Darwin J. The Empire Project. The Rise and Fall of the British World-System, 1830-1970

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525 / The price of survival, 1943–1951

pondered British policy for the entire vast region from Greece to Iran.

The Arab Middle East as a whole, but especially Egypt, had become

a supply zone, partly ﬁlling the role that India had played in the First

World War. By 1945, the British owed Egypt some £400 million for

goods and services rendered.

With its barracks and bases, repair shops

and storage, Egypt was the arsenal of British military power as well as

the way-station through which it was shuttled en route to the East or

back ‘home’ to Europe. The practical closure of the Mediterranean to

shipping for much of the war had diminished the value of the Suez

Canal, but its importance in peacetime was expected to rise sharply.

Finally, the strategic importance of the Middle East region had been

emphasised still further by technological change. Without the Abadan

oil reﬁnery at the head of the Gulf, the British war effort across a huge

swathe of Eurasia would have ground to a halt: fear of its loss was so

great that a separate command had been created to guard it. Middle

East oil had supplied nearly one-quarter of Western Europe’s needs in

1938, a ﬁgure expected to rise sharply at the end of the war.

No one

could doubt the enormous advantage conferred by control of it. The

same could be said of Egypt’s importance as a hub of air transport. The

gruelling air journeys undertaken in wartime by British civilians and

soldiers to Moscow, Yalta, Teheran or New Delhi, or to confer with

the men on the spot, invariably took them through Cairo. The need for

air bases to link the scattered components of the British world-system,

and for an overland ‘trunk route’ between Europe and India, had long

been recognised. The colossal expansion of air power and air travel

during the Second World War (and the general assumption that a new

air age was dawning) only hammered it home.

The instinct to build on their established position was sharp-

ened by opportunity and also by fear. There were numerous signs before

the end of the war that Stalin would demand more control over the

Straits, an old Russian ambition. It also seemed likely that Russia’s mil-

itary presence in Northern Iran (part of the Anglo-Russian occupation

imposed in 1941) would be used as a lever to enlarge Russian inﬂuence.

At the same time, the British were determined that Libya should not be

restored to Italy, and that Russian claims to a share in its post-war con-

trol should be ﬁrmly resisted. Instead, it should form part of Britain’s

great arc of inﬂuence extending all round the Eastern Mediterranean,

and stretching away to the Gulf and Iran. In the three-way division of

global power that was widely predicted (China’s great power capacity

526 / ‘The great liner is sinking’

was somewhat discounted), the share of the British was bound to be

large, indeed had to be large. But the readiness to contemplate a burden

on this scale really depended on two unspoken assumptions. The ﬁrst

was that Britain would be able to bear the costs that would follow. As

we have seen, an illusion persisted until the defeat of Japan in August

1945 that American aid would fund Britain’s revival as a great trading

economy. The second assumption proved even more fragile. It was that

the British would be able to ‘manage’ the nationalisms of their Mid-

dle East client-states, and ‘rally the moderates’ by artful concessions. It

was easy to think – especially while the war lasted – that uncooperative

locals would be brought to their senses by the threat of coercion.

so divided a region with such deep social differences, it was hard to

imagine a common nationalist front strong enough to evict them.

There was one other assumption that should not be forgotten.

Since their ﬁrst invasion of Egypt in 1801, the British had counted on

India for part of the military means to exert their power in the region.

They had often been tempted to attribute their presence to the need to

defend India or uphold the prestige of its (British) government. ‘Why’,

asked Lord Curzon in 1918 (in one of those questions that only he

answered), ‘should Great Britain push herself out in these directions?

Of course the answer is obvious – India.’

It was a short step from

this to insist that what was in India’s interests should be paid for by

India, and guarded by its army. After the First World War, there had

been imperative reasons to reduce the military burden on India, then in

the throes of political upheaval and constitutional change. But, in the

Second World War, India had become once again a huge reservoir of

military manpower, and an army of two million men had been raised.

Indian divisions fought in the Middle East, North Africa and Italy as

well as in the Southeast Asia campaigns and the bloody defence of

Imphal. India was the main base from which the reconquest of Burma,

Malaya and the Dutch East Indies was launched. Yet its political future

was deeply uncertain. The Cripps Mission had failed to win Congress

support for the war. The Quit India movement that Gandhi unleashed

as a mass insurrection was crushed by the British, and large numbers of

Congress activists gaoled. Gandhi’s prison fast was a ‘ﬂop’ without the

activists’ backing.

The British ruled by decree or with Muslim support.

‘Politically the position is very easy here at the moment’, reported the

Viceroy in mid-1943 to Leo Amery, the Secretary of State.

Only one

thing was clear. The British had committed themselves irrevocably (in

the Cripps Mission ‘offer’) to full Indian self-government at the end

527 / The price of survival, 1943–1951

of the war. What that would mean for India’s role in Britain’s world-

system was shrouded in mystery.

For Amery in London, this was the key issue. ‘To keep India

within the Commonwealth during the next ten years is much the biggest

thing before us’, he told Churchill in April 1943. ‘If we can keep her

for ten years I am convinced we can keep her for good.’

Amery was

anxious to reform Indian politics while the Congress was banned. He

was eager to give the Viceroy’s Indian ministers more political inﬂu-

ence and to make them more credible as the voice of Indian opinion.

But his real objective was a drastic revision of India’s constitutional

future. Parliamentary-style government was completely unsuitable for

the Indian centre, he told the House of Commons in March 1943,

because it meant party government. The federal government should

‘emanate’ from the states and provinces. Like the Swiss executive, it

should be non-party and enjoy independence from the federal assem-

bly. Amery’s scheme was transparently obvious: a non-party executive

chosen by the units of a ‘looser’ federation much at odds with each

other would have little will to sever the British connection completely.

It would be much more likely to acknowledge India’s need for British

assistance, and much more willing to sign an Anglo-Indian treaty of the

kind London wanted. The new Viceroy Lord Wavell (1943–47) shared

Amery’s zeal for a political move and his geostrategic perspective. ‘The

future of the Commonwealth, from the defence point of view, and also

perhaps economically, will depend to a great extent on what happens

in India in the next ten years or so’, he pronounced in July 1944.

But

he and his advisers thought Amery’s scheme futile. The answer instead

lay in drawing the Congress and the Muslim League into a coalition

government for the phase of transition. But, as Wavell complained, the

will was lacking in London to push matters forward: ‘Winston had

no intention of helping it on.’

Churchill’s own view was character-

istically blunt: ‘Victory is the best foundation for great constitutional

departures’.

So India’s politics waited on victory: how triumphant a

victory remained to be seen.

Imperial Labour

Of course, it was not to be Churchill or his Conservative colleagues who

wrestled with the fate of the British world-system, or the independence

of India, when the war ﬁnally ended in August 1945.InJuly1945,a

528 / ‘The great liner is sinking’

vast electoral wave swept the Labour party to power, giving it (for the

ﬁrst time) an absolute majority in the House of Commons. This political

earthquake was widely understood to mean that British opinion was

impatient for social reform. As a ‘patriotic’ party whose leaders had

been central to the war effort at home, Labour was trusted to implement

the wartime promises on social insurance, education and employment,

as well as reorganising under public control the services and industries

whose performance was vital to economic and social recovery: the

mines, the railways and the provision of healthcare. The scale of the

task and the need to preserve the apparatus of central control were

visible in the damage suffered by almost every major city. The popular

hope that the sacriﬁces of the war would bring a fairer, more equal and

more secure society was combined with the fear that without a strong

centralised system reconstruction would be slow, inefﬁcient and unfair,

destroying in the process (as after 1918) the promise of change.

Yet it was certainly not true that the new Labour leadership

was preoccupied with domestic over external priorities, or indiffer-

ent to the requirements of British world power. The Prime Minister,

Clement Attlee, had served on the Simon Commission in 1927–30,

and was keenly concerned with the Anglo-Indian relationship. He had

wanted the Cripps Mission in 1942 to save India as ‘[Lord] Durham

had saved Canada.’

He was keen to enlist the dominions’ post-war

help especially in defence. Ernest Bevin, the new Foreign Secretary,

had been a leading pre-war trade unionist and a stout defender of the

need to protect British overseas markets. He quickly embodied an all-

but-Churchillian view of Britain’s place in the world and of the need to

defend its claims and prerogatives. This did not mean a passive endorse-

ment of the colonial status quo. Labour’s leaders had sympathised with

the vigorous attack on British colonial practice that had burst out in

the open after the fall of Singapore in February 1942. The ﬁerce cri-

tique launched by Margery Perham, the African expert and prot

of Lord Lugard, and published in The Times, lambasted the failure to

meet the aspirations of colonial peoples, to develop their economies or

to democratise their politics. Economically and socially, colonial rule

had created ‘tropical East Ends’ and promoted the colour bar, ‘an atti-

tude of mind that, at its worst, regards other races of men almost as if

they were other species’.

Perham’s strictures chimed with the dislike

of Labour’s colonial experts – whose ties were closest with mission-

ary and humanitarian interests – for white settler communities and the

529 / The price of survival, 1943–1951

reactionary ethos (as they saw it) of indirect rule, which aligned the

colonial power with chieﬂy authority against educated commoners.

A ‘progressive’ policy of social advancement and political partnership

was as much a necessity in the colonies as at home. But this reformism

coexisted with a reafﬁrmation of faith in the ‘British system’. There was

‘no ﬁxed line between Dominions and dependencies’, declared Herbert

Morrison in his Newcastle speech of January 1943. India ‘can have full

self-government for the taking’ at the end of the war. ‘We are no greedy

exploiters.’ The real burden of his speech was to warn against the ‘myth

of a self-sufﬁcient empire’, and to insist on the need for international

cooperation between all the great powers. The strongest claim of the

‘British system’ on other nations, he concluded, was that its long-term

interests were the same as those of international society as a whole.

No Victorian could have phrased it better.

Indeed, at the end of the war, there was no obvious conﬂict

between the needs of domestic reform and the task of upholding the

substance of British world power. It was axiomatic that Britain’s global

trading economy should be restored as quickly as possible to its pre-war

position (at least), and that domestic prosperity depended on overseas

markets more acutely in Britain than anywhere else in the industrial

world. The immediate need for food and raw materials could only be

met by keeping in place the wartime version of the imperial economy

with its bulk purchases from the dominions and ofﬁcial control over the

price and supply of colonial produce. The demands of war and the strin-

gent restrictions imposed under lend-lease had largely conﬁned British

trade to Empire and sterling area countries after 1940. The most prac-

tical reasons dictated the need to preserve these imperial connections

as the platform on which economic recovery could be built. From that

point of view, reforming the Empire (along the lines that Perham had

urged) – to make it more dynamic, efﬁcient and productive – seemed

a perfect combination of proﬁt and virtue. In an era of shortage, eco-

nomic growth in the colonies would supply Britain’s needs and fund

their own modernisation. Secondly, it was quite easy to believe in the

ﬁrst months of peace that the costs of remaining a great power in the

world would not be prohibitive. If the United Nations were to function

(as British leaders intended) primarily as the instrument of Great Power

cooperation between the United States, the Soviet Union and them-

selves, with tacit spheres of inﬂuence and sanctions against territorial

aggression, the crippling burden of imperial defence would become far

530 / ‘The great liner is sinking’

more bearable. It was precisely in this spirit that Attlee was to urge (in

September 1945) Britain’s military withdrawal from the Middle East.

In fact, the uncertainties soon began to pile up, and with them

the costs. The British had harboured deep suspicion of Stalin well

before the war ended. It quickly became clear that friendly recogni-

tion of Britain’s spheres of inﬂuence was not on Moscow’s agenda.

Stalin demanded a role at the Straits (as the counterpart to British

control of the Suez Canal); his army remained in northern Iran; and

Moscow laid claim to a share in the trusteeship of the Italian colonies

in Libya (the prize the British had reserved for themselves). The Soviet

Union had all the old Tsarist ambitions in the Middle East, warned the

British ambassador.

There was hardly any doubt, recorded another

senior diplomat in February 1946, ‘that Russia is intent on the destruc-

tion of the British Empire’.

Britain was being dragged willy-nilly into

confrontation with a power of awesome military strength and possibly

limitless ambitions. At the same time, it was also deeply uncertain (or so

it seemed in London) what part the United States might play in resist-

ing Soviet aggression. The rapid demobilisation of American forces,

America’s interest in exploiting erstwhile British markets and the secu-

rity conferred by its nuclear weapons, might make its leaders indifferent

at best to the survival of the British world-system, content perhaps to

carry off the spoils if it collapsed under the strain of a confrontation

with Russia. Thirdly, the failure to agree upon a peace treaty with

Germany, and the strength of communist movements in both France

and Italy (in part a reﬂection of economic distress), wrecked any hope

that Europe’s old powers would balance Soviet strength. On the con-

trary, it seemed that their divisions and weakness had opened the way

for the Soviet penetration of the south and west of Europe as much as

its east and centre.

These were worrying signs that the favourable geopolitical posi-

tion that the British might have hoped would be theirs at the end of

the war would turn into the nightmare envisaged by Smuts in 1943.

A British world-system, poised between two continental ‘superpow-

ers’ (the term was coined in 1943), might have hoped to exploit their

rivalry and exact favourable terms, economically at least, from the

United States. Instead, it was the British themselves who felt the pres-

sure of Soviet expansion. Worse still, they did so at a time when they

lacked the means to pay for the essential dollar goods needed to sustain

their domestic economy and their overseas burdens, not to mention

531 / The price of survival, 1943–1951

the programme of industrial and commercial recovery. With the lapse

of lend-lease, this became in fact the most urgent priority. Nor could

British leaders assume that the ‘internal’ politics of their imperial sys-

tem would remain passive while they grappled with its economic and

geostrategic crises. In India, the Middle East, and in the reoccupied

colonies in Southeast Asia, British authority was soon under strain.

Among the white dominions, as the wartime prime ministers meeting

had signalled, their ties with Britain were bound to be mediated by

the logic of self-interest in a world of such geopolitical uncertainty

and when Britain was no longer their ultimate geostrategic protector.

The solid British Commonwealth ‘bloc’ assumed in some visions of a

three-power world was no more than a pipe-dream.

Within a matter of weeks, then, the new Labour government

was confronted by a mass of problems so grave as to amount to a

general crisis – economic, geostrategic, political – of the British world-

system. The struggle for survival in war was succeeded by a struggle for

survival in peace. In the autumn of 1945, the immediate pressure was

eased by a dollar loan from the United States of $3.75 billion (some

£750 million). But the terms were arduous, and much more severe

than Keynes who had hoped for a gift of $5 billion (£1.2 billion) had

expected.

The British were required to dismantle the barriers that

favoured the trade between sterling area countries and to allow holders

of sterling to exchange it for dollars by mid-1947. Indeed, the United

States government saw the main purpose of the loan as being to allow

those countries who had built up large sterling credits in London to

exchange them for dollars if they wished to do so. The sterling economy

was to be blasted open to American exports. When the terms became

public, there was widespread unease (there had been much private

unease in the Bank of England and Treasury). The loan agreement

was an ‘economic Munich’, declared Robert Boothby, a Conservative

MP. However unpalatable, it could not be rejected. It was not just a

matter of averting an imminent crisis: rejecting the loan, said Dalton,

the Chancellor, ‘would mean less food of every kind except bread and

potatoes’.

British hopes of reviving their pre-war commercial and

ﬁnancial position also depended upon the breathing space that the loan

would give them. ‘The way to remain an international banker’, Keynes

told the House of Lords, ‘is to allow cheques to be drawn upon you;

the way to destroy the sterling area is to prey on it and try to live on

it. The way to retain it is to restore its privileges and opportunities

532 / ‘The great liner is sinking’

as soon as possible to what they were before the war.’

Indeed, the

early signs were hopeful: as millions of servicemen and women were

demobilised, the task of reconverting the war economy got under way.

1946 was an annus mirabilis. Exports went up, the stock exchange rose.

At the Lord Mayor’s banquet in October, the traditional venue for an

authoritative statement of the economic outlook, the Chancellor of the

Exchequer, Hugh Dalton, gave a sunny account of Britain’s progress

and prospects. The ﬂy in the ointment was the burden of overseas costs,

the very delicate balance between dollar income and spending, and

the huge size of the ‘sterling balances’, whose owners were impatient

to release them for current consumption: including India (with some

£1.3 billion) and Egypt (with £400 million).

Meanwhile, the Labour cabinet struggled on with the task of

easing the pressures on Britain’s world-system. There was little scope for

reducing their commitments in Europe while Germany’s fate remained

unresolved. No agreement was reached between the Soviet Union and

the Western Powers. That meant the continuing occupation of Germany

and meeting the desperate shortage of food in the British zone: a ‘colony’

that was costing £100 million a year.

For similar reasons – the need to

contain Soviet inﬂuence until a peace treaty was signed – aid had to be

sent to Greece and Turkey who barred the way against a Soviet advance

to the Mediterranean. In India, they hoped to forestall serious unrest

by taking the political initiative. In January 1946, Attlee pressed the

case for sending a Cabinet Mission (whose real leader was Cripps) to

settle the terms on which independence would be given. It was already

apparent that a constitution acceptable to both the Congress and the

Muslim League would be very hard to contrive, and that the leaders

of the Congress were deeply suspicious that the British would favour

Muslim demands for a balkanised India. In London, by contrast, there

was still a white hope that, by promising swift independence, a new

Indian ‘dominion’ would emerge, willing if not eager to uphold its old

British connection. Once hot heads had cooled, so the argument ran,

the Indian leaders would see that their economic self-interest, strategic

exposure (to Soviet aggression) and political ethos made alignment

with Britain the inevitable choice. With British encouragement, India

might even assume the role of a regional power, sharing with Britain

diplomatic supervision of Southeast Asia. Hence it was the primary aim

of the Cabinet Mission to ﬁnd a constitutional formula that preserved

Indian unity by hook or by crook. But their Heath Robinson scheme for

533 / The price of survival, 1943–1951

a three-tier federation (combining Hindu and Muslim ‘sub-federations’)

was also inspired by the fear that the division of India would suck

Britain into a vortex of chaos. By mid-1946, it was accepted in London

that there were no longer the means to crush an Indian mass movement:

the arm of coercion on which British rule had relied as its last resort

had withered at last.

The British were also at pains to pre-empt the local resentment

that was expected to boil up in Egypt, where their wartime occupation

had grossly exceeded the limits permitted by the 1936 treaty. Here,

too, they were hoping that a ‘generous’ offer would pave the way for

an Anglo-Egyptian agreement that would tie Cairo in to a system of

regional defence under British command. The key issue here was the

right to reactivate the bases in the Suez Canal Zone if an external

threat was detected. In May 1946, after much internal debate between

the soldiers and diplomats, the British declared themselves willing to

evacuate Egypt completely over the course of ﬁve years. There were

further disputes over how much consultation should take place between

London and Cairo before a ‘threat’ was acknowledged and the bases

reopened, and over what undertakings should be formalised in a treaty.

Then, towards the end of the year, Egypt’s old claim to its Sudanese

‘colony’ (in theory an Anglo-Egyptian condominium, in practice ruled

solely by Britain) became a fresh bone of contention. The minister,

Sidky, with whom the British were dealing, was pushed out of ofﬁce

and the negotiations collapsed.

By the end of the year, the British had little to show for their

efforts to adjust their world-system and reduce the costs it imposed –

ﬁnancial, strategic and political. It may have been this that fuelled the

persistent critique directed by Attlee towards the retention of Britain’s

large Middle Eastern imperium. Attlee had expressed misgivings about

the original plan to seek British trusteeship over Cyrenaica and Tripoli-

tania, Italy’s Libyan ex-colonies. He had warned (in February 1946)

against the cost of defence, running at twice the level expected at the

end of the war. He challenged the claim of the Foreign Ofﬁce and the

Chiefs of Staff that the Middle East was vital to Britain’s world interests.

He remained deeply committed to the idea of a ‘world organisation’,

and opposed to ‘old-fashioned’ manoeuvres and policies that might pre-

vent its fruition. Britain’s entrenchment in the post-war Middle East, he

repeatedly argued, would be regarded by Russia as a threatening move.

It would discourage Moscow’s commitment to a new international

534 / ‘The great liner is sinking’

order centred upon the United Nations and might even provoke Soviet

aggression in Europe. Nor had Britain the means to build up the weak

Middle East states against a Soviet advance. Agreement with Russia,

not confrontation, was the only safe course.

Attlee’s ideas were those of an ardent internationalist who

hoped that victory in the Second World War marked the end of the

age of predatory imperialisms, the vale of tears through which the

world had struggled since the early 1930s.

But they were not a rejec-

tion of British world power. Attlee acknowledged that the great new

fact of world politics was American power, and that the independence

of India would limit Britain’s ability to exert inﬂuence in Asia. But he

was far from writing off Britain’s claims on the loyal partnership of

the dominions or its colonial rights elsewhere in the world, especially

in Africa. At the dominion prime ministers meeting in April 1946,

he had hoped to commit them to a uniﬁed system of Commonwealth

defence but had to accept a much more decentralised formula whereby

each dominion took responsibility in its region ‘to maintain conditions

favourable to the British Commonwealth and to accept joint respon-

sibility for their defence in war’.

Britain’s vulnerability to external

attack made it wise, so he thought, to relocate certain vital industries to

the safety of Australia. And Britain’s links with the two Paciﬁc domin-

ions could be maintained by a line that ran across Africa, not through

the Mediterranean and Middle East. Embedded in Attlee’s approach

was an old not a new view of empire. Like Bonar Law, or Balfour or

many Gladstonians, Attlee regarded the Middle East as a dangerous

outpost, made even more dangerous in the era of air power. It would

be far better to make it into a neutral zone – a ‘wide glacis of desert and

Arabs’ was the phrase Dalton remembered – separating the spheres of

British and Russian predominance, than to run the risks and bear the

costs of an imperium still more extensive than that Britain had seized

after 1918.

Attlee was Prime Minister, and his comments were trenchant.

But he never came close to winning the argument, and by February

1947 had abandoned the effort. He faced the combined opposition of

the Foreign Ofﬁce and Chiefs of Staff: indeed, it may have been the

threat of the latter to resign en masse that forced him into retreat. The

central weakness of Attlee’s position was its optimistic view of Russian

intentions, justiﬁed by faith, it had to be said, rather than by works.

His proposal that the Middle East become a ‘neutral zone’ assumed