The Empire Project: The Rise and Fall of the British World-System, 1830–1970 (65 page)

In the mid-1920s, however, economic nationalism in London's commercial empire had yet to pose a major threat to its financial and commercial interests. The great edifice of commercial primacy inherited from 1914 still
seemed
largely intact. In some sectors, like oil, telecommunications and international banking, British firms seemed well positioned to exploit the new opportunities of the post-war world. But a subtle shift was taking place whose full significance only became visible after 1930. The shortage of capital, uncompetitive industry and (in certain cases) outdated technology meant that overall the British were poorly placed to profit from the great expansion of international trade in the later 1920s.
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In both trade and finance they were drifting steadily away from the cosmopolitan traditions of the pre-war City. Much more of the City's financial business was now devoted to domestic loans. Most of British industry was now protectionist in sympathy.
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Banking and investment in Empire (rather than foreign) countries assumed an ever-growing importance. British capital now flowed predominantly into the development funds of Empire governments – Indian, dominion and colonial.
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The City's foreign income, and ultimately its solvency, were becoming more and more dependent upon its ties with dominion governments and especially India. Most important of all was the fact that not even the return to gold could reverse the great shift of financial power towards New York. America had become, like Britain, a great creditor nation. London could no longer control interest rates across the world as it had before 1914, nor draw in the gold it needed by an upward shift in its own bank rate.
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And, by the 1920s, the City's prime international asset, the collateral for any future crisis, was leaking rapidly away. In 1931, of the great treasure trove of dollar securities built up before 1914, scarcely one-tenth remained.
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The war-chest of the British system was almost empty.

West of India: the British in the Middle East

The logic of Britain's position after 1918 was to maintain its world-system but cut down its cost. Its Middle East policy seemed to throw this in reverse. There the British acquired a huge new commitment. The original impulse sprang from the need to defeat the Ottoman Empire, once it became Germany's ally. It was supercharged by the panic (in 1918) that followed Russia's collapse and the great German offensive in the West. In retrospect we can see that the strategic imperative that drove the British into the Middle East was symptomatic of the fundamental instability of their whole system. Ever since the 1870s (arguably since the 1840s), protecting their most valuable spheres and preserving the cohesion of their global empire had forced them periodically into new and heavy liabilities. Whatever ultimate benefits they promised, these new zones of imperial control increased the risk of collision with a rival power. They raised the costs of imperial defence. And, partly as a result, they threatened to upset the political balance of the British world-system by loading new burdens on its taxpayers and rousing new fears among its disparate communities.

Before 1914, British leaders had been acutely aware of this danger even if they had few means of mitigating it. The furious arguments over the occupation of Egypt that lasted at cabinet level into the mid-1890s sprang from the fear that in so exposed a salient Britain would face (sooner or later) a hostile European combination or be driven willy-nilly into a costly alliance. To sprawl across the globe like a gouty giant, warned a philosophical diplomat, courted a united onslaught by resentful rivals. But as it turned out, neither the occupation of Egypt nor

Map 10 The Middle East after 1918

the colossal share that Britain took in the partition of Africa brought on the confrontation the critics had feared. European statesmen, mindful of the tensions of continental diplomacy, were disinclined to risk much for ‘light soil’ in Africa, and only France was willing to challenge the British over Egypt – a challenge that ended in the humiliation of Fashoda in 1898. The mutual self-interest of the European powers in tranquillising (contemporaries would have said ‘pacifying’) their African possessions at the lowest cost had all but sterilised the African continent diplomatically by 1904, the year of the Anglo-French entente. But the Middle East was a different story.

If Egypt was a salient, the Middle East was a vast arena in the middle of the world that would have to be held against all comers. Since antiquity it had been a cockpit of rival imperialisms vying for its trade and agrarian wealth. It lay open to invasion over land from the north and east, and by sea from the west and south. There were wide internal frontiers of desert, marsh and mountain that waged a constant war of attrition against settled authority in the cultivation zones. Strategically, it was a quadrilateral. Mastery of the region meant keeping control of its four great gateways: at the Straits, in North Persia, on the Isthmus of Suez and round the shores of the Gulf – a task that defeated almost every conqueror except the Ottomans at the height of their power. Culturally, it was a mosaic of overlapping but impermeable communities, the residue of successive waves of conquest, conversion and migration and a reminder of the region's past as the commercial and intellectual crossroads of the Old World. In this heartland of Islam, no ruler could ignore the scribal elite (the
ulama
) who enjoyed wide popular loyalty, nor discount the traditions of religious militancy as fierce as any to be found in Europe. The guardianship of its Holy Places aroused intense concern among Islamic populations as far away as Senegal and Java. Economically, it was a region that had once been the junction of global trade, but had drifted into the relative poverty that intensified the isolation of its remoter hinterlands. Vulnerable and volatile, it was tempting to enter but hard to keep. It was small wonder that, while they had agonised over its strategic fate, no British government since 1800 toyed more than briefly with the idea of empire in the Middle East.

It was a measure of how far they had been driven from the old assumptions of imperial defence that British leaders could agree by mid-1918 that without Middle Eastern supremacy their world-system would collapse. In the year that followed, British policy was inspired by a grand design of which Lord Curzon was the principal architect. A former Viceroy, Curzon was chairman of the War Cabinet's Eastern Committee. His knowledge of the region was unmatched (but not unchallenged) by his ministerial colleagues. He was determined to exploit the twist of fate that had delivered the Middle East into British hands, for (or so he thought) it was the region in whose turbulent politics lay the most important key to imperial safety. ‘You ask’, he lectured the Eastern Committee, ‘why should England do this? Why should Great Britain push herself out in these directions? Of course the answer is obvious – India.’
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Protecting India required the exclusion of any other great power from Southwest Asia. But it did not mean the wholesale extension of colonial rule. Curzon's preference was for ‘native states’: local autonomy for Arabs (and Kurds) modelled on the princely states in India.
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What mattered most was a proper settlement for Turkey and Persia. Curzon was convinced that Ottoman Turkey must be cut down to size, to demolish its pre-war status in the Islamic world and destroy forever the power it had used with such deadly effect against Britain: its control of the Straits. Denied their old leverage in European diplomacy (command of the Straits), and restricted to their Anatolian homeland, the Turks could do little harm. In the case of Persia, against whose domination by Russia he had warned so vociferously before 1914, Curzon's plan was to bind the shah's government in a treaty that exchanged aid for influence. Teheran's grip would be tightened on its unruly provinces with British help. The shah's ministers would defer to British ‘advice’. The deal would be sweetened by a British loan. To insure against disruption from the north, a military presence would be maintained in the Caucasus and Trans-Caspia where post-imperial states were emerging from the wreck of Tsarism. And, needless to say, the whole vast scope of Curzon's plan assumed implicitly that the citadel of Britain's Middle Eastern power, her primacy in Egypt, would be even safer and stronger than before the war.

But Curzon's grand design was flawed from the outset. It assumed that the French could be denied what they had been promised in 1916: control of ‘Syria’ – a loosely defined region extending from the Lebanon coast to the Persian border. Clemenceau made it plain that British bad faith in the Middle East would cost it dearly in Europe, where French cooperation in treaty-making was vital: in September 1919, the British gave way. Curzon had assumed that the collapse of Tsarism would prevent, or postpone indefinitely, the revival of Russian influence in the Caucasus and Central Asia. By the middle of 1920, the Red Army had shown that this was a pipe-dream with immediate repercussions on the Anglo-Persian treaty, as yet unratified.
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The easy monopoly of great power influence on which Curzon had counted thus rapidly dissolved. Even in the spheres under British control, his native state formula ran into the ground. There was no question of reversing the Balfour Declaration (its author was a senior member of the Lloyd George government) with its promise of a Jewish ‘home’. That meant that in ‘Palestine’ – another ill-defined zone – Arab autonomy would have to be curtailed to protect the experiment in Jewish colonisation. Meanwhile, in Mesopotamia (modern Iraq), military occupation by an Anglo-Indian army was mutating into a form of government loosely modelled on an Indian province (not a native state), in which a cadre of British officials began to rule local communities much as they might have done in the Punjab. Indirect command of the Eurasian crossroads, cheap, flexible, cooperative, began to vanish like a mirage. But, on the other hand, there was no question of building a Middle East Raj in the way that the British had made an Indian empire: with its own army, administration, ideology and political tradition. Quite apart from the promise of accountability to an incipient League of Nations – under the mandate system – any such evolution was completely blocked by the harsh realities of financial control. In the Middle East, the main cost of such Raj-making would have fallen not on the locals as had happened in India, but on London and the taxpayers at home. But, there, the demand for demobilisation and retrenchment grew stronger every week.

In these conditions, local resistance to foreign rule spread rapidly across the region. In the Arab lands it was centred on Damascus, where a pre-war movement had sprung up among the notables against the growing assertiveness of the Turkish authorities.
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Here, the notables looked forward to an independent ‘Greater Syria’, uniting much of the Fertile Crescent (including Palestine) in an Arab state of which the Hashemite prince Feisal would be the nominal head.
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French over-rule and a ‘Jewish commonwealth’ in Palestine were fiercely rejected. As the hope of freedom receded, and the French mandate grew more certain, the Syrian leaders issued a despairing proclamation of Arab independence in Syria, Lebanon, Palestine and Iraq. Four months later, the French army scattered a Syrian militia and occupied Damascus. In Palestine, where late Ottoman rule had strengthened the position of the Arab notables in Jerusalem and extended their influence on the countryside,
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the prospect of colonial-style rule and sharing power with a Jewish settlement was even less welcome. A ‘Palestine Arab Congress’ voted in favour of joining Syria in 1919, there were rumours of armed resistance and in the spring of 1920 protests against the Balfour Declaration spilled over into violence against Jews. Worst of all (from the British point of view) was Iraq. By mid-1920, the occupation regime was surrounded by enemies. In the Kurdish north, its authority was fragile. In Baghdad, the Sunni notables, encouraged from Damascus, plotted against rulers who excluded them from power even more than the Ottomans.
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In the tribal zones of the centre and south, where much of the war had been fought, the British were resented as the gatherers of tax and the breakers of custom. In July, the revolt broke out in earnest. At the end of the month, Arnold Wilson, the Civil Commissioner, told London that ‘our military weakness is so extreme’ that the Euphrates valley might have to be abandoned. ‘An Arab state…may yet come to pass but it will be by revolution not by evolution.’
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The British garrison of 35,000 (its bayonet strength) was pinned down, unable to move beyond the railheads except in a force too small to be safe.
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As their losses rose and costs soared, ministers in London began a furious debate on whether to pull back to Basra in the south or withdraw from the country altogether.