causal

Subsidies push socialist economies toward autarky

Heavy subsidization in socialist economies forces them toward autarky: because products like sugar, oil, and gasoline are subsidized (subsidies reached 15% of GDP in 1980s Poland), the state must impose export controls to prevent foreigners from buying subsidized goods, so the rational individual behaviors aggregate into an outcome that looks bizarre from outside.

causalpending

Speaker

Branko Milanovic

Evidence Quote

you see then immediately how an economy will tend to become autarkic simply because of a huge subsidization of things. Subsidies were 15% of GDP in Poland in the 1980s.

Source

Branko Milanovic on the Big Questions of EconomicsEconTalk
Created: 6/13/2026, 12:16:00 AM

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