Darwin J. The Empire Project. The Rise and Fall of the British World-System, 1830-1970
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415 / Making imperial peace, 1919–1926
wave of paternalism, humanitarian causes, including education and
anti-slavery, attracted fresh attention if not more resources. Extending
self-government (however gradually) to the non-white colonies meant
that cultural sympathy across racial lines had become more urgent. In
E. M. Forster’s A Passage to India (1924), the stilted parochialism of
‘Anglo-India’ and its cold rejection of educated Indians was held up to
ridicule and proclaimed as a warning.
The strongest emotion in this age of flux was the fear of com-
mitments and the urge to save. This was hard to square with the leftover
business of the First World War. The political turbulence of the post-
war years arose from this conflict. The Lloyd George government faced
a huge agenda: in Europe, at home, and in Ireland as well as in the
imperial sphere in India, Egypt and the Middle East. On almost every
issue it faced fierce dissent, some of the bitterest from its backbench
supporters in the House of Commons. Over Ireland particularly, Lloyd
George’s readiness to negotiate with Sinn Fein (from July 1921) enraged
the ‘die-hards’ in the Conservative party. Signs of compromise in the
treatment of ‘extremists’ in India and Egypt (like the failure to arrest
Gandhi) strengthened die-hard claims of the ‘empire in danger’. It was
Lloyd George’s misfortune that some of the credit he gained from the
Irish treaty in December 1921 was devalued by the civil war between
the Irish ‘treatyites’ and ‘anti-treatyites’. But the real cause of his down-
fall in October 1922 was the lack of economic recovery at home and
the sense of over-commitment abroad. Working-class discontent over
unemployment and pay was matched by middle-class anger at the high
rate of taxation (income tax had risen to five shillings (25 per cent) in
the pound in 1917, and was at six shillings (30 per cent) throughout
1919–22). Government ‘waste’ became the target of a public campaign
and had to be appeased by a formal enquiry (the ‘Geddes axe’). The
military cost of British control in Iraq (partly perhaps because Winston
Churchill, a coalition Liberal, was the minister responsible) drew espe-
cially bitter complaint from the Conservative backbenches, on whose
support the coalition cabinet was overwhelmingly dependent. It was
the lightning rod for unease over a Middle East policy whose aims
seemed obscure and whose outcome uncertain. When the British force
at Chanak in the Dardanelles faced the Turkish army advancing north
from Izmir in September 1922, and military conflict seemed likely, two
streams of discontent were united. Whatever the merits of its case –
the strategic argument for preventing the Turks from recovering the
416 / ‘The great liner is sinking’
Straits – the coalition government had risked a new war in the Middle
East for which public opinion was quite unprepared.
146
When Bonar
Law (who had favoured coalition in 1918 and been Lloyd George’s
loyal lieutenant until 1921) came out of retirement to lead the Con-
servative revolt against continued partnership with the Lloyd George
Liberals, he could draw on multiple sources of Tory resentment. But
it was the over-extension of British power that he chose to emphasise.
Britain, he said in a famous phrase, ‘cannot alone act as the policeman
of the world’.
147
The fall of Lloyd George opened two more years of party
manoeuvre, induced in the main by economic uncertainty. The Con-
servative ministry of Bonar Law (until May 1923) and Baldwin was
dominated by the setback to European recovery, by the need to cut
spending and by the fear that Lloyd George would build a new coali-
tion against its economic failure. Baldwin’s sudden leap to protection
was intended to offer a definite programme and unite his party round
the cause to which much of it was already loyal. It was an electoral
disaster. In December 1923, the Conservative vote held up well (at
38.1 per cent compared with 38.2 per cent in November 1922),
but Baldwin was swept away by the Free Trade opposition. But the
result was inconclusive. A minority Labour government took power
with Liberal support in January 1924. Neither circumstance, inclina-
tion, nor, perhaps, talent, could make Ramsay MacDonald a second
Gladstone.
148
No great centre-left party emerged in a grand realignment
of political forces. When MacDonald was pulled down by the petty
scandal of the ‘Campbell case’, and by public suspicion of his party’s
communist ties (the Zinoviev letter), it was Baldwinite Conservatism
that won the high ground electorally. In October 1924, it gained a deci-
sive victory. With the long-awaited revival of European prosperity, and
the return in Britain of a ‘social peace’,
149
the domestic instability of
the post-war years seemed a thing of the past.
Yet it had left its mark on the British role in their imperial sys-
tem. Baldwin’s aim was a broad-based party that would annex the cen-
tre in British politics. He renounced protection and installed a free trade
Chancellor (Winston Churchill). He embraced ‘economy’ in defence,
partly to fund the rising cost of welfare expenditure. He had learnt
from Chanak to fear confrontation abroad as a hostage to fortune. He
and other leading Conservatives accepted much of the ‘liberal’ outlook
on international affairs, as a rough approximation to informed opinion
417 / Making imperial peace, 1919–1926
and as a useful guide to the post-war world. As a result, the imperial atti-
tudes of the post-war years seem curiously tepid. At another time, high
unemployment, a vast new electorate and the nationalist revolts against
imperial rule might have prompted the embrace of a jingo populism.
Indeed, tariff reform at home, ‘splendid isolation’ abroad, opening up
the ‘undeveloped estates’, and a firm way with ‘agitators’, all had their
advocates in Conservative ranks. But the overwhelming need was to
bind the new political nation to an economic order (capitalism) it had
no reason to like. An attack on free trade (as Baldwin discovered) would
be deeply resented by the new constituency. Pre-war-style thinking on
imperial defence – as if Britain were still surrounded by rival world
empires – was (or seemed) obsolete at a time when the reconciliation of
Europe was the most immediate need and competing imperialisms at an
unusually low ebb. Coercive tactics against colonial (or semi-colonial)
dissidents in the Empire, Egypt, Iraq or China could not be ruled out.
But their likely cost, and the fear that they would lead to political
extremism and guerrilla war (the ‘Irish syndrome’ frequently invoked
after 1921) gave an added premium to emollient policies. To a much
greater extent than before 1914, the demands of empire on society at
home were to be monitored closely and reduced to the minimum. What
sort of empire that made in the age of depression the following chapter
will try to explain.
10
HOLDING THE CENTRE, 1927–1937
Until the mid-1920s, it had seemed as if the profound dislocation of eco-
nomic and political life unleashed by the war would defeat all attempts
to devise a new equilibrium. After 1925, the outlook improved. A
new economic order took shape in Europe, underwritten by the flow of
American investment. Franco-German reconciliation lifted the threat of
a new European struggle. The impetus behind anti-colonial nationalism
slackened off. The world economy recovered the vigour of its pre-war
decade. The volume of trade surpassed the levels of 1913.Astheageof
extremes receded, liberalism and ‘moderation’ seemed in the ascendant.
But it proved a false dawn. In October 1929, the Wall Street ‘crash’
signalled the return of economic uncertainty, followed soon after by
the huge fall in commodity prices, the sharp contraction of trade, deep
rural impoverishment and mass unemployment. The crisis of capital-
ism became the crisis of liberalism. The survival of nations and their
internal stability demanded illiberal solutions: protection, autarky, or
aggressive imperialism (to those with the means); a retreat to the land,
exiguous self-sufficiency, or desperate rural rebellion to those without
power. In culture, as in trade, free exchange was devalued in so hos-
tile a climate. Utopianism, despair and nostalgia were its more typical
products.
This massive upheaval in global conditions held huge implica-
tions for the British world-system. In the late 1920s, its liberal apol-
ogists had talked of a ‘third British Empire’, based not on rule but
on the growth of cooperation and partnership in a world-spanning
‘Commonwealth’.
1
Less liberal politicians looked forward to a period
of political calm in which ‘nationalist’ demands in India, the dominions
and elsewhere would be soothed by the concession of greater autonomy,
and disarmed by the knowledge that secession or exit from the imperial
419 / Holding the centre, 1927–1937
embrace was self-defeating at best. The geopolitical scene was benign.
The risks of devolution declined and the costs of defence fell as the
threat of armed conflict receded. Despite the heavy burden of war debt,
the great revival of trade promised the gradual return of Britain’s old
role as the merchant, shipper, insurer and banker to much of the world,
and the entrepot of its commerce. Britain remained the one great free
trading power, just as it had been before 1914. Even British migration
(now almost entirely to Empire destinations) picked up to the levels of
the 1890s, if not to the great rush of 1900–14.
2
But all this was the
prelude to a great reversal of fortune.
From 1929 onwards, the British system was caught up in
the world’s economic and geopolitical earthquake. Almost all the
conditions on which its wealth and safety depended now looked much
more uncertain. The threat of a great power assault on British interests
or territory, a remote possibility before 1930, became increasingly
real and imperial defence a more arduous task. The contraction of
world trade, the ever-higher walls of protection, and the renewed war
between currencies, wrecked the hopes of British exporters and shrank
the ‘invisible income’ which made up the deficit on the balance of
trade. Britain’s wealth and prosperity, the core of its power, seemed to
be dwindling away. As economic catastrophe loomed over much of the
world, the virus of nationalism (as opinion in Britain was inclined to
see it) spread wider and deeper. It infected the great powers on whose
mutual restraint the British system relied – if the costs of defence were to
be kept within bounds. It encouraged the attack on foreign property and
trade which the British (with more of both to lose than anyone else) had
good reason to dread. Nationalist ideology corroded the ‘steel frame’
of colonial rule, challenged its systems of political influence and drove
it willy-nilly into costly coercion. As geopolitics, economics and nation-
alism converged, Britain’s loose-knit empire, far-flung, ill-defended and
so reliant on trade, looked like a hostage to fate. Secure in its ‘Antonine
Age’ only twenty years earlier, by the mid-1930s the British system
seemed plunged (to some observers at least) in a terminal crisis. ‘The
storm clouds are gathering’, Churchill told the Conservative party in
December 1934, ‘others are ready and waiting to take our place in the
world.’
3
There were plenty of those who for partisan reasons foretold
the early demise of British world power. Expectant Marxists, frustrated
nationalists and embittered imperialists all wrote its obituary. Even
420 / ‘The great liner is sinking’
sympathetic observers, peering in from outside, were deeply alarmed.
‘England is beset by manifold dangers’, wrote the German jurist,
Herman Kantorowicz, in a book first published (in German) in Novem-
ber 1929. ‘The economic foundation of her greatness grows narrower
from day to day.’
4
The Americans were richer, the Germans better
trained, even the Russians more numerous. Britain’s industries were
outdated, its workforce overpaid, the recourse to tariffs a delusion. In
the age of the aeroplane, it was no longer an island, and was too small
geographically to be an effective air power. The British were also the
main object of Muslim and Asian resentment, and the ‘colonial epoch’
was on its last legs. ‘In this age of nationalism, it will be impossible to
hold India’; Iraq and Egypt were already slipping the leash. Deprived
of its empire, Britain would decline ‘into a second Holland’. Much
of Kantorowicz’s warning was echoed by Andr
´
e Siegfried, a French
political scientist of unrivalled prestige. In England’s Crisis (1931), he
emphasised industrial obsolescence, an unsustainable standard of liv-
ing and the falling away of British foreign investment as the seeds
of economic decline. The British depended upon international trade:
they had no choice in the matter. Protection would do them no good.
But economic nationalism posed a deadly threat. ‘Caught between a
“Fordised” America and a “cartelised” Europe, [Britain] will even-
tually have to enter an international economic alliance.’
5
It was not
strong enough to preserve a worldwide influence and ‘stand alone as
before’.
For much of the decade after 1929, British leaders struggled
to contain the effects of geopolitical change, economic depression and
nationalist politics. For much of the time, they saw themselves as con-
fronting the centrifugal forces that were pulling their system apart.
Their aim, so far as consistent purpose can be seen, was to hold the
centre: against the threat of strategic defeat, economic implosion or
social upheaval. They wanted Britain to remain, so far as it could, at
the centre of world trade. They were determined to keep it in its cen-
tral position in its own world-system, by hook or by crook. They were
also anxious to soften the social conflict at home that high unemploy-
ment might bring. But there was a limit to what they could achieve
on their own. In the self-governing dominions, preserving the ‘British
connection’ in more straitened conditions required the support of local
political leaders acutely aware of their own public opinion. In India it
was caught up in the four-cornered struggle between the Raj’s ‘steel
421 / Holding the centre, 1927–1937
frame’ of British officials, the Congress politicians, the Muslims and
the princes. London’s survival as a centre of world trade would turn
on how well it adapted to the new global economy of blocs, tariffs and
barter. But what mattered most was beyond British control. The fate of
their system, British leaders were beginning to learn by the late 1930s,
might really depend on the unsated ambitions of the ‘have-not’ powers –
Germany, Italy and Japan – and their inscrutable leaders.
Imperial defence
Before 1930, there had been good grounds for thinking that the British
world-system had entered a phase of exceptional freedom from exter-
nal assault. In no previous period since the 1880s, when the age of
‘world politics’ began, had British interests (or those of the dominions)
appeared less exposed to the threat of a great power attack. Of course,
it was true that mutual suspicion still governed the conduct of great
power relations. There was much British resentment at the gratuitous
expansion of the American navy (as it seemed in London) and the sym-
bolic dethronement of the Royal Navy’s supremacy that they had been
forced to concede. Periodic tensions with France evoked the reminder
that, in European terms (and especially in air power), the French would
be a formidable enemy. The Italians were an irritant when they jos-
tled and threatened on the frontiers of Egypt, and cast covetous eyes
on Ethiopia and Yemen. The subversive activity of the Soviet Union,
whose red hand was seen in the growth of working-class militancy in
both Europe and Asia, attracted much official attention. Russian agents
were credited with anti-British activity in the Middle East (in Iran) as
well as in China. The old imperial bogey of the Russian menace to
India via the Northwest Frontier took on a new ideological meaning.
The growth of Japanese power, bluntly restrained by Anglo-American
pressure in 1921–2, required a watchful presence if Britain’s large inter-
ests in East Asia were not to be squeezed. Indeed, the British suspected
that Japan and the Americans were both happy to see British interests
bear the brunt of the Chinese nationalist attack on foreign privilege that
was growing in virulence after 1925.
Yet this pattern of friction was actually quite reassuring. For
what it revealed was that the most dangerous connections in pre-war
international diplomacy had fallen apart. Before 1914, the British had
422 / ‘The great liner is sinking’
seen their main danger in the German domination of Europe. They
relied by default on the alliance of Russia and France, and on win-
ning the arms race against German naval expansion. Maintaining the
European balance of power had been the main pillar of empire defence.
But its far-reaching demands had been increasingly felt in every vicin-
ity where European interests competed, in the Middle East and East
Asia especially. Almost no local matter could be settled without refer-
ence to its effect on the European balance: and great power relations
in Europe, with its high-voltage circuits of rumour and fear, quivered
with the shock of remote detonations and consular outbursts on far-
away bunds. The ghastly outcome of this ‘old diplomacy’ had revealed
the fine thread upon which Britain’s security (and imperial defence)
had really been hung. But, once European peace had been assured
at Locarno by the Franco-German reconciliation, Europe’s balance of
power was no longer the key to the peace of the world. Soviet Russia
was isolated and geostrategically weak. Japan was much stronger in its
own sphere in East Asia, but had almost no prospect of finding a friend
among the other great powers. The result was a ‘de-linking’ of the
regional conflicts so dangerously linked up before 1914 – to Britain’s
great strategic advantage. With a navy that was more than equal under
the Washington terms to those of France and Italy combined, and much
stronger than Japan’s, the British had little to fear from a Mediterranean
dispute, or a Japanese attack on their interests in Asia, and no reason
to fear that they might coincide. There was no likely combination of
powers to prevent them from holding their own in Europe, the Middle
East, the Indian Ocean or East Asia, nor from applying their power in
the theatre they wanted and at the time of their choosing. It was not
simply that the British were the one global power: no coalition against
them had any chance of cohering.
This highly favourable turn owed a great deal to the path of
American power. The British approached this leviathan with a volatile
mixture of admiration, mistrust and judicious appeasement. Britain is
faced, remarked a senior Foreign Office official (with an American wife)
in late 1928,
with a phenomenon for which there is no parallel in our
modern history – a State twenty-five times as large, five
times as wealthy, three times as populous, twice as
ambitious, almost invulnerable, and at least our equal in
423 / Holding the centre, 1927–1937
prosperity, vital energy, technical equipment and industrial
science. This State has risen to its present stage of
development at a time when Great Britain is still staggering
from the effects of the superhuman effort made during the
War, is loaded with a great burden of debt and is crippled
by the evil of unemployment.
6
As Craigie’s memorandum suggested, the American challenge
to Britain’s commercial and industrial power was just as potent as that
to its maritime primacy. But, if yielding naval supremacy still stuck in
the admirals’ craw, and if the American ‘style’ in diplomatic exchange
seemed designed to annoy, the transatlantic ‘phenomenon’ had done
little real damage to British world interests. Perhaps the reverse. It was
American capital (as we saw in the last chapter) that had smoothed the
path of European peace, but without exacting the price in diplomatic
allegiance another great power might have sought. America’s maritime
might, scaled against Britain’s, was in practice deployed against the
power that was thought to threaten them both. From 1922 onwards,
the bulk of the United States Navy was placed in the Pacific.
7
While
‘War Plan Red’ (for an Anglo-American war) gathered dust, ‘War Plan
Orange’ (against Japan) was real. Anglo-American tensions remained.
They were fuelled by the old quarrel over ‘belligerent rights’: whether
a naval blockade (the British weapon in a European war) could be
used to prevent the traffic of ‘neutral’ (in practice American) trade;
and by American pressure for a further reduction of fleet strengths.
In London, governments of both parties accepted the case for a new
naval agreement. The London Naval Conference of 1930 preserved
the existing distribution of maritime power (including that of Japan),
extended the ‘holiday’ in battleship building until 1936, averted the
threat of a race to build cruisers, and restored good relations across the
Atlantic.
8
As it turned out, the conference was the swan song of the short
golden age of post-war security. The lowering background to the naval
agreement had been the deepening crisis in the world economy. The
storm broke in East Asia. The acute dependence of Japan on over-
seas trade, Japanese fears of exclusion from their markets in China
(as Kuomintang rule was extended), and their long-standing suspicion
of British and American commercial designs in East Asia, created an
aggressive and panicky mood in Japanese politics.
9
When the full force
424 / ‘The great liner is sinking’
of depression was felt in early 1931, and with it the threat of vio-
lent social unrest, civilian politicians lost control of the army. China’s
huge northern province of Manchuria had been a target of Japanese
economic penetration since before 1914. The ‘South Manchurian Rail-
way’, its large ‘railway zone’, and the colonial army based on the Kwan-
tung peninsula, were the means through which their regional power was
asserted. In September 1931, perhaps to pre-empt future resistance from
the migrant Chinese now flooding into Manchuria,
10
Japanese officers
exploited a trivial fracas to impose the ‘Kwantung’ army’s control over
the whole of the province, to which their colleagues at home extracted
Tokyo’s assent. It was a gross contravention of the Washington treaties
(the post-war charter of East Asian security), a massive infringement of
China’s territorial integrity and (not least) an obvious breach of Japan’s
obligations as a member of the League.
There was thus every reason for a fierce British reaction. The
restraint of Japan had been a key part of the post-war peace settlement.
It meant a great deal to the Pacific dominions, whose fear of Japan was
tightly bound up with their racial exclusiveness as white British soci-
eties. Among the Western powers with a stake in China’s economy, the
British had the most to lose – with much more in investment and trade
than the United States. Of the great hub of their interests, the port-city
of Shanghai and its British-run enclave the ‘International Settlement’,
the Foreign Office had remarked that ‘no Chinese government is as yet
fit to control the destinies of a city which . . . compares with London and
New York’. Indeed, ‘whenever real danger threatens the city . . . British
interests . . . are so great that British troops must be sent to protect the
Settlement, just as though it were a British possession’.
11
Japan’s eco-
nomic imperialism was unlikely to stay far away in the north: Taiwan,
after all, was a Japanese colony, and the Japanese presence was already
strong in Shanghai. London, however, was very reluctant to take the
lead on Manchuria. ‘Avoid at all costs an open breach with Japan’
12
was the watchword of policy. This was partly because a possible armed
confrontation was extremely unwelcome at a time of enormous uncer-
tainty in Britain’s own politics in 1931–2. But it also reflected two
other constraints whose force was compelling. The first was the doubt
whether it was in Britain’s real interests to oppose Japan on Manchuria.
The British had conceded (in 1926) that their extra-territorial privileges
in China (symbolised by their treaty-port rights, in Shanghai above all)
could not be maintained against the nationalist opposition in China.