Twentieth Century Britain

Originally published as part of THE MANY LIVES AND DEATHS OF JAMES BOND

At the end of the Napoleonic Wars in 1815, Britain was the only industrialized country in the world, and the only naval and colonial power of any weight. London was also the undisputed financial capital of the world. All of this meant not just British dominance in the world, but easy dominance by a wide margin, enabling Britain to run its empire "on a shoestring" as many a historian has put it.

However, the situation was clearly beginning to change by the 1860s, due to three interconnected developments. The first was a profound change the terms of economic competition. Industrialization was spreading and deepening elsewhere. Indeed, a "Second" Industrial Revolution based on the new technologies of oil, electricity and chemicals was getting underway, while the characteristic sectors of the "First" Industrial Revolution, like coal, steam-powered machinery and textiles, were going into decline. The tendency not only diminished the value of Britain's early lead, but threatened to make that early lead a liability as other countries began from scratch with the newest plant and newest practices.

The second was a series of geopolitical changes driven by nationalism and a revived imperialism that made some comparatively minor states consolidate themselves into larger and more formidable powers, and made other, established powers appear more threatening. The unification of Germany disrupted the old balance of power on the European continent. At the same time the consolidation of the United States in the Civil War, and its expansion to the Pacific and then overseas in the following decades; and Japan's emergence from its isolation to become a naval and colonial power; changed the balance of power in the Western hemisphere and the Far East. Meanwhile, France and Russia enlarged their empires, acquiring territories abutting British possessions in eastern Africa and southern Asia.

The third trend was likewise driven by nationalism, but within Britain's empire. At its height that empire ruled territories on which "the sun never set," encompassing a quarter of the world's land area – but the very diversity and dispersal of its subjects also made it subject to the centrifugal forces that wrested much of North America away from it in the American Revolution. Now nationalism was spreading in other, settler-dominated states like Canada and Australia, as well as nations like India where small numbers of British officials and soldiers ruled over vast populations of native subjects treated as a racial and religious "Other." Together these three trends raised the prospect of Britain being just one industrialized country among many instead of the unique "workshop of the world" it had earlier been; the metropole increasingly being outweighed by other powers which were both bigger and more dynamic; and the colonies ceasing to be a support to Britain's position. Essentially, it meant the reduction of Britain to being merely one of Europe's larger countries, and the first steps in this transition were already apparent at this time. First the United States, and then Germany, overtook Britain as manufacturers, while the country's commodity trade surpluses turned into deficits, covered by Britain's income from financial services and overseas investments. As this was happening, the growth of several foreign navies, especially those of Germany, Japan and the U.S., eroded Britain's confidence in its ability to project power globally. In the case of Germany, it even raised concerns about Britain's ability to protect itself against invasion (worries reflected in the flourishing invasion story genre). Britain consequently looked to alliances to protect interests it had once been able to provide for by itself, coming to terms with France and Russia (and concluding an alliance with Japan to secure its Asian interests) to better concentrate its military resources against the perceived German threat.

When war did come in 1914, the "Triple Entente" did of course prove victorious. Britain's primary challenger, Germany, was defeated and disarmed. Additionally, Britain gained new imperial acquisitions in the Middle East and central and eastern Africa, while South Africa, Australia and New Zealand also received former German colonies as mandates. Yet, the war was costly in ways beyond the bill for the fighting. The mobilization of the economy for total war meant that all production went to the war effort – exports collapsing, while imports skyrocketed (the more so because of what Britain's declining industrial economy was failing to produce at home, from steel to electrical goods). At the same time, world finance suffered amid the fighting, while much of the revenue-earning merchant fleet was sunk by German U-boats, forcing Britain to import even in this area too.

Covering the difference meant selling off foreign assets and raising loans abroad, while the overall national debt was twelve times bigger than it had been at the war's start. Meanwhile, many of the country's old markets had been snapped up during the conflict by its own, less-taxed Allies, like the United States and Japan. And matters were the worse because of the worldwide slump that followed the war, with wartime demand vanishing. Indeed, the gold standard that had been a pillar of the pre-war world economy was suspended in 1919, a major step toward Britain's ceding the financial predominance of the City of London to Wall Street, while stagnation prevailed through the 1920s.

Economic weakness, naturally, manifested itself in military weakness. America's size and wealth meant that Britain's days as the leading naval power were fast running out, while the country could not fight a major power without at least the "benevolent neutrality" of the U.S. – a fact which quickly had practical consequences, starting with Britain's not renewing its alliance with Japan.

This reinforced, and was reinforced by, Britain's weakening grip on its colonies. Independence movements grew more formidable from India to Ireland, where a successful revolt forced Britain to accept the country's independence in 1923. Even the Dominions increasingly asserted their independence, Canada refusing to back Britain in the Chanak Crisis that same year, when Allied troops at the Dardanelles confronted Mustapha Kemal's troops. The Allies ended up backing down in that crisis, with the result that Germany's wartime ally Turkey overturned the terms imposed on it at the end of the conflict – a humiliation that ended the career of Prime Minister Lloyd George.

The onset of the Great Depression in 1929 worsened matters. The older sectors on which British industry (steel, textiles, shipbuilding) remained dependent were particularly hard-hit, and put an end to the gold standard for good in 1931. That same year Britain recognized the independence of the Dominions of Canada, South Africa, Australia and New Zealand under the Statute of Westminster (confirming Britain's decreasing ability to rely on their significant resources). Germany, Italy and the Soviet Union appeared in the ascendant in these years as Britain remained mired in outdated economic policies at home (responding to depression with austerity). Abroad, Britain backed down in confrontations with Italy over its invasion of Ethiopia, and German over its remilitarization and expansionism (the enlargement of the German navy in 1935, the militarization of the Rhineland in 1936, the country's unification with Austria in 1938 and dismemberment of Czechoslovakia in 1938 and 1939). World War II came despite this policy of "appeasement," and after the Battle of France, left the British Empire alone for nearly a year against Germany and its allies, until German actions – its invasion of the Soviet Union, and declaration of war on the U.S. after Pearl Harbor – brought both these powers into the war against it as full-scale belligerents.

The End of Empire
At the end of the war in 1945 Britain looked stronger than ever. Germany was defeated again, far more decisively than it had been in World War I, so that British troops were in Berlin, while Italy and Japan were similarly defeated and under Allied occupation – three of the great threats of the interwar period to Britain and its empire neutralized. Britain also possessed military forces larger than ever before in its history, nearly five million of its people in uniform, distributed around the world to an extent that had never been seen as they occupied an assortment of French, Italian and Dutch colonies from Libya to Vietnam. Reflecting this position, Britain appeared at the wartime conferences of the Allies in Tehran, Yalta and Potsdam as one of the "Big Three."

Nonetheless, unlike the U.S., which realized its enormous latent power in the conflict, Britain exhausted its own power, the demands of the conflict exacerbating an already weak international position. Again British trade was dislocated. Again the shipping fleet was savaged by U-boats. Again foreign investments had to be sold off to cover expenses, this time half of them (compared with just a thirteenth in World War I). And as if this were not all enough, German bombing inflicted heavy physical damage on the country.

In all, one-quarter of the country's remaining wealth was gone by war's end, while the debt load had increased, markets had again been lost, and the country left insolvent, even before it could demobilize its forces and its economy, rebuild an industrial plant run-down by the sacrifice of all investment and maintenance to all-out production, and try to start paying its own way in the world again. Indeed, coming on top of the massive net wartime borrowing from the United States (and Canada), in 1946 the government had to take out yet a new multi-billion dollar American loan to keep its head above water.

Besides damaging British resources, the war also damaged British prestige, particularly in Asia, where many of its colonies were conquered and occupied by Japanese troops, including Hong Kong, Malaysia, Singapore and Burma. These losses destroyed Britain's credibility as a military power in the area, while strengthening local independence movements (in Burma, in control of the country when British troops returned), further undermining what remained of Britain's ability to control them. India (which at the time included present-day Pakistan and Bangladesh) was independent by 1947, Burma by 1948, Ceylon by 1949.

Nonetheless, withdrawal from these territories was initially conceived as part of a restructuring and rationalization of the empire, rather than its winding up. There were, for instance, hopes that Africa might constitute a "third" British Empire (replacing the "second" empire that was India, which in its turn had replaced the "first" American empire Britain lost in the Revolutionary War). Local opposition, and British weakness, made this impracticable, and by 1960 Harold Macmillan was speaking of the "Wind of Change." Nigeria, the Southern Cameroons, British Somaliland and Somalia gained their independence that year, Sierra Leone and Tanganyika the next. Kenya, which some had hoped would become a second South Africa, but which instead saw the Mau Mau revolt, was independent by 1963, as was Zanzibar, and all of Britain's remaining African possessions in the next few years.

With these colonies went both a crucial claim to Britain's great power status, and a crucial foundation of it, as they had continued to provide important props to the metropole's economy (like captive markets) and significant additions to it (like supplementary military manpower). The Commonwealth of Nations, despite all the hopes held out for it, proved no substitute for empire of any kind, and did little if anything to slow the drift of even Canada and Australia away from Britain toward the U.S. in their security and trading arrangements.

Naturally, Britain could not compete with the far vaster, and more fully mobilized, economic and military resources of the United States and the Soviet Union, the new "superpowers." Additionally, the reach of both the U.S. and the Soviet Union penetrated into Europe far more deeply and extensively by 1945 than had been the case in 1939, epitomized by the boots they had on the ground down through the middle of the continent. Even at sea, where Britain had still commanded the world's largest fleet at the war's start, it was eclipsed by the United States Navy during the conflict, without ever coming close to catching up. Not long after the war, it was to become increasingly clear that Britain could not even compete qualitatively with the superpowers in techno-military areas like nuclear weaponry, aerospace and blue-water naval capabilities. (The country's nuclear deterrent was to be founded on Polaris ballistic missiles imported from the U.S., its newer fighters like the Tornado built through international agreements rather than an independent British industry, its last fleet carrier retired in 1979.)

The result was that while Britain had historically been the "offshore balancer" in European politics, preventing any one country from growing powerful enough to dominate the continent by throwing its weight to this side or that one in a conflict (as when it joined the coalitions against France in the Napoleonic era), it had largely been supplanted in that role by the United States. The situation was much the same elsewhere in the world. Britain continued to play something like its old role in the Middle East and Southeast Asia through the 1950s and 1960s through client regimes, basing arrangements and the like. However, it quit Palestine in 1948, and lost its Egyptian client King Farouk just four years later – and when he was succeeded by Gamal Nasser, Britain's biggest overseas military base, its facility at Suez. Britain's attempt to reestablish its earlier position in the country by joining with France and Israel to overthrow Nasser, quashed by Soviet and American pressure, only underlined Britain's inability to act independently. Just two years later another client regime, the Hashemite monarchy, fell in Iraq, ending Britain's anemic attempt to organize collective security in the region under the "Baghdad Pact." In 1963 British troops faced an insurgency in the strategic colony of Aden, which led to British withdrawal from the country four years later.

Britain did not suffer such dramatic setbacks in Southeast Asia, the Malayan Emergency and the "Konfrontasi" with Indonesia that followed generally chalked up as successes. However, by the late 1960s the maintenance of a military presence there proved more financially costly than the country could afford, leading to the 1968 announcement that except for the retention of Hong Kong, Britain would withdraw "east of Suez" by 1971, an intention on which it soon made good.

There is no question about what these adjustments meant in practical terms, but there is considerable debate over what they meant in cultural and political terms at home. Some historians view them as having been relatively painless, and compare the process favorably with France's convulsions over Algeria at the same time. At the other end of the spectrum are those who believe British culture has never quite come to terms with the fact, even now three generations after World War II's end; that the country never quite moved on, the old pretensions turning up in the most inappropriate places. As Jeremy Paxman put it last year,

When a British prime minister puffs out his chest and declares he "will not tolerate" some African or Middle Eastern despot, he speaks not as a creature of a 21st-century political party in a dilapidated democracy but as the latest reincarnation of Castlereagh or Palmerston – somehow, British foreign policy has never shaken off a certain 19th-century swagger, and the implied suggestion that, if anything happens to a British citizen, a Royal Navy gunboat will be dispatched to menace the impertinent perpetrators.

Nonetheless, wherever the truth lies, there is no doubt that at the time there was a significant current, especially in elite opinion, which was unhappy with the change.

Change at Home
While Britain experienced these changes in its international standing, British society was in flux domestically. In the years prior to World War I, the classical liberal consensus which had prevailed in Britain was challenged by increasing pressure from increasingly strong labor and feminist movements, and the dispute over the status of Ireland. The outbreak of the war only deferred these issues, however, the conflicts over them continuing in such events as the successful breakaway of Ireland; the decline of the Liberal Party to third-party status, while the Labour Party formed its first government in 1924; and the General Strike of 1926.

During and after World War II the discrediting of the Conservative establishment by its mismanagement of the early part of the war (epitomized by Dunkirk, viewed at the time not as some glorious "miracle," but as a catastrophic defeat); the failures of conservative, free-market economic orthodoxy in the 1930s, and the successes of government planning during the war, on the home front as well as on the battlefield; the war's effect in creating a sense of national togetherness, idealism, and promise of "broad sunlit uplands" ahead; contributed to a vision of a more egalitarian post-war Britain as a goal of the conflict, epitomized by the wide support for the wartime Beveridge Report, which called for "a comprehensive policy of social progress."

In the August 1945 general election, the Conservative government of Winston Churchill was swept out of power, and replaced with a Labor government under Clement Attlee with a broad reform mandate. This extended beyond the treatment of full employment as a national economic priority, to labor-friendly legislation (like the Trade Disputes and Trade Unions Act of 1946, which widened the powers of organized labor), the establishment of a "cradle-to-grave" welfare state (with such measures as the National Insurance Act of 1946, and the launch of the National Health Service in 1948), and even the nationalization of key sectors of the economy (including the Bank of England, the coal, gas and steel industries, and the railways). These policies ultimately became the foundation of the "social market" or "welfare" capitalism that characterized the "postwar consensus."

As economic policy the consensus proved a significant success. Despite all the difficulties previously described, the post-World War II was a period of rapid economic growth and rising living standards for Britons as a whole – of prosperity unexampled in the country's history – such that many historians have dubbed it a "golden age" for the nation. Nonetheless, like all compromises, it left many dissatisfied at both ends of the political spectrum. On the left were those who had hoped that the policies of the Labor government of 1945-1951 would prove just the beginning of a movement toward deeper change. On the right were those who felt these changes had already gone too far, and even that any such movement was much too far, opposed as they were to such "leveling" tendencies on principle. (Author Evelyn Waugh famously remarked that during the years of the Attlee government the country felt to him like it was "under enemy occupation.")

These economic and political changes were accompanied by socio-cultural changes, evident in everything from personal relations (from a new working-class assertiveness to the Sexual Revolution) to the arts (shaken up by everything from the arrival of the "Angry Young Men" in British letters to rock music). And all these together interacted with those currents in opinion that lamented Britain's lost imperial status, with many resentful about the former seeing the latter as a cause, pointing to such things as generation gaps and rising labor militancy as culprits. All this lent a new edge to the age-old lament of the privileged that the young and the lower social orders did not "know their place," and that other age-old lament of anxious conservatives that "things are going wrong," but it seemed to many that all they could do was wax nostalgic for a romanticized version of the past.

After 1973
Britain's shift from world-spanning empire and international hegemon to "normal" country had largely run its course by the 1970s. Nonetheless, the decade saw other problems intensify as the post-war boom came to an end in Britain, just as it was doing in the rest of the world. The downturn saw increases in inflation, unemployment and fiscal strain, such that the country got a loan from the International Monetary Fund in 1976. The times took their toll on labor relations as unions clamored for pay increases in line with rising prices. The response among some observers to these events was hysteria, exemplified by the rise of organizations like GB 75 intended to combat trade unionists if they got too far out of line, and the rumored coup plot against Prime Minister Harold Wilson from within his own government, and culminated in the "winter of discontent" of 1978-1979.

The period's troubles also created a significant opportunity for right-wing opponents of the post-war consensus, with Prime Minister Margaret Thatcher making history with the implementation of a neoliberal economic program. This aimed at reviving the economy by making the country more business-friendly by privatizing state enterprises (like those nationalized under Attlee), deregulating business activity (as in the famous "Big Bang" deregulation of British financial markets), chipping away at the welfare state (as with the 1986 Social Security Act) and the suppression of organized labor (as in the Employment Act of 1980, which targeted closed shops and picketing), as well as monetarist policies aimed at controlling inflation.

The actual accomplishments of these policies were meager, their effectiveness at taming inflation and unemployment spotty at best. United Nations statistics on British GDP, when adjusted for population growth and inflation, show that even with the help of North Sea oil, growth in the eighteen years of Conservative rule that began with Thatcher (1979-1997) was only slightly better than what the country enjoyed in the much-maligned 1973-1979 period (1.9 percent, compared with the earlier 1.4 percent a year), and a far cry from its pace in the '50s and '60s. These years also saw the continued decay of British manufacturing, and along with it, a worsening balance of payments situation as sizable trade deficits in manufactured goods became a way of life.

The result is that such growth in Gross Domestic Product as did occur was hollow. Moreover, the harm such policies did the less affluent made Thatcherism proved deeply divisive in Britain, in a way that contemporary "Reaganomics" has not been for the United States. However, this "post-postwar consensus" continued to prevail through the "New" Labor premierships of Tony Blair (1997-2007) and Gordon Brown (2007-2010). The 2008 economic downturn, which internationally has contributed to some of the deepest questioning of neoliberal economics seen in a long time, has instead pushed the country farther along this path as the British government responded to recession in the same way that it did in the 1930s, with austerity measures.

The Thatcher era is also associated with a more assertive Britain on the world stage. Nonetheless, while British Prime Ministers sometimes spoke as if their country were still a superpower, the country's economic weight only continued to decline. Quickly as Britain grew in the post-war years, Japan, West Germany and France grew even faster, and all eventually overtook it in the area of economic output. Unsurprisingly, Britain was most prominent when acting in concert with the U.S., as when it allowed the U.S. to station intermediate-range nuclear forces in the country in the 1980s, cooperated in the American bombing of Libya in 1986, and committed more troops than any other of the U.S.'s NATO allies to Desert Shield and Desert Storm in 1990-1991. Even when Britain did pursue its own objectives, as in the 1982 Falklands War, it proved heavily reliant on the assistance of the United States (like its provision of the latest Sidewinder missiles for its Harriers, reportedly crucial to winning the air war over the islands).

The end of the Cold War, and the years that followed, saw the continuation of these trends, as the reunification of Germany and the closer integration of the European Union – a process from which Britain kept aloof – changed the distribution of economic power in its region. Globally, there was also a shift in world output and the balance of trade to East Asia, with the rise of Japan followed by China's emergence as an economic colossus, while India, Brazil and Russia have also, according to certain measures, overtaken Britain in the area of GDP. In the military sphere, defense cutbacks following the dissolution of the Soviet Union, and the 2008 economic crisis, have only further diminished Britain's capacity for long-range military action, as demonstrated in the Anglo-French intervention in Libya in 2011 – ultimately dependent on the backing of the U.S. for its success.

Today Britain still enjoys a number of great power trappings, like its permanent seat on the United Nations Security Council. The City of London remains an international financial center, in the view of some of comparable importance to Wall Street. Yet, Britain's strongest claim to global influence in the post-war era may actually be British culture and media, reflected in the status of the BBC and Reuters, the Beatles and Mr. Bean, and of course, James Bond himself.