The Day the British Ruling Class Realised the Empire Was Over

England, unlike junior nations,
Wears officers’ long combinations.
So, no embarrassment was felt
By the Church, the Government or the Crown.
But I saw the Thames like a grubby old belt
And England’s trousers falling down.

Remember Suez? by Adrian Mitchell

The Decline of the British Empire

When, on the eve of the Battle of Britain in 1940 Churchill delivered his famous “Finest Hour” speech few actually focussed on the opening words of the famous sentence which started:

If the British Empire and its Commonwealth last for a thousand years men will still say this was their finest hour.

Funny that thousand years. Hitler too proclaimed that the Third Reich was the “thousand year Reich”. And make no bones about it, Churchill’s aims were no different from Hitler’s except that his thousand year Reich was to be British. Even when he said it, it was a forlorn hope. It could be argued that Churchill had not even been in charge for a thousand days when the end of the British Empire was already foretold. An arrant racist ⁽¹⁾, who described the Indians as “a beastly people with a beastly religion”, he was absolutely shocked that an “inferior” Asian people overran the great British naval base at Singapore in 1943. The Japanese wisely attacked from the land - the opposite side from where Singapore’s guns were pointed and captured 40,000 British and Commonwealth soldiers. Not for the first time in military affairs Churchill had to confess to abject failure and in his diaries he admitted that he had no idea such a feat was possible.

However in 1945 Britain was a part of the coalition which emerged victorious from the Second Great Imperialist War and the Empire Loyalists could once again congratulate themselves that only the British had withstood Hitler (even Stalin’s USSR had allied with Hitler for two years) and defended democracy and Western civilisation. This was a delusion. The First World War had begun the unravelling of the British Empire, saddling Britain with a huge (£850 million) debt to the USA. This led to sterling’s removal from the gold standard in 1919 in order to cut the trade deficit. This was reversed by Churchill when Chancellor of the Exchequer, thus ensuring that Britain would feel the full force of the Wall St Crash and in 1931 the gold standard was abandoned for ever. This was because Britain was running out of gold trying to shore up sterling which in 1931 was devalued by 30%. Britain’s answer was to turn to the Empire (or Commonwealth as the white free nations like Canada and Australia were referred to). At the Ottawa Conference in 1932 the British established a sterling bloc which had trade barriers against the outside world and demanded that all the countries of the Empire kept all currency reserves in sterling. This was called “imperial preference”. Sterling was still the number one reserve currency in the world and the earnings from this enabled Britain to maintain London’s financial hegemony. “Invisible earnings” or the rake off Britain got from this position were by far the biggest contributor to British GDP (and had been so since the 1880s).

The Second World War was, however, a far greater disaster than the First, whatever the military outcome. In the first two years of the war Britain borrowed from its imperial bloc, sold off its gold and dollar reserves, it also liquidated its overseas holdings (which were bought up by the United States) so that by 1941 all its assets were exhausted. It was only the US Lend-Lease Act which advanced loans which did not have to be repaid until after the war that avoided the bankruptcy of the state.

At the end of the war huge swathes of the country had been flattened by bombing. The British merchant marine, so long the backbone of its trading Empire, had lost three quarters of its tonnage. Debts to the USA were now even more colossal at $30 billion and on top of it the USA had taken over many British assets and spheres of influence as a quid pro quo for US assistance. On top of this Britain not only had an Empire to police but was saddled with occupying Germany (occupation of European territory was something the British had historically tried to avoid). When British economists (headed by no less a figure than Keynes) went to the USA in 1946 they soon found how long wartime alliances last. When Keynes (who had been one of the architects of the International Monetary Fund) tried to negotiate a $3.75 billion loan from the same Fund the US argued that it could only be made if, within one year, the British broke up the sterling bloc, abandoned imperial preference and opened up the Empire to US goods. The US knew that Britain could hardly function without such a loan and the struggle to get it literally killed Keynes. It is strange that the idea of the “special relationship” has survived so much in the face of such facts but then there is a streak in the British ruling class which considers that the US is simply the inheritor of the British mission to civilise the world. Churchill (whose own mother was American) advocated joint citizenship between the two countries on more than one occasion whilst Tory historians like Niall Ferguson dwell on the civilising glories of the British Empire in the past to justify the hegemony of the US in the present.

The Egyptian Issue

The lines of the new post-war world were thus taking shape and the arrival of the Cold War meant that the British ruling class, however detestable it found the new US dominion them, to swallow it. In 1947 when the Greek Communists revolted against their reactionary monarchy, aided by Tito in Yugoslavia, the British could not defend the Greek monarchy, and called in the US. This gave birth to the Truman Doctrine which basically announced that the US would be the West’s gendarme. In the same year the Indians whom Churchill had so despised finally achieved independence, and the British beat a hasty retreat out of Palestine in the face of Jewish terrorists the year after. Sterling was devalued another 31% in 1949. However, Britain developed the atom bomb, saw off an insurgency in Malaya and played a significant role in the Korean War (although no one asked what British interest the Korean War ever served) so the illusion that there was still a “Great” in Britain continued. When Churchill returned to power in 1951 all the failures of the previous years could be put down to the wimpishness of the Labour Government.

Suez was to change all that. Churchill resigned in 1955 and was replaced by Anthony Eden. Eden was immediately faced by the developing conflict with Egypt. Egypt had been a British colony from 1882 until 1922, and then remained a virtual colony under a corrupt monarchy until 1952. In that year a military coup brought a group of army officers known as the Revolutionary Command Council to power. The British puppet King Farouk was allowed to escape to a luxurious exile and by 1953 Gamal Abdul Nasser had become the President of the Egyptian Republic. At this point as so often happens the regional conflict and the imperialist interests became intertwined. The Israelis, having defeated the Arab Legion (itself a feeble creation of the British) in 1948, saw the new regime in Egypt as a far more dangerous threat. Nasser, for his part realised that the Egyptian armed forces were too weak and ill-equipped to do much about Israeli reprisals against Egypt. In September 1955 he bought Soviet aircraft and tanks from Czechoslovakia. It was a defining moment. In London and in Paris Nasser’s regime was seen as the source of all the destabilisation in their African Empires (Britain was fighting the Mau Mau in Kenya and the Algerian rebellion was underway against a France still smarting from the defeat of Dien Bien Phu in Vietnam). When Nasser further recognised Communist China and embraced neutralism at the Bandung Conference of that year the US also began to have serious worries about the regime in Cairo (the US viewed neutralism as a step towards the USSR - George Bush did not invent the idea that if your are not with us “you are agin us”).

The west had one card left to play - the Aswan High Dam. This project was the most significant development for the Egyptian economy since the Pharoahs. A new dam to control the Nile would enable the cultivable area in Egypt to increase by 30%. The IMF agreed to fund the dam if the US and Britain would make further loans. The US and Britain imposed heavy conditions which would have given them some control over the Egyptian economy for years. Nasser hesitated but when he finally decided to accept the US pulled the plug on the deal saying the Egyptian economy was too unstable. On the fourth anniversary of the so-called Egyptian Revolution, 26th July 1956 Nasser announced the nationalisation of the Suez Canal. In the words of one sober history of the Middle East:

The entire Third World was thrilled. There existed no more potent symbol of Western colonial domination than the Suez Canal. But there was apprehension about the consequences - the West would surely not allow Nasser to succeed. ⁽²⁾

The Debacle of the Old Empires

For three months it appeared that nothing was happening. The British wanted some international control over the canal (which had actually been formally controlled by a French company even if the British had major shares in it ever since Disraeli had bought the Khedive of Egypt’s shares for $5 million in 1875) but as the US was not interested in any military threat to enforce this the plan came to nothing. In the later summer the British press poured out a river of invective against Nasser whilst Eden publicly asserted the strategic importance of the Canal for the British Empire. In his words Nasser could not be allowed to get his hands “on our windpipe”.

It was now that the British, French and Israelis got together to plot the invasion of Egypt. Israel was to claim Egyptian incursions from Gaza and the Egyptian blockade of its Red Sea ports was the casus belli. Britain and France would then call on the two to stop fighting and Israel would accept and when the Egyptians did not the Anglo-French forces would attack Egypt. On Oct 29th the Israelis invaded and took most of the Sinai Peninsula. When they had got to within ten miles of the canal the British and French joint ultimatum was issued. When this expired on October 31st the British and French destroyed the Egyptian airforce on the ground. On Nov 5th the British and French landed their troops and took Port Said. No-one believed the lie that they were there to restore order and keep the peace.

The US was furious as the Eisenhower Administration was beginning a policy of diplomacy to try to counter Arab nationalism and the new-found interest that the Khruschev regime in the USSR had in the region. At this point, unlike today, the US did not let Israel run its policy in the Middle East and the US threatened to cut off all funding to Israel if their Prime Minister Ben Gurion (who had already told the Knesset that Israel intended to hold on to Sinai) did not retire to within Israel’s 1948 borders. Ben Gurion had no alternative but to cave in. However the US was working against their allies. In the UN security council the USA and USSR voted together to send an international peacekeeping force (the first time the blue berets were deployed). But this was not what made the British withdraw. Under US pressure the foreign holders of sterling began to withdraw their holdings and a new run on the pound ensued. The US once again used the IMF to discipline its ally by blocking the requested British loan to bolster sterling until the British agreed to withdraw from Egypt. The British had operative command of the Suez invasion so when they withdrew the French were forced to follow. ⁽³⁾ The humiliation of both powers was complete. It was the sign of the changing of the old order. The old colonial powers of Britain and France, although remaining players on the world stage, had been reduced from a dominant position at the end of the nineteenth century to simply major factors in the struggle between the two military super-powers of the USA and the USSR. In France the war in Algeria was lost by 1962, and after Eden resigned (in January 1957) Macmillan was anointed as his successor. Macmillan voiced the lessons for British imperialism. Within a few years he was announcing (in South Africa of all places) that the “winds of change” were blowing through Africa and within a few short years the British colonies like Ghana and Nigeria were free of the colonial domination of the British.

The Aftermath

With the Suez Crisis old-style colonialism died and was replaced by a more informal control through aid and finance. Colonies are expensive to police but post-colonial puppet regimes can be manipulated at less cost. In this respect Britain, which remains in the top five of the world’s imperialist powers, saw that real power lies in the ability to financially manipulate rivals. Having been a victim ever since 1946 it realised that in this sense there was only one player in town - the USA. The dollar had replaced sterling as the world’s reserve currency in under the Bretton Woods Agreement in 1946 but the devaluation of sterling by over 50% in the period around Suez further weakened London as an international financial centre. If there is a special relationship between he USA and Britain it is a one way street with the British hanging on to the coat-tails of the US. The end of the Cold War and the collapse of the Soviet Union has however put the British in a dilemma which divides them still. The British ruling class cannot decide whether to cultivate Europe so that it too becomes a political super-power of which the UK is a part, or remain the Trojan horse for US interests in Europe.

Suez also represented a shift in the Cold War. Stalin had died in 1953 and his careful support only for loyal “Communists” meant that the USSR was confined in influence only to the states of Eastern Europe and China and Korea. Khruschev preaching “peaceful co-existence” on the one hand extended support to every neutralist or nationalist regime that had any anti-western tinge. Within months the USSR was helping Egypt build the Aswan High Dam and over the next few years was rearming and training the Egyptian armed forces. Such actions were to increase the influence of the USSR everywhere and ultimately led to the only nuclear showdown of the Cold War in Cuba in 1962.

They were also to lead to a spate of wars of national liberation, those proxy wars of Soviet imperialism. And that is how we got a proxy left in Britain too. These “critical supporters” of the USSR had a hard time explaining why workers being mown down by tanks in Budapest ⁽⁴⁾ at the same time as the Suez Crisis was anything to do with socialism. Instead they ignored the obvious imperialist actions of the USSR but supported its surrogate actions around the world from Vietnam to Cuba. Even today after the collapse of the USSR the “new left” that arose in the 1950s still maintain that places like Cuba are socialist. When pushed they accuse communist like ourselves of being utopian as there is nothing better available. This is false to both the working class and to logic. There never will be anything better if communists do not argue for it, organise for it and fight for it. The main weapons of the working class are its consciousness and its collective capacity for action. If the latter is hi-jacked by those who claim that the best view of what socialism can be is Stalinist state capitalism then we will never achieve a socialist state. The capacity of the Left to assume that anti-imperialism means just anti-Americanism continues today with tacit support for Islamic jihadists despite their programme to take us back to the Middle Ages. The real communist answer is to reject all imperialisms, large or small, along with their reactionary ideologies. As Marx wrote a century and half ago the emancipation of the proletariat is the task of the class itself and this means having its own independent programme. We call it the communist programme.

(1) Churchill was also an advocate of poison gas. He defended the RAF use of poison gas in Mosul (Iraqi Kurdistan) saying he could not understand people’s squeamishness at the use of this against “backward tribesmen”.

(2) Peter Mansfield A History of the Middle East (Penguin 1992) p. 256.

(3) The Economist in its July 27th issue claims that this led the French to conclude that they could not rely on “perfide Albion” (sic) and thus determined to beef up the EU as a counterweight to Anglo-American domination. The evidence is that the Treaty of Rome was signed the year after Suez. This does violence to the facts since the prefiguration of the Treaty of Rome had already been foreseen since 1954. The real issue as we argue here was that the British ruling class were left in political confusion as to which direction to take. As we argue here it has not resolved that dilemma.

(4) See articles on Hungary and Poland in this issue.