1. The Decline of Britain¶
Core Argument¶
1. The Decline of Britain
Britain was forged through the seventeenth-century political revolution and the eighteenth-century industrial revolution. Between 1850 and 1880, it served as the industrial school for Europe and America, yet its very success undermined its monopoly. From the 1880s, Germany’s rise dealt a heavy blow to free trade. By the early twentieth century, the privileged position of the labour aristocracy was shaken, producing class battles from 1911 to 1913, including a national railway strike. The 1914-1918 war temporarily checked decline but deepened it. The emergence of the United States shifted Britain into a secondary position; the fundamental world antagonism is between Britain and America. Anglo-American ‘cooperation’ is the peaceful form of Britain’s retreat, preparing the way for war. Chronic unemployment, now a permanent social layer, reveals the system’s insolvency. The break-up of the Liberal Party crowns a century of development; free trade has reached an impasse. The Labour Party, close to the Liberals, cannot restore stability. The bourgeoisie’s fear of revolution now paralyses industrial initiative rather than driving reform. The contradictions will intensify measurably in years, not decades. Britain’s fate depends on whether a Communist Party with mass links is built in time.
On 1 July 1911, a German warship visited Agadir, Morocco, ostensibly to protect German interests against French expansion. Britain threatened action against a German presence near Gibraltar; war was averted by a deal ceding part of the French Congo to Germany. Since that time, Britain adopted the Gold Standard. This appears a victory for British capitalism but actually expresses Britain’s decline. Britain was compelled to adopt gold by the pressure of the American dollar and by its own dominions orienting towards the dollar. Britain could not accomplish this without extensive US financial ‘aid’, making the pound sterling directly dependent on New York. The US gains a weapon of financial pressure; Britain pays high interest, charged against ailing industry. To hinder gold exports, Britain must cut goods exports. Yet refusing gold would hasten decline in the world capital market. This fatal combination causes malaise among British ruling classes. The Daily Mail writes that the government gives the Federal Reserve the power to create a monetary crisis in Britain at will, submitting British financial policy to a foreign nation. The Daily Express writes that Britain falls under American bankers’ heel. The Daily Chronicle states Britain is demoted to the forty-ninth state of America. Churchill replies that Britain must conform “with reality”: Britain has become immeasurably poorer, the US immeasurably richer; making sterling dependent on American banks translates economic decline into currency.