By Promoting Autarky, Russia Condemns Its People to Poverty

A nation that refuses to trade with others is by definition poorer. Yet that is now Russia’s policy.

Russian prime minister Dmitri Medvedev attends a cabinet meeting at President Vladimir Putin's residence outside Moscow, January 29
Russian prime minister Dmitri Medvedev attends a cabinet meeting at President Vladimir Putin’s residence outside Moscow, January 29 (Presidential Press and Information Office)

Following Russian sanctions banning the import of most farm products from Europe and North America, Prime Minister Dmitri Medvedev on Tuesday suggested the country should become agriculturally self-sufficient. This foolish longing for autarky does not bode well for the country, already teetering on the brink of recession.

On a visit to Pyatigorsk in the North Caucasus, Medvedev promised a new food program for Russia that would boost state investments in agriculture to end its dependence on imports.

The Russian import ban was itself a response to Western sanctions enacted against banks and energy companies following the downing of a passenger airliner over the east of Ukraine last month for which European countries and the United States blame pro-Russian separatists. Russia denies Western accusations that it backs the Ukrainian uprising even as Russian weapons have found their way into country — possibly including the advanced missile launchers needed to intercept an airplane at high altitude.

The uprising in Ukraine has sparked the worst crisis in East-West relations since the end of the Cold War and threatens to reverse at least part of the economic integration that has taken place between Russia and the West since then. Both sides now prioritize geopolitical imperatives over economic wellbeing — but only Russia seems to welcome the opportunity to withdraw itself from international trade.

Extremists on the left and the right have promoted autarky in the past. Cambodia’s Khmer Rouge isolated themselves from the rest of the world to build a purely agrarian society. China’s Mao Zedong attempted something similar with his “Great Leap Forward.” In both cases, the result was famine and the death of tens of thousands.

The German Nazis harbored similar ambitions. It was one of the reasons they believed they needed “living space” to the east. Hungary’s Neo-Nazi party Jobbik advocates self-suffiency today.

So proponents of the closed economy hardy find themselves in pleasant company. Reasonable people have known since British economist David Ricardo developed the theory of comparative advantage in the early nineteenth century that some countries are simply better at making some products than others and should therefore trade. If Argentina produces qualify beef and the Germans are better at making cars, surely both would benefit if the Argentinians sell their beef and buy German cars? They wouldn’t have to waste time making mediocre automobiles anymore while the Germans could free up labor to build even more and better ones.

Yet the fantasy that countries are better off when they are not “dependent” on others endures. (Even if in trade, no side is dependent on the other. They only trade because it leaves them both better off.) Russia especially should know better. It knew only hardship when the Soviet Union would not trade much with the free world. A nation that seeks self-suffiency, then, is by definition a poor nation. Yet that is exactly what Russia’s leaders are once again condemning their people to.