Empire: The Rise and Demise of the British World Order and the Lessons for Global Power (61 page)

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Authors: Niall Ferguson

BOOK: Empire: The Rise and Demise of the British World Order and the Lessons for Global Power
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It did not happen. On the contrary, Suez revealed that the fundamental American hostility towards the Empire lingered on. And when the Americans exercised their veto, the façade of neo-imperial power collapsed. ‘Thinking over our difficulties in Egypt’, minuted a world-weary Foreign Office mandarin in the 1950s, ‘it seems to me that the essential difficulty arises from the very obvious fact that we lack power ... On a strictly realistic view we ought to recognise that our lack of power must limit what we can do, and should lead us to a policy of surrender or near surrender imposed by necessity’.
Just as Hitler had predicted, it was rival empires more than indigenous nationalists who propelled the process of decolonization forward. As the Cold War entered its hottest phase in the 1960s, the United States and the Soviet Union vied with one another to win the support of independence movements in Africa, Asia and the Caribbean. What Harold Macmillan called ‘the winds of change’ when he toured Africa in 1960 blew not from Windhoek or Malawi but from Washington and Moscow. Tragically, they often blew away colonial rule only to replace it with civil war.
The bottom line was, of course, the economy. Exhausted by the costs of victory, denied the fresh start that followed defeat for Japan and Germany, Britain was simply no longer able to bear the costs of Empire. Nationalist insurgency and new military technology made imperial defence much more expensive than before. Between 1947 and 1987 British defence expenditure had amounted to 5.8 per cent of gross domestic product. A century before, the proportion had been a mere 2.6 per cent. In the nineteenth century Britain had financed her chronic trade deficit with the income from a vast overseas investment portfolio. That had now been replaced with a crushing foreign debt burden, and the Treasury had to meet the much larger costs of nationalized health care, transport and industry.
It was, as Keynes said, ‘primarily ... to meet the political and military expenditure overseas’ that Britain turned to the US for a loan when the war – and Lend-Lease – ended in 1945. But the conditions attached to the loan at once had the effect of undermining British overseas power. In return for $3.75 billion,
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the Americans insisted that the pound be made convertible into the dollar within twelve months. The run on the Bank of England’s reserves this caused was the first of the succession of sterling crises that were to punctuate Britain’s retreat from empire: by the time of Suez the pattern was tiresomely familiar. In the early 1950s, Harold Macmillan declared that the choice facing the country was between ‘the slide into a shoddy and slushy Socialism (as a second-rate power), or the march to the third British Empire’. After Suez only the first option seemed to remain.
The depreciation of the pound against the dollar was just a symptom of the country’s precipitous economic decline: from 25 per cent of world manufacturing exports in 1950 to just 9 per cent in 1973; from more than 33 per cent of world merchant shipping launchings to less than 4 per cent; from 15 per cent of world steel exports to barely 5 per cent. Because she was much less affected by war damage, Britain had emerged from the war as the biggest European economy; by 1973 she had been overtaken by both Germany and France, and very nearly surpassed by Italy. The British rate of growth of per capita GDP between 1950 and 1973 was the lowest in Europe, less than half the German rate. Yet we should not leap to the conclusion that this made a British reorientation away from the Commonwealth and towards continental Europe economically inevitable. That was often how the case for British membership of the European Economic Community was presented. It is true the proportion of British trade with the countries that formed the EEC grew from 12 to 18 per cent between 1952 and 1965. But the share of total trade with the Commonwealth remained substantially larger: though it fell from 45 per cent to 35 per cent, it remained twice as important as EEC trade. It was only after British entry into the ‘Common Market’ that European protectionist tariffs, particularly on agricultural products, forced a dramatic reorientation of British trade from the Commonwealth to the continent. As so often, it was the political decision that caused the economic change, not the other way round.
What was wrong with the Commonwealth was not so much its declining economic importance to Britain as its growing political impotence. Originally just Britain and the white dominions, the Commonwealth was joined by India, Pakistan and Ceylon (Sri Lanka) in 1949. By 1965 there were twenty-one members and ten more joined in the following ten years. The Commonwealth currently has fifty-four members and has become little more than a subset of the United Nations or the International Olympic Committee, its only obvious merit being that it saves money on professional translators. The English language is the one thing the Commonwealth still has in common.
Thus it was that the British Empire, which had effectively been for sale in 1945, was broken up rather than being taken over; went into liquidation rather than acquiring a new owner. It had taken around three centuries to build. At its height it had covered a quarter of the world’s land surface and governed around the same proportion of its population. It took just three decades to dismantle, leaving only a few scattered islands – from Ascension to Tristan da Cunha – as mementoes.
Back in 1892 the young Churchill had been all too right to expect ‘great upheavals’ in the course of his long life. But by the time of his death in 1965 it had become clear that his hope of saving the Empire had been no more than a schoolboy fantasy.
When faced with the choice between appeasing or fighting the worst empires in all history, the British Empire had done the right thing. Even Churchill, staunch imperialist that he was, did not have to think for long before rejecting Hitler’s squalid offer to let it survive alongside a Nazified Europe. In 1940, under Churchill’s inspired, indomitable, incomparable leadership, the Empire had stood alone against the truly evil imperialism of Hitler. Even if it did not last for the thousand years that Churchill hopefully suggested it might, this was indeed the British Empire’s ‘finest hour’.
Yet what made it so fine, so authentically noble, was that the Empire’s victory could only ever have been Pyrrhic. In the end, the British sacrificed her Empire to stop the Germans, Japanese and Italians from keeping theirs. Did not that sacrifice alone expunge all the Empire’s other sins?
CONCLUSION
 
Great Britain has lost an Empire and has not yet found a role.
Dean Acheson, 1962
 
 
 
 
T
he British Empire is long dead; only flotsam and jetsam now remain. What had been based on Britain’s commercial and financial supremacy in the seventeenth and eighteenth centuries and her industrial supremacy in the nineteenth was bound to crumble once the British economy buckled under the accumulated burdens of two world wars. The great creditor became a debtor. In the same way, the great movements of population that had once driven British imperial expansion changed their direction in the 1950s. Emigration from Britain gave way to immigration into Britain. As for the missionary impulse that had sent thousands of young men and women around the world preaching Christianity and the gospel of cleanliness, that too dwindled, along with public attendance at church. Christianity today is stronger in many of her former colonies than in Britain itself.
Sir Richard Turnbull, the penultimate Governor of Aden, once told Labour politician Denis Healey that ‘when the British Empire finally sank beneath the waves of history, it would leave behind it only two monuments: one was the game of Association Football, the other was the expression “Fuck off”’. In truth, the imperial legacy has shaped the modern world so profoundly that we almost take it for granted.
Without the spread of British rule around the world, it is hard to believe that the structures of liberal capitalism would have been so successfully established in so many different economies around the world. Those empires that adopted alternative models – the Russian and the Chinese – imposed incalculable misery on their subject peoples. Without the influence of British imperial rule, it is hard to believe that the institutions of parliamentary democracy would have been adopted by the majority of states in the world, as they are today. India, the world’s largest democracy, owes more than it is fashionable to acknowledge to British rule. Its elite schools, its universities, its civil service, its army, its press and its parliamentary system all still have discernibly British models. Finally, there is the English language itself, perhaps the most important single export of the last 300 years. Today 350 million people speak English as their first language and around 450 million have it as a second language. That is roughly one in every seven people on the planet.
Of course no one would claim that the record of the British Empire was unblemished. On the contrary, I have tried to show how often it failed to live up to its own ideal of individual liberty, particularly in the early era of enslavement, transportation and the ‘ethnic cleansing’ of indigenous peoples. Yet the nineteenth-century Empire undeniably pioneered free trade, free capital movements and, with the abolition of slavery, free labour. It invested immense sums in developing a global network of modern communications. It spread and enforced the rule of law over vast areas. Though it fought many small wars, the Empire maintained a global peace unmatched before or since. In the twentieth century too it more than justified its own existence, for the alternatives to British rule represented by the German and Japanese empires were clearly far worse. And without its Empire, it is inconceivable that Britain could have withstood them.
There would certainly not have been so much free trade between the 1840s and the 1930s had it not been for the British Empire. Relinquishing Britain’s colonies in the second half of the nineteenth century would have led to higher tariffs in their markets, and perhaps other forms of trade discrimination. The evidence for this need not be purely hypothetical: it manifested itself in the highly protectionist policies adopted by the United States and India after they secured independence, as well as in the tariffs adopted by Britain’s imperial rivals France, Germany and Russia in the 1870s and after. Britain’s military budget before the First World War can therefore be seen as a remarkably low insurance premium against international protectionism. According to one estimate, the economic benefit to the UK of enforcing free trade could have been as high as 6.5 per cent of gross national product. No one has yet ventured to estimate what the benefit to the world economy as a whole may have been; but that it was a benefit and not a cost seems beyond dispute, given the catastrophic consequences of the global descent into protectionism as Britain’s imperial power waned in the 1930s.
Nor would there have been so much international mobility of labour – and hence so much global convergence of incomes before 1914 – without the British Empire. True, the United States was always the most attractive destination for nineteenth-century migrants from Europe; nor did all the migrants originate in the colonizing countries. But it should not be forgotten that the core of the US had been under British rule for the better part of a century and a half before the War of Independence, and that the differences between independent and British North America remained minor.
It is also worth remembering that the significance of the white dominions as destinations for British emigrants grew markedly after 1914, as the US tightened restrictions on immigration and, after 1929, endured a far worse Depression than anything experienced in the sterling bloc. Finally, we should not lose sight of the vast numbers of Asians who left India and China to work as indentured labourers, many of them on British plantations and mines in the course of the nineteenth century. There is no question that the majority of them suffered great hardship; many indeed might well have been better off staying at home. But once again we cannot pretend that this mobilization of cheap and probably underemployed Asian labour to grow rubber and dig gold had no economic value.

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