The rise of autarky: How self-reliance is redefining trade

Suspicion and strained supply chains were already testing the global system before Covid-19 heightened isolationist impulses

- Martin Farrer

When Xi Jinping promised the world’s movers and shakers in January 2017 that China would champion globalisation, it looked as if the baton of global economic leadership was being picked up seamlessly by Beijing as Donald Trump prepared to usher in an era of American isolationism.

Almost five years later a new world order has emerged, but it is not the one those gathered in Davos that day seemed to have in mind . Instead of a continuation of the post-cold war era of growth underpinned by free trade, the world faces a fractured economic system where the post-pandemic supply shock and mistrust bred by the virus pushes countries towards an autarkist impulse for self-sufficiency.

Autarky is a Greek word meaning “self-reliance” and was popularised as shorthand for economic nationalism in the 19th century. It gained some credence as an economic model when the young Soviet Union in effect shut itself off from world trade, and the nationalist impulse towards self- sufficiency appealed to Hitler . It also flourished in the postwar world, especially in Africa, though the creed of globalisation has left few examples outside North Korea.

There were already some signs of nationalist-driven challenges to the prevailing system exemplified by Brexit, the rise of Trump, and a growing suspicion that China was not prepared to play by the rules set by the US and its proxies.

The Covid-19 pandemic has accelerated these trends, experts believe.

Evgeny Postnikov, a senior lecturer in international relations at the University of Melbourne, said the pressures of the pandemic have delivered a stark realisation about how much countries rely on imports and products enmeshed in the global supply chain.