The development of the state of the modern world is influenced by many factors. Including the type of its economy. A closed model seems to be the best option. It makes it possible to be completely independent from other countries. But at the same time, such an economy does not allow it to develop fast and efficiently enough to maintain approximately equal positions with other states.
Definition
A closed economy (also known as “autarky”) is a model of the state in which all the needs of the population are met exclusively on their own and only at the expense of available resources. As mentioned above, this gives independence. Financial crises bypass such a country, but at the same time, the absence of external sources of goods or benefits significantly reduces the welfare of citizens. The same reason does not allow developing efficiently enough. In general, in a closed economy, the circulation of goods revolves mainly around available resources. The more there are, the higher the likelihood for some time to exist relatively well.
For whom is characteristic
Since a closed economy is primarily a tool for gaining full power in a single territory, it can most often be found in some groups of countries.
First of all, it is characteristic of a state that is going to start a war. It is logical that in conditions of confrontation with a significant part of the world it will be at least difficult to obtain the resources required for existence. And even that is impossible. In this case, a closed and well-built economy will allow in the short term to qualitatively mobilize the state, put everything on a military footing and at the same time not to worry about the lack of essentials in the process of warfare. Examples are Germany, Italy, and Japan during World War II.
Another option in which the closed economy model can be applied is when a country adheres to an ideology unrecognized by the rest of the world. For example, modern North Korea. By the way, their economy is still not completely closed, since without foreign trade it is now impossible to obtain the required resources.
It should be noted that a more or less adequate comparatively complete autarky can be used only in fairly large countries: Russia, the USA, Germany, China, India and so on. There is enough of everything there to live a good life for a long time. Small states cannot afford this. For them, an open model will be much preferable due to the fact that it allows you to develop much faster.
Positive features
As already mentioned, the main plus is independence. Even if, for some reason, ties with the outside world cease, the country will still be able to survive well on its own. For example, if in the modern world China disappears sharply somewhere, in which almost all the production of all countries is concentrated, then a crisis of tremendous proportions will occur. It should also be noted that in a closed economy, consumer spending is usually much less, because the state itself regulates the price level and keeps them at a level acceptable for self-sufficiency. True, if there are not enough resources, then the cost for everything connected with them will be truly enormous.
Negative traits
A closed economy receives virtually nothing from the outside, with rare exceptions authorized by the government.As a result, it does not have full access to new technologies, the ability to exchange them, and so on. Development is slowing down. Without the influx of foreign investment, the effectiveness of entrepreneurs (or the same state) is also not the highest. Among other things, own resources tend to run out, which will automatically cause numerous problems.
Characteristic properties
Like any other model, a closed economy has its own characteristics. It:
- Orientation of the consumer only to their own production. Any import, if it exists at all, is bought only as a last resort, when there are no other options.
- The country seeks independence in all respects, from economic to political, military, and so on.
- All technologies are developed only by scientists of the country. Other people's projects are either not used or cannot be accessed, except in some cases. This feature has two sides of the coin at once. Firstly, there is an option to invent or create something unique, inaccessible to the rest of the planet. This is extremely rare. But secondly, as happens more often, without the exchange of knowledge and technology, the country's development is slowing down and the lag will become significant soon enough.
- The isolation of the state from world politics with a high degree of probability will very soon leave it without allies against a large block of enemies. If the technological lag is significant and the armed forces are insufficient, then a potential war is unlikely to be successful.
Most often, together with such a model, a planned economic system is used, in which almost everything in the country occurs in strict accordance with the schemes approved by the government. A resource-oriented format can be chosen that implies the production of only what is available to the state (as a result, the population does not receive a significant amount of benefits available to ordinary citizens of other countries). And of course, almost always, interaction with others passes into the phase of confrontation, which rarely ends without armed conflict.
The situation in the modern world
Pure autarky in its perfect condition does not exist now. Such countries simply do not survive and quickly fall apart even without the intervention of neighbors. The same options that are used in the modern world are both an open and a closed economy. That is a mixture of their best sides without excesses. For example, North Korea, which refused full autarky back in 1994, or Albania, using only some elements of such a system. The result is a conditional independence sufficient for a possible armed conflict, but still not absolute.
Conclusion
A closed economy in its pure form simply cannot exist in modern society. Its successful implementation will require very vast territories with a large number of population and resources. In such circumstances, if you place special emphasis on science, the country will still be able to survive and, possibly, even develop along with others. However, now no state can afford such a thing, including even the USA or Russia. In principle, China could in theory, but in this case, practically all of its industrial enterprises, which give development, will become unclaimed and huge unemployment will quickly destabilize the situation.