It is not often that you get to feel sympathy for a Tory minister. This morning was one of those few occasions (a little bit at least). The latest, hapless, British Foreign Secretary, Dominic Raab – who apparently only a few weeks ago discovered that the English Channel is a thing – was interviewed on the BBC Radio Four Today programme; where he was subjected to lines of questioning that came directly out of the insane asylum. Raab was there to talk about the equally insane government approach to leaving the European Union; which seems to involve shouting loudly until Johnny foreigner finally realises that the UK government is serious (the problem being that the British government is holding the proverbial revolver to its own head). Nevertheless, the interviewer wanted to engage Raab in a question and answer session in which both interviewer and interviewee understand that they are spouting utter BS; but that neither is permitted to call it out.
And so it was that Raab was asked what he was going to do about Iran’s seizure of a British-flagged oil tanker. Raab responded with some froth about conversations he’d had with US Secretary of State, Mike Pompeo; a vague call for European cooperation (oh the irony); and a recital of some international maritime law to justify the UK seizure of an Iranian tanker at Gibraltar. Next, Raab was asked what he was going to do about the protests and heavy-handed police response in Hong Kong – a former British colony that was handed back to the Chinese in 1997. Raab mouthed some platitudes about the right to peaceful protest together with a clause from the handover agreement with China that grants Hong Kong citizens a more liberal form of rule than is found in mainland China.
The real answer to both questions is, of course, “WTF do you want me to do about it? I’m the barely-competent Foreign Secretary of a fast-failing state that is in economic freefall and political chaos. I’m only likely to be in the job until parliament returns in September; at which point we will most likely lose a no confidence vote after it becomes clear that we have absolutely no clue what to do about Brexit… Oh, and by the way, Britain ceased being a world power in August 1940 when we were forced to go cap in hand to America for the cash and equipment to continue fighting the war against Germany (which only became a World war in December 1941, when the USA and Japan joined in).”
Insofar as it is ever possible to put dates on the collapse of empires, I would posit two in relation to Britain – the year 1913 and 1 July 1916. The year 1913 marked Britain’s coal production peak; which hampered the further growth of the economy and added to the costs of ruling and administering an Empire that covered a quarter of the world’s surface; but which generated less than 10 percent of its GDP. Coming at a time when the major economies were switching from coal to oil to power their fleets and, ultimately their economies; this doomed the British Empire to decay even if its rulers had not blundered their way into the First World War a year later.
Saturday 1 July 1916 marks the point at which any British claim to military competence evaporated. Prior to that date, Britain had ruled its empire from the sea – giving the world the expression “gunboat diplomacy” in the process. Order of a kind was maintained more by dividing peoples against one another than by the deployment of British troops. And when hostilities did occur, Britain’s small professional army could be deployed – complemented where necessary with mercenaries – in such a way that there was little impact on the home population. During the Napoleonic Wars, Britain had been able to use the financial power of the Bank of England to out-borrow France in order to fund alliances against her. In this way, the use of British (but not Irish) troops was kept to a minimum. In the various colonial adventures in the nineteenth century, the full horrors of war could be kept from the British public. Even the 1879 defeat at Isandlwana – the worst ever defeat of a modern army by a native force – was covered by the desperate struggle of a small contingent of Welsh troops at Rorke’s Drift; which held off the Zulu forces until a British relief column arrived.
Even the Boer Wars – in which a small guerrilla force of South African farmers ran circles around the supposedly professional British Army – were sanitised for British consumption. So that when, 14 years later, the six divisions of the British Army were despatched to France to face the six German armies marching toward them; few in Britain had any inkling of the horrors that were about to be unleashed. Most continued to believe that the troops would return home before the leaves had fallen from the trees.
Instead the German advance was held on the Marne; and soon after the system of trenches – the only way in which soldiers could shield themselves from machinegun bullets – spread from the Belgian coast to the Swiss border. It was to attempt to break out of this entrenchment that the British commanders had drawn up plans for their summer offensive in 1916. Still reluctant to conscript men into the armed forces, the British government had turned to propaganda to encourage Britain’s youth to join up. The infamous poster of Field Marshall Kitchener stared and pointed accusingly from walls and billboards across the British Isles, with the slogan “Your country needs you.” Young women began handing white feathers to any young man not in uniform. And to make joining up easier, so-called “Pals Regiments” were set up so that young men from the same town, factory, mine or even football team could join up together.
The generals, meanwhile, had learned little since their defeats in Africa. Although radio existed, they did not know how to use it in battle. Nor was any thought given to rapidly deploying telephone cables across the battlefield. The result was that once the troops left their trenches, their commanders could not control them. Worse still, the absence of artillery spotters – which the French deployed on their sections of the front – to target and correct artillery fire meant that British troops were at considerable risk of friendly fire if they outran the artillery barrage. And so, the generals ordered the British troops to walk toward the enemy machine guns; with the result that 57,500 of Britain’s youth were mown down on the morning of 1 July 2016. Whole towns lost their male population in a matter of hours. Sixty percent of the front-line officers were lost on that first day of a battle that finally petered out in the mud of November 1916; by which time more than 400,000 British troops – the last of its volunteer army – had been cut down… all for the capture of just six miles of German-held territory.
It was to be another two years before the horror was finally brought to an end. But by then, the British people had lost their innocence. Men had been conscripted into the military, while women were drafted into industry to replace them; in a “total war” which bled the British Empire white. In just four years, the British went from the world’s greatest creditor nation to its greatest debtor (hidden only by the reparations imposed upon a defeated Germany). After 1918, the British Empire would be sustained by Wall Street banks and Texan oil fields.
An imperial wealth pump depends upon energy and technology to give value to a currency; which may then be loaned at interest. In the coal-based economy of the nineteenth century, this gave Britain a massive advantage. Demand for its industrial goods was high, causing countries to borrow in pounds sterling to purchase industrial goods – which were produced and deployed by British companies; allowing the borrowed currency to find its way back to Britain once more. This system also gave Britain a favourable trading position in relation to countries that produced the raw materials demanded by the British. And because the energy source that powered the system – coal – was present beneath Great Britain in quantities similar to oil beneath Saudi Arabia; the British Imperial Sterling Bloc became self-sufficient in trade.
The switch to oil changed everything. Britain had no accessible domestic oil. And although Britain could be supplied with a (relative) trickle of oil from its colonial holdings in Persia and Arabia; this was insufficient for powering an oil-based military, still less an oil-based economy. In the years before 1945 only three countries produced oil in anything like the quantities that would be needed to maintain the British Empire – Venezuela, the Soviet Union and the United States. The Soviets desperately needed their Caucasian oil to modernise their own economy; correctly fearing a war in the near future. Both Venezuela and the USA were trading… but only in US dollars.
The Sterling bloc was no longer self-contained; and the USA began doing to Britain what Britain had done to the rest of the world in the previous century – lending dollars at interest in exchange for the energy source that Britain simply had no choice but to import. And while Britain could fall back on the accumulated wealth of several centuries of empire-building; decline was built-in… It was only a matter of time before Britain’s accumulated wealth was transferred to the USA via the international banking system.
The sheer stupidity of the First World War is evident in the chasm between what the 1914 Liberal government thought it was going to cost and what it actually cost. As historian Clive Ponting records:
“In 1914 Britain estimated that American orders might cost a maximum of $50 million. But by early 1917 expenditure was running at about $80 million a week and during the first two years of the war orders amounted to $20 billion. Additional strain was placed on Britain’s resources by the financial weakness of its allies. From September 1915 Britain was responsible for the US purchases made by Russia and Italy, and after May 1916 for those of France as well…
“By the spring of 1917 the situation was desperate. Britain had just $219 million of gold and securities in the US and about $530 million in gold held in the UK. With spending running at about $80 million a week, it was enough to finance the war for less than ten weeks.”
The US intervention in the war – which was more to do with protecting the dollars it had loaned than with the sinking of the Lusitania or botched German attempts to have Mexico attack the USA – saved Britain and France from defeat but also left Britain owing more than $4 billion dollars to the USA… a debt that they technically defaulted on in 1934.
The British were rapidly plunged into financial crisis when war broke out in 1939. In August 1940, with Luftwaffe bombs dropping on the nearby streets, the Churchill government met to discuss the fact that Britain might soon lose the war. This had nothing to do with the planes circling overhead or the lack of any serious means of taking the war to Germany; but with the amount of gold left in the vaults of the Bank of England. By commandeering the gold they were supposedly protecting on behalf of European governments in exile, and by carefully regulating government purchases, the British government might, just, remain solvent until November (a proposal to force the British people to hand in their gold jewelry was turned down because the economic benefit would be trivial in comparison to the negative effect on morale). This meant that the future of the British lay in the hands of a far from friendly American electorate. If Franklyn Delano Roosevelt was elected for the third time in the 1940 election, he would continue and extend the war aid given to Britain. But if he was defeated, Britain would be bankrupt before his opponent – who was far less disposed to financing Britain – took office in January 1941.
Empires do not collapse overnight. The embodied energy in the capital they deploy allows them to continue for decades if not centuries. The Britain that emerged from the Second World War was a shadow of the Empire that started the First World War. No longer able to maintain an empire, it began organising the withdrawal from the Indian sub-continent immediately. Burma and Malaya followed closely behind. With the retreat from Africa beginning in the 1950s. Even this relatively orderly retreat from empire was only achieved because of Britain’s strategic location in the Cold War that broke out between the USA and the USSR – the planes that broke the Berlin blockade in 1948-49 were flown from American bases in Britain; and the US military was to use Britain as its “unsinkable aircraft carrier” for the duration of the Cold War.
The Cold War also provided Britain with an economic straw to grasp. Britain’s long-established and secretive international banking network provided the countries of the Warsaw Pact with a safe haven outside the USA to park the US dollars they needed in order to trade in world markets. And so gradually in the post-war years, Britain emerged as the world’s money launderer extending the reach of its banking system into a raft of criminal and tax-dodging sectors of the increasingly globalised economy.
None of this stopped the rot at home. As the net energy available to the British economy continued to decline, the competitiveness of British industry went with it. The energy cost of producing a raft of goods in Britain was far higher than the energy cost in Europe and in a growing number of Asian countries. By the 1970s, government attempts to boost industry by investing newly printed currency resulted instead in increased inflation. The primary purpose of governments of all shades in the post-war years to maintain full-employment became increasingly stretched.
Breaking point came in 1979 with the election of Margaret Thatcher on the back of a baby boomer generation that had no memory of the war or the depression that preceded it. Thatcher’s neoliberal experiment began with abandoning full-employment in favour of curbing inflation. In her first term, more than 2 million jobs were lost as whole industries simply disappeared. Thatcher was only able to get away with this because the oil crises of 1973 and 1979 had made North Sea oil viable. Britain became an oil state little different to Iraq, Libya and Venezuela; save that it also enjoyed the benefits of its global money-laundering operation. Reflecting on his life in politics, former Welsh First Minister Rhodri Morgan explained that:
“The other huge change since 1983 is that the North Sea Oil bonanza is over. Back then, whoever was running the Government had this amazing ability to spend oil revenues. Governments could afford things. They didn’t have to worry about where the next few quid was coming from. The Falklands War was eminently affordable. Paying the cost of the rocketing unemployment benefit bill, as dole queues doubled, then trebled, wasn’t a problem. [But] North Sea oil and gas are now in the end-game phase.”
Like every other oil state, neoliberal Britain bought social peace through debt-based spending based upon the future income from its oil. Unlike its Norwegian neighbours and learning nothing from peak coal, however, British ministers chose not to invest in a sovereign wealth fund against the day when the oil began to run dry. Instead, Britain’s elite borrowed and partied like there was no tomorrow; while the rest of us were bought off with cheap microwaves and mobile phones that were purchased on credit raised against the ever increasing price of our houses. As Ian Jack writing in the Guardian six years ago pointed to a UK politics dissimilar only in its beneficiaries to the politics pursued by Chavez in Venezuela:
“I had the idea… when I was walking through a London square around the time of the City’s deregulatory ‘Big Bang’ and Peregrine Worsthorne coining the phrase ‘bourgeois triumphalism’ to describe the brash behaviour of the newly enriched: the boys who wore red braces and swore long and loud in restaurants. Champagne was becoming an unexceptional drink. The miners had been beaten. A little terraced house in an ordinary bit of London would buy 7.5 similar houses in Bradford. In the seven years since 1979, jobs in manufacturing had declined from about seven million to around five million, and more than nine in every 10 of all jobs lost were located north of the diagonal between the Bristol channel and the Wash. And yet it was also true that more people owned more things – tumble dryers and deep freezers – than ever before, and that the average household’s disposable income in 1985 was more than 10% higher than it had been in the last days of Jim Callaghan’s government.”
North Sea oil and gas went into terminal decline in 1999. By 2005 Britain had become a net importer of both. Then in 2008, the money laundering operation that has kept Britain going since 1945 ended up on life support; where it has continued to be ever since. And with the exception of a handful of high-tech industries employing a fraction of the people employed by the companies that were destroyed or offshored in the 1980s, Britain has nothing left to pay its way in the world. We are rapidly reaching a point where the only consumption most Britons will be able to engage in will be of goods and services made locally. The gradual collapse of the non-food retailing, hospitality, car sales and tourism are merely the early stages of the process.
The Brexit vote – while partially a final cry for help of a (not so) working population that has seen its living standards ground into dirt – was also an attempt by a section of the elite to resurrect their vision of Britain’s imperial past. It is no accident that historically inaccurate references to the Second World War and the former colonies (many of which now dwarf the British economy) have been deployed to justify Britain’s exit from a trading bloc that has allowed its economy to survive in far better shape than it might otherwise have done.
It is, in fact, a hallmark of old men and collapsing states that they fall back on memories of past glories to mask the extent to which decay has set in. The days in which a British government could force Persian, Indian and Chinese governments into favourable trade arrangements, or despatch the fleet to the Far East or even the Strait of Hormuz to restore order to the colonies are a century behind us.
This brings us back to the – frankly embarrassing – interview with Raab this morning. From the tone of voice of both interviewer and interviewee, it is clear that they were performing a strange dance for public consumption. The interviewer has to pretend that Britain is still a global power (and most definitely not a near failed state) while the minister must pretend that there are still actions that Britain can take against states that are far more powerful in both military and economic terms. Indeed, even the alliance with the USA, which allowed the UK a fig leaf of greatness in the post-war years, is strained by an American administration that is itself in the process of withdrawing from the global empire it built after 1945.
The only question is whether anybody is buying this garbage any more. Does anyone seriously believe that the presence of a couple of British destroyers off the coast of Iran is scaring anyone? Does anybody seriously believe that the British government can do anything to chastise a Chinese regime that leads the world in oppressing its population? Sadly, the answer to these questions, in the face of all the evidence, appears to be yes… at least among that part of the population that seriously thinks that Britain is going to be better off outside the European Union, where it will be forced to trade solely on its own (lack of) economic strength.
As you made it to the end…
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