Autarky: Terrible at Political Scale, But Great as Individual Self-Defense

Since everyone seems to have a sticker shock story lately:  I rolled one of my motorcycles up to a gas pump yesterday and, for the first time ever, spent more than $5 to fill the tank (small bike, small tank — I paid $5.67 for 1.1 gallons of premium).

The obvious reason is, well, obvious.

Since the US war on Iran began, oil and gas prices have skyrocketed. It’s the flip side of the Otto T. Mallery paraphrase: “When goods don’t cross borders, armies will.”  In this case, the engagement of armies — attacks on energy facilities, the near-closure of the Strait of Hormuz — is hitting the global, intertwined “supply side” of oil and its associated products rather than vice versa. Same concept, different application.

US government policy in recent years has tended toward aspirations to autarky — “economic independence” at a national level. You’ve heard the slogans. “America First!” “Buy American!” “Energy independence!”

At the level of a society or national government, autarky is a stump-stupid idea. It makes people poorer by thwarting competitive advantage.

That is: Some people in some places can do or make this or that thing less expensively than other people in other places, meaning they can sell at lower prices. The sellers do better because they sell more. The buyers do better because they pay less. Everybody wins!

Well, not exactly. Enterprises that don’t enjoy competitive advantage in Activity X don’t do better if they stick to Activity X. They lose. Instead of coming up with new business models they tend to lean on governments to “protect” them from “foreign competition” at the expense of those own governments’ consumers with tariffs and other trade barriers. In which case everybody loses … except the most politically connected enterprises with the best lobbyists.

The war on Iran is temporarily producing the same result that actual US “energy independence” — usually promoted as proposed autarky in the production/sale of oil — would deliver without “armies crossing borders.”

Almost all  oil and gas produced in the US comes from “tight formation production” — horizontally drilled wells and hydraulic fracturing (“fracking”) to extract the stuff from shale . That’s more expensive than just drilling a vertical well and pumping the black gold out, as is done in the Middle East.

That’s a “competitive disadvantage” for US oil companies. The only way for US oil production to be profitable is for the price per barrel to be kept artificially high through “protectionist” measures … or war. The US producers can only profit by increasing YOUR costs.

At the level of the individual American, on the other hand, a certain amount of “energy independence” — autarky! — makes a good deal of sense.

Some Americans AREN’T experiencing sticker shock at the pump because they don’t drive gas-powered vehicles. And some of those Americans aren’t paying more for the energy to power those vehicles because they’re generating that energy themselves using home solar or wind mechanisms (or, in the case of non-electric bicycles or just plain walking, their own bodies).

It’s not total autarky. “No man is an island” and solar panels, turbines, bicycles, and calories have to come from somewhere. But it’s a lot closer to autarky than daily reliance on distant sources subject to constant political machinations or military developments.

While it’s obviously difficult, if not impossible, to become the mythical entirely self-reliant “rugged individualist,” there’s something to be said for protecting your daily life from the whims of politicians who don’t understand — or maybe just don’t care — that global free trade produces maximum prosperity.

From weaning ourselves off gasoline to planting home gardens, etc., a certain amount of “autarky” is really just smart self-defense.

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