Empire: The Rise and Demise of the British World Order and the Lessons for Global Power (60 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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The wartime alliance with the US was a suffocating embrace; but it was born of necessity. Without American money, the British war effort would have collapsed. The system of Lend-Lease whereby the US supplied her Allies with arms on credit was worth $26 billion to Britain, around a tenth of total wartime output. This was roughly double what Britain was able to borrow from the dominions and colonies. As one American official put it succinctly, America was a ‘coming power’, Britain a ‘going power’. The British officials sent to negotiate with their American creditors in Washington therefore found themselves in the position of humble supplicants. It was a position that did not come naturally to the leading figure in the British delegation, John Maynard Keynes.
Keynes was the greatest economist of the twentieth century, and he knew it. In London everyone – Churchill included – was in awe of his great brain, its brilliance undimmed by the heart disease that would soon kill him. But when he met US Treasury officials in Washington, it was a different story. To the Americans, Keynes was ‘one of those fellows that just knows all the answers’. Keynes couldn’t stand them either.
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He disliked the way American lawyers tried to blind him with jargon – speaking (as Keynes put it) ‘Cherokee’. He loathed the way the politicians would answer phone calls in the middle of meetings with him. Above all, Keynes detested the way the Americans sought to take advantage of Britain’s financial weakness. In his own stark image, America was trying to ‘pick out the eyes of the British Empire’. Nor was he alone in feeling this way. One of his colleagues commented bitterly: ‘A visitor from Mars might well be pardoned for thinking that we were the representatives of a vanquished people discussing the economic penalties of defeat’.
These were in fact typical reactions to the rapidly changing balance of power. With few exceptions, the British political elite, unlike the mostly socialist intellectual elite, found it extraordinarily hard to accept that the Empire had to go as the price of victory. In November 1942 Churchill thundered that he had not become the King’s First Minister ‘in order to preside over the liquidation of the British Empire’. Even the Labour Home Secretary Herbert Morrison compared the idea of independence for some British colonies with ‘giving a child of ten a latch-key, a bank account and a shot-gun’. But Britain’s own bank account made it clear that the game was up. Once Britain had been the world’s banker. Now she owed foreign creditors more than $40 billion. The foundations of empire had been economic, and those foundations had simply been eaten up by the cost of the war. Meanwhile, the 1945 Labour government had ambitions to build a welfare state, which could only be afforded if Britain’s overseas commitments were drastically reduced. In a word, Britain was bust – and the Empire mortgaged to the hilt.
When a firm goes belly-up, of course, the obvious solution is for the creditors to take over the assets. Britain owed billions to the US. So why not simply sell them the empire? After all, Roosevelt had once joked about ‘taking over the British Empire’ from its ‘broke’ masters. But could the British bring themselves to sell? And – more importantly perhaps – could the Americans bring themselves to buy?
The Transfer of Power
 
There was something very British about the Suez Canal military base, which covered an area the size of Wales and in 1954 was still home to around 80,000 troops. There were ten lavatories on El Quantara railway station: three for officers (one each for European, Asiatic and Coloured users), three for warrant officers and sergeants of each race, three for other ranks of each race and one for the small number of servicewomen. Here at least, the old imperial hierarchy lived on.
But at the American Embassy in Cairo, the atmosphere was rather different. The ambassador Jefferson Caffery and his political adviser, William Lakeland, were impressed by the young army officers who had seized power in Egypt in 1952, particularly their leader, Colonel Nasser. The Secretary of State, John Foster Dulles, agreed. When Nasser pressed the British to speed up their withdrawal from Suez they did not discourage him. In October 1954 the British at last agreed to begin the phased evacuation of the base; by the summer of 1956 the last of their troops had gone. However, when Nasser proceeded to nationalize the Canal – in which the British government retained the substantial shareholding originally acquired by Disraeli – British restraint cracked. ‘What happens here [in Egypt]’, Churchill had declared in 1953, ‘will set the pace for us all over Africa and the Middle East’. This would prove to be only too true. Convinced that he was dealing with the Hitler of the Middle East, Anthony Eden, now Prime Minister, determined to strike back against Nasser’s ‘piracy’.
For their part, the Americans could not have been much more explicit about their opposition to a British intervention in Egypt. They had been prepared to exert financial pressure on Nasser, by threatening to cancel their financial support for the new Aswan Dam. But an 1882-style military occupation was another matter: that, they feared, would have the effect of driving Arab states into the Soviet camp. Unilateral action in Egypt or anywhere else, warned Dulles, would ‘tear the free world coalition to pieces’. As President Eisenhower later asked: ‘How can we possibly support Britain ... if in doing so we lose the whole Arab world?’ Such warnings went unheeded. On 5 November 1956 an Anglo-French expedition landed on the Canal, claiming that they were peacekeepers trying to pre-empt an Israeli-Egyptian war.
Nothing could have revealed Britain’s new weakness more starkly than what happened next. First, the invaders were unable to prevent the Egyptians from blocking the Canal and disrupting the oil shipments through it. Then there was a run on the pound as investors bailed out. Indeed, it was at the Bank of England that the Empire was effectively lost. As the Bank’s gold and dollar reserves dwindled during the crisis, Harold Macmillan (then Chancellor of the Exchequer) had to choose between devaluing the pound – which would, he warned, be a ‘catastrophe affecting not merely the British cost of living but also ... all our external economic relations’ – or asking for massive American aid. The latter option put the Americans in a position to dictate terms. Only after Eden agreed to leave Egypt unconditionally did Eisenhower arrange a billion-dollar rescue package from the IMF and the Export-Import Bank.
The American refusal to sanction Nasser’s overthrow proved to be a mistake. Nasser continued to flirt with the Soviets; indeed, soon it was Eisenhower who was accusing him of trying to ‘get control of these petroleum supplies to get the income and power to destroy the Western world’. Nevertheless, Suez sent a signal to nationalists throughout the British Empire: the hour of freedom had struck. But the hour was chosen by the Americans, not by the nationalists.
The break-up of the British Empire happened with astonishing – and in some cases excessive – speed. Once the British had made up their minds to get out, they aimed to catch the first boat home, regardless of the consequences in their former colonies. In the words of the Labour Chancellor Hugh Dalton: ‘When you are in a place where you are not wanted, and where you have not got the force to squash those who don’t want you, the only thing to do is to come out’.
This had its disadvantages. In their haste to get shot of India, they left behind a chaos that almost undid two centuries of orderly government. Originally, the government had intended to leave India by the second half of 1948. But the last Viceroy, Lord Mountbatten,
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indulged his lifelong fondness for acceleration by bringing forward the date for independence to 15 August 1947. He sided openly with the Hindu-dominated Congress against the Muslim League,
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a preference the more surprising (or perhaps not) given Lady Mountbatten’s affair with the Congress leader Jawaharlal Nehru. In particular, Mountbatten put pressure on the supposedly neutral Boundary Commissioner, Sir Cyril Radcliffe – cruelly mocked at the time by W. H. Auden – to make critical adjustments in India’s favour when drawing the frontier through the Punjab. The ensuing wave of bitter inter-communal violence left at least 200,000 and perhaps as many as half a million people dead. Many more were uprooted from their homes: in 1951 around seven million people, one in ten of Pakistan’s total population, were refugees.
In Palestine too the British cut and ran, in 1949, bequeathing to the world the unresolved question of the new state of Israel’s relations with the ‘stateless’ Palestinians and the neighbouring Arab states.
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It was not until after Suez, however, that the dominoes really began to fall.
In the immediate post-war period, there had been various grand designs for a ‘new’ Empire. The Foreign Secretary, Ernest Bevin, was convinced that the road to domestic economic recovery began in Africa. As A. H. Poynton of the Colonial Office told the United Nations in 1947:
The fundamental objectives in Africa are to foster the emergence of large-scale societies, integrated for self-government by effective and democratic political and economic institutions both national and local, inspired by a common faith in progress and Western values and equipped with efficient techniques of production and betterment.
 
There was a new Colonial Development Corporation and an Overseas Food Corporation, and marvellous-sounding schemes for growing groundnuts in Tanganyika and producing eggs in the Gambia. The Crown Agents travelled the world, selling old British trains and boats to any colonial government that could pay and some that could not. There were ambitious plans for the federation of West Indian colonies; of East Africa; of the Rhodesias and Nyasaland; of Malaya, Singapore, Sarawak and Borneo. There was even talk of a new building for the Colonial Office. The old Empire meanwhile continued to attract a steady stream of migrants: from 1946 until 1963 four out of five emigrants leaving Britain by sea went to Commonwealth countries.
This imperial renaissance might have led further if the United States and Britain had made common cause, for American backing was the
sine qua non
of imperial recovery. The first post-war Prime Minister, Clement Attlee, certainly saw the need for it. ‘A modest little man with a great deal to be modest about’, as Churchill rather unfairly put it, Attlee was nevertheless the more realistic of the two about Britain’s future. He recognized that the new military technologies of long-range air power and the atomic bomb meant that ‘the British Commonwealth and Empire is not a unit that can be defended by itself ... The conditions which made it possible to defend a string of possessions scattered over five continents by means of a fleet based on island fortresses have gone’. As he argued in March 1946, it was now necessary to ‘consider the British Isles as an easterly extension of a strategic arc the centre of which is the American continent more than as a power looking eastwards through the Mediterranean and the East’.
There were in fact many places where the Americans and British successfully cooperated in the post-war period. In Cyprus, Aden, Malaya, Kenya and Iran, British rule was essentially ‘underwritten’ by the US. This reversal of policy reflected the Americans’ growing awareness that the Soviet Union posed a far more serious threat to American interests and ideals than the British Empire. ‘When perhaps the inevitable struggle came between Russia and ourselves’, one American official had observed even before the Cold War began, ‘the question would be who are our friends ... those whom we had weakened in the struggle, or those whom we had strengthened?’ Maybe there was something to be said for British imperialism after all. Thus the American General Board of the Navy and the Joint Chiefs of Staff Strategic Survey Committee both agreed that the British network of military bases could provide a useful complement to their own. All this made Bevin bullish:
Western Europe, including its dependent overseas territories, is now patently dependent on American aid ... [whereas] the United States recognizes that the United Kingdom and the Commonwealth ... are essential to her defence and safety. Already it is ... a case of partial inter-dependence rather than of complete dependence. As time goes by (in the next ten to twenty years) the elements of dependence ought to diminish and those of inter-dependence to increase.
 

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