic costs (many of these could be alleviated by gradually making the switch) such as increased expenditure on finding ways to obtain certain resources without trade? Also, what would happen to the global economy as a whole? Which countries would be most and least affected and in what ways?

**Tags:** international-trade
> **Comments:**
> **username_1**: Imagine the disruptions if farmers in your country go on strike. Why not abolish all trade international and domestic! Your supply chain will be even more robust if you produce everything at home. Also you never know if your family gets mad at you, even better if you literally produce everything yourself.  
> **username_0**: That’s kinda silly. That just forces the farmers will onto the silly government, which is good.  

---

## 1 answers

### Answer by username_2 on 2022-11-05. Score: 3 | Accepted answer

> Given these risks, would it be better to abolish trade completely and develop a principle of self-sufficiency, where a state will attempt to find any way to make and obtain its resources and products completely by itself if it is even remotely possible to do so?

No it would not be better abolishing trade completely, if by better you are asking if countries would have higher material levels of welfare.

For most countries that would mean literally going back to dark ages as some small countries do not have resources to produce modern technologies (for example lithium for batteries is available only in few locations around the world). Big countries such as USA or Russia or China might not go all the way to stone age but the welfare standards would plunge by decades if not centuries and most modern comforts would not be widely accessible to public.

Even if we would allow trade in commodities that are not physically present in home country it would lead to major economic disaster. People trade precisely because trade is beneficial. Carpenters do not grow their own food, they specialize in what they can do comparatively better than other people and then trade for food with farmers. The same way countries specialize in what they can do comparatively better and then trade. This leads to higher living standards, because if someone focuses only on farming that person can produce more food than someone who is not specialist farmer but a jack of all trades master of none.

In many places that might even cause famines since some countries have higher population than can be sustained without any import of food (e.g. Singapore). It would certainly lead to great decrease of human population globally, not only because it would lead to lack of food.

This being said of course it is technically possible to do it if people would be fine with massive decrease with living standards. But it would be very hard since people would try to break law and trade with foreigners anyway (people smuggle even when there are just minimal restriction on trade) so it would require very heavy handed response from the government, similar to USSR iron curtain that every country would have to maintain (e.g. heavily fortified/guarded border walls). In addition, I do not believe any democratic electorate would be willing to put out with becoming impoverished so I do not believe that this would be possible to implement without autocracy. Even if people would foolishly vote for this they would promptly vote against it once the effects would become visible.

You can see that on the case of Brexit. Brexit is not even a full autarky (which is what you propose), it is just exist from free trade area with EU that makes trade for Britain little bit more difficult, yet it causes significant loss of welfare (approximately 6.3-9.5% loss in GDP per capita in long term and immediate loss of about 2.6% in short run - [Dhingra et al 2016](http://eprints.lse.ac.uk/66144/)). As a consequence many voters say now they would switch their vote ([yougov](https://yougov.co.uk/topics/politics/articles-reports/2021/02/02/britons-would-vote-remain-are-less-sure-about-re-j)).

Your proposal would be like Brexit on steroids, the effects would be of several magnitudes larger.

> Would the robustness of an economy without trade and other benefits I’m not sure of right now be worth any downsides, such as economic strain (because countries aren’t getting money from trade agreements and are using more on attempting to find a way to obtain certain resources without trade)?

This is question for moral philosophers to answer.

Trade makes people better off, it allows them to achieve higher standards of welfare and it reduces poverty. On the other hand it probably hurts more to be rich and than having your riches to be taken away from you than always being poor because people get used to the comfort and if you never experienced good life then you don't know what you are missing.

A science cannot determine whether the benefit of always being poor and thus robust to loss of riches is better than being rich with some small but real probability of becoming poor. That is for moral philosophers to ponder.

It would be equivalent of asking engineer whether costs of building buildings, with all the modern comforts, in places where there are earthquakes, are worth the benefit of forcing people to live in tents but having city virtually immune to earthquakes. After all, if everyone lives in tents then city is robust to any earthquake because even heavy earthquake will do minimal damage if there are no firm structures in the city. So is it worth to make the exchange? That's a philosophical question.

> Also, what would happen to the global economy as a whole?

Without question it would collapse. That would be the largest global recession world had ever seen. Covid-19 disrupted supply chains and economic activity a little bit and it caused greater recession than 2008 financial meltdown. This would be without question largest economic recession in history of mankind.

As already mentioned above even relatively small disruption to UK trade could lead to 6.3-9.5% loss in national income per capita. Complete autarky would lead to drop that would be much higher, there are no studies that would calculate impacts of such far fetched ideas as complete autarky but if hypothetically some study would say the world output would contract by 5-8 times more it would not raise eyebrows.

Autarky is man-made disruption of world supply chains. The effect on world economy from a volcano or pandemic that would completely shut down trade will be similar effect as when politicians decide to shut down trade.

> Which countries would be most and least affected and in what ways?

Geographically small countries with limited resources would be most affected. They would experience economic collapse and return to low living standards that our ancestors had in distant past. Geographically large countries with lot of natural resources would be least affected but they would still experience significant and in modern times unprecedented drop in living standards.

---

Answer to new edited question:

> Would the increased robustness of an autarkic economy outweigh any economic costs (many of these could be alleviated by gradually making the switch) such as increased expenditure on finding ways to obtain certain resources without trade?

No. Problem with sudden loss of trade is not just that it is sudden, it is the loss of trade itself. Of course, making the process gradual would ease the pain little bit, similarly as getting unemployed without severance is worse than when there is some transitional period with severance, but in the end you end up unemployed anyway.

Trade itself is beneficial and increases material standards of living (see for example discussion in Krugman et al International Economics: Theory and Policy Ch 1-3). Of course, any unexpected negative shock is worse than slow expected negative shock, but removing trade still creates negative shock.

Here we again can use Brexit as a case study. Brexit did not happen overnight. First UK leaving EU free trade area took 2 years after article 50 was invoked (and this article was not invoked immediately after the referendum). So UK leaving EU was almost 3 year process. In addition, it was not even completely unexpected shock as polling was showing the vote was very close so people already had chance to start preparing even before for this eventuality.

Yet as discussed above the Brexit had immediate negative effects, and what even more, the research estimates that the long-term negative effects will be even *worse* then short term ones. This is because trade has not just static positive effect (it allows economies to produce and operate on higher level) but it also has dynamic effects that allows countries to progress faster (see Krugman et al Ch 3). So removing it (even taking the surprise factor out of the equation) creates double whammy of reducing the production possibilities of the country immediately and retarding the growth of production possibilities of the country in the future. Since economic growth is compounding this can have profound effects over time. If we have two equal countries starting with 100 GDP per capita but one grows at 2% and another one at 1% per year then over 100 year period faster growing country will have GDP per capita of 724.46, and slow growing country 270.48. By removing the unexpected shock you might be able to mitigate the immediate damage but it won't help mitigate much if any of the long term damage that is even higher than the immediate damage.

Again there is a philosophical debate about whether its better to live in stable poverty, or live at high standards of living with some risks that there might be periods of time when those standards of living drop. However, there is no question that material standards of living themselves will be higher in trading countries (even factoring in occasional disruptions during global disasters) than in countries under autarky.

> **Comments:**
> **username_0**: That kinda proves my point. Small trade disruptions = big economic ones. We rely too much on trade, and it leads to a fragile economy. I’ll edit the question for clarification  
> **username_2**: @A.NAsker what point? Thats like saying, if you live in house and it happens to burn down = big disruption to your life. We rely too much for living inside homes lets stop living in homes and start living in streets. Now don't get me wrong, there is no scientific reason not for all of us to live on the streets, but there is no way you will be equally comfortable as living in nice home. The same way we could eliminate all trade and live in medieval style subsistence economy that is robust to supply chain disruptions but it will not be pleasant  
> **username_2**: or even better more direct analogy I just thought about: why not just stay always unemployed? After all there is always probability you will get fired which creates economic disruption to you. This nearly equivalent to disruption of trade. Of course, you can stay your whole life unemployed and thus be robust to any increase in unemployment (lets say during recession), but to stay always unemployed you will have to drastically sacrifice your living standards. Whether the benefit of being robust to employment shocks is worth the low living standards  of being unemployed is philosophical question  
> **username_0**: That link doesn’t work, try again  
> **username_2**: I double checked the links in the answer and they do work, what do you mean?  
> **username_0**: I don’t really know, it just doesn’t work. I am using this on a mobile phone so that might have something to do with it. It’s only the links in the newer answer that don’t work  
> **username_0**: Also how can comparatively better living standards be kept during times of trade disruption in trading countries (literally every country in the world)  
> **username_2**: @A.NAsker comparatively to what exactly?  
> **username_0**: To other countries  
> **username_2**: @A.NAsker but in trading countries the standards of living are already higher than in non-trading countries even during disruptions. For example, North Korea is under near complete autarky (there is some meager trade with china), and the living standards in North Korea are several orders of magnitude lower than in highly trading countries like South Korea, and this was true even during the worst covid lockdowns.  

---

