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In my setting there's a planetary system that did something bad and the rest of systems put it under embargo that lasts for more then a half century.

In order to simplify things how would country be affected on economic level if it was an island like Cuba, but placed somewhere far like Tahiti, and without any friends (unlike USSR for Cuba), the most similar things today is probably North Korea?

  1. The international fleet can't stop every smuggler, but no large ships could enter or exit.

  2. The country doesn't have any extremely valuable resource like oil or diamonds that would tempt others to cheat

  3. The international community has no ability to overthrow the government or invade it.

  4. The country doesn't want to change in order to be accepted back.

  5. The country has relatively free market economy

EDIT

After reading about sanctions in history below are my expectations :

  1. Lot of the products will be unavailable since they can't be produced economically or even at all, due to economy not being able to acquire inputs, knowledge or economy of scales. Wanna chocolate, sorry pal we can't get grow any cocoa here.

  2. Small & expensive products will be smuggled. Watches, processors & many drugs are small in bulk and if there is large price differential smugglers would be tempted. I don't know what they would pay with though, precious metals if they have them, selling family jewelry.

  3. Bulky products that are necessary for the economy would be produced locally and they would be poor man's substitutes with a twist of being relatively expensive. In order to serve farmers , a factory would be forced to simplify their design to use what is available locally. I'm sure that engineers will think of some very simple machine designs (tractor, truck or car) that does it's job and it's affordable enough that locals could buy it. If they show up with the same thing on the global market they would be laughed off.

  4. Only the products that economy has a comparative advantage would be very cheap. If they have a excellent climate for growing tropical fruits and can't export them, prices would be cheap.

  5. They would be forced to (poorly) maintain lot's of the technology that can't be replaced for very long time.

In short even with magic of free market working, I expect them to be poor and backward.

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  • $\begingroup$ Is your question about an earth-bound island nation, or about an outer-space planetary system? The answers will be vastly different. $\endgroup$
    – cobaltduck
    Commented Oct 6, 2016 at 20:32
  • $\begingroup$ @cobaltduck Earth island, the rest is very dependent on technology. $\endgroup$
    – Platypus
    Commented Oct 6, 2016 at 20:34
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    $\begingroup$ None of the real world examples like the DPRK, Cuba etc. have a remotely "free market" economy. Even Iran's economy is largely a Kleptocracy, with the Iranian Revolutionary Guards taking a cut of every transaction they can. The black market is the only "free market" existing in these places. $\endgroup$
    – Thucydides
    Commented Oct 6, 2016 at 20:34
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    $\begingroup$ The closest to a free market pariah country would be Apartheid South Africa. It was reasonably successful, economically. However, you don't get to be a pariah by having a nice free market economy with peace and justice. You have to do something pariah-ish, like subjugating a racial underclass. $\endgroup$
    – kingledion
    Commented Oct 6, 2016 at 23:48

2 Answers 2

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It all depends on the economic self-sufficiency of the island (or a planetary system, even). Being embargoed for half a century is enough time for local industries and businesses to develop and thrive in producing replacement goods and services to the islanders that had been formerly imported. A free market economy should be able to rise to this challenge, in fact, a free market economy will neither aid self-sufficiency nor inhibit it.

In the long run, the islanders may welcome their pariah status because they can further enhance their own local identities, create work, build businesses, and culture. Trade isn't the be-all and end-all of life. Economies are more than imports and exports.

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  • $\begingroup$ I don't think they will welcome their status, sour grapes feelings excluded. However they might decide that suffering the embargo is lesser evil then the alternative offered. $\endgroup$
    – Platypus
    Commented Oct 7, 2016 at 10:17
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    $\begingroup$ History shows people & nations rise to the occasion. They will be unbowed. They will maintain their sense of self-worth and look down on those who made them pariahs. Also, there is a long & noble tradition of embargo breaking. They will reward embargo-breakers. See South Africa, Rhodesia, & Cuba. Humans are such contrary animals. $\endgroup$
    – a4android
    Commented Oct 7, 2016 at 12:44
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Are the others willing to leave the outcasts alone?

  • During the Edo period, Japan did manage to isolate itself and the international community (such as it was) accepted that. Your fictional example could have a similar result. Technological stagnation due to a lack of imports, domestic tranquility as people don't know better. This can last for centuries, until the Outside Context Problem steams into the harbor.
  • China turned inwards during the Ming dynasty. This wasn't complete, of course.

So it can work, especially if the pariah doesn't have to spend most of the budget on defense. The citizens will miss out on some wealth and progress, but it will be bearable.

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  • $\begingroup$ @om Beside the embargo there's no will for doing anything else. I don't know how good examples Ming China & Edo Japan really are, since progress is much faster now and world is far more connected. $\endgroup$
    – Platypus
    Commented Oct 7, 2016 at 10:21

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