The last long decade before the outbreak of the First World War was a proving ground. It tested the extent to which the British had been able to adapt their superstructure of power and influence to the more strenuous global conditions that set in during the 1880s and 1890s and reached a further peak of intensity after 1900. The judgment of historians has been variable. The Edwardian decade has sometimes been seen as the ‘high noon’ of empire, the last hurrah of a self-confident imperialism. But, usually, the view has been sterner. Indeed, the more closely the Edwardians have been scrutinised, the more they seem prone to well-merited anxieties. Far from delivering a new security, their abandonment of ‘splendid isolation’ brought the uncertain liabilities of the Triple Entente and an uneasy dependence on Japan in East Asia. The cost of defending their naval supremacy was a furious arms race with Germany, and ended in a strategic withdrawal from the Mediterranean Sea. The Edwardian economy lost ground on productivity, and real incomes stagnated – one cause of large-scale industrial unrest in the last years of peace. The scale of mass poverty revealed by contemporary inquiry was an indictment of both ‘national efficiency’ and social justice. Domestic stability was threatened by fierce divisions over tariffs, taxation and the constitution. The revival of the Irish Question after 1910 highlighted the failure of parliamentary government to resolve the future of Ulster and raised the spectre of civil war in the British Isles.

On this view, it is easy to see why the last years before the First World War are often contrasted unfavourably with the mid-Victorian era. Late-Victorian Britain was a ‘declining hegemon’; Edwardian Britain a ‘weary titan’. But the reasoning here is faulty. Britain's ‘hegemonic’ status in the mid-nineteenth century is often invoked but rarely described. It is a plausible myth. British power in mid-century had little purchase over much of continental Europe where allies were vital to intervention or leverage. Much of the non-European world lay beyond the reach of either the Royal Navy or the Indian Army. The sphere of mid-Victorian Britain's economic primacy was wide (though far from global) but it was also shallow – since much of it was barely exploited. The late Victorians’ empire was richer as well as bigger. Too much can be made of their ‘relative decline’, especially when the measures for it are vague. Too little has been made of the rising wealth of the Edwardians’ empire and the growing mass of assets they were piling up abroad. Indeed, for Edwardian Britain, the real question was not the retention or loss of a nebulous ‘hegemony’, but whether, as the British system expanded in a more intensely competitive world, its parts could be made to cohere.

Imperial grand strategy and the South African War

Before 1899, the grand strategy of empire had seemed obvious. British foreign policy was the policy of a sea-power, the sea-power. The Royal Navy was assumed to be capable of defeating any naval force that challenged it in a general war. Command of the sea would be secured by a decisive victory and the destruction of the enemy fleet – as had happened at Trafalgar. Thereafter, the great archipelago of British interests and possessions spread across the globe would be invulnerable to invasion – with the signal exceptions of India and Canada. British sea-power would apply the brutal tourniquet of blockade to bring the enemy to terms. The Navy was thus the great defensive and offensive weapon of British world power. By contrast, the functions of the Army were of almost secondary importance. It existed to support the civil power at home, not least in Ireland; to supply men for the large contingent maintained in India; to garrison the bases and coaling stations scattered round the world; to provide for home defence in the unlikely event of an invasion undetected by the Navy; and to supply, if need be, an expeditionary force of up to 70,000 men for service overseas.1 In the Stanhope memorandum of 1891 that set out the Army's role in this order, the likelihood of such an expeditionary force being sent to Europe was treated as of almost fantastic improbability.

These strategic preconceptions dictated the distribution of British forces around the world and influenced their formations and tactics. The Navy was deployed on nine stations, each embracing a vast area of sea. On the Home Station were eighteen battleships and sixteen cruisers as well as a mass of smaller craft: this was the front line against invasion and the reserve against emergency elsewhere. In the Mediterranean, where the British had the greatest reason to fear a combined assault by France and Russia and much to lose, they kept a large force of twelve battleships and thirteen cruisers in a fleet of more than forty ships. On other stations, with the exception of China, they relied upon cruisers to maintain their seaborne primacy: ten in the Western Atlantic (the North America and West Indies station), two off the east coast of South America; four in the Eastern Pacific; seven to patrol the Cape of Good Hope and the West African coast; four on the East Indies station; and eight on the Australian.2 On extra-European stations, the most visible sign of British sea-power was often the gunboat, a small, lightly armed ship of some 600 tons with a crew of between 60 and 100.3 But the workhorse of British sea-power beyond European waters was the faster, well-armed, long-range cruiser, patrolling the sea-lanes and paying the courtesy calls that served as a none too subtle reminder that coastal states without navies and who depended upon the revenues from trade were wise to avoid the sea-power's displeasure.

By contrast with the Navy, the Army was somewhat more heavily concentrated. On the eve of the South African War it disposed of 31 cavalry regiments and 142 infantry battalions grouped in pairs to form the county regiments created by the Cardwell reforms.4The infantry battalions were maids-of-all-work. In 1896, eighteen were scattered in pockets around the world from Bermuda to Hong Kong, three were in Egypt, three in South Africa, and fifty-two were in India. The remainder were at home, not so much as a striking force as a reservoir from which the overseas units were filled up. Indeed, it was easy to imagine that the Army at home existed chiefly to service the great garrison kept in India since the Mutiny: this was the manpower problem that obsessed its chiefs. Where the Army had seen action since the Crimean War it had fought small wars with small formations against Asian or African foes, usually lacking modern weapons.5 On colonial battlefields, individual resource and the brute courage of a professional army substituted for the staff skills and modern tactics prized by continental generals. Against an uncivilised foe military doctrine was straightforward. ‘Dash at the first fellows that make their appearance’, said Wellington, the greatest of the ‘sepoy generals’, ‘and the campaign will be ours.’6

Of course, the late-Victorian system had been far from perfect. The generals fretted constantly over the shortage of manpower. ‘We live from hand to mouth, like the insolvent debtor who meets his daily liabilities by shifts invented on the spur of the moment’, complained Lord Wolseley in 1896. ‘Is this a real military system, or is it a system of make-believe?’7 The demand for more battleships on overseas stations rose inexorably: in the Mediterranean after the Franco-Russian alliance, and also in China. To cover the gaps, it had sometimes been necessary to make guarded promises of joint defensive action, as Salisbury had done with the Mediterranean agreements of 1887. Such precautions were needed, he told Queen Victoria, against the danger of the continental powers treating ‘the English Empire as divisible booty by which their differences might be adjusted’.8 But it was the South African War that was cause and occasion for the most drastic review of grand strategy since the 1860s.

There were several reasons for this. The defeats of ‘Black Week’ in December 1899 shattered any remaining complacency about the likely performance of the Army in a war against a first-class opponent. The humiliation of military failure bred a mood of recrimination that surfaced during the war and afterwards at the Elgin Commission's enquiry into its conduct. ‘For frank, not to say malicious criticism of one another’, remarked Milner sardonically in January 1900, ‘I know of no set of men equal to our haute armée.9 To the Royal Commission, Kitchener and other senior officers presented a catalogue of defects: the poverty of intelligence; the shortage of staff skills; the age and infirmity of battalion commanders; the absence of professionalism among officers; above all the lack of any means to control the movements of an army far larger than the usual colonial expedition. One regimental adjutant had been reduced to advertising in a Cape Town newspaper for information on the whereabouts of his unit.10 ‘Regarded as an institution or society’, remarked Leopold Amery crushingly in The Times History of the War in South Africa, ‘the British army of 1899 was undoubtedly a success…As a fighting machine it was largely a sham.’11 During the war, the concentration of so much military manpower in South Africa made the defence of India (the first object of imperial grand strategy) look increasingly precarious. With Russia's military frontier grinding towards the Himalayas, the Indian Viceroy Lord Curzon insisted that in the event of war 70,000 men would have to be sent immediately to India – a calculation the War Office was forced to accept in 1901.12 Even if the men were available, South African experience was bound to raise doubts about the Army's ability to face an Armageddon in the Hindu Kush.

But it was sea-power not the defence of India that touched the rawest nerve and galvanised the British cabinet. When Lord Selborne became First Lord of the Admiralty in November 1900, he quickly sounded the alarm to his colleagues.13 Britain faced a revival of French sea-power in the Mediterranean, making Admiral Fisher's call for more battleships there irresistible. Simultaneously, the Boxer Rebellion in China and the intervention by the Western Powers and Japan made the risk of a forced partition far greater, and with it the chance of conflict between the Powers. Britain had to match the rapid growth of Russia's eastern sea strength. ‘We could not afford’, wrote Selborne urgently, ‘to see our Chinese trade disappear, or to see Hong Kong and Singapore fall, particularly not at a moment when a military struggle with Russia might be in progress on the confines of India.’14 For Selborne, the emergency in East Asia on top of his Mediterranean difficulties was the last straw. A new course was essential. The cabinet toyed uneasily with a scheme to ally with Germany, but flinched at the prospect of military commitments in Europe. All the while, fear of Russia, that power to whom ‘defeat, diplomatic, naval or military matters less…than to any other power’,15 grew steadily stronger. ‘A quarrel with Russia anywhere, about anything, means the invasion of India’, groaned Balfour, Salisbury's nephew and heir-apparent, in December 1901.16Without allies, Britain would be fair game if France joined in. The short-term solution was a naval alliance with Japan in East Asia, concluded not without misgivings in January 1902. The end of the South African War in May 1902 did nothing to ease the naval strain. ‘We must have a force which is reasonably calculated to beat France and Russia’, wrote Selborne in January 1903, ‘and we must have something in hand against Germany.’17 Meanwhile, London struggled inconclusively with army reform to provide its share of the huge force of three or four hundred thousand men that Kitchener (now Commander-in-Chief in India) declared essential to repel an invasion brought closer by Russia's new strategic railways in Central Asia.18 But the government's real decision was to endorse Selborne's demand for a large rise in naval spending (50 per cent greater by 1905 than in 1899) and the revolution in naval deployment that Fisher had planned.

Fisher became First Sea Lord and the Navy's professional head in October 1904.19 He was determined to match the French and Russians in the Mediterranean, where Britain's imperial communications were most vulnerable, and was passionately committed to equipping the Navy with the fast, armoured ‘all big gun’ warships made possible by technical advance. The price, as Fisher saw with brutal realism, was the scrapping of large numbers of older, less powerful ships – ‘too weak to fight, too slow to run away’ – and the concentration of resources and manpower in a modern battle-fleet in European waters. In December 1904, Selborne announced a drastic redeployment. The South Atlantic station was wound up, the China, East Indies and Australian stations effectively merged. In place of the scattering of cruisers around the world, four cruiser squadrons, kept mainly in Europe, would be ready ‘to show the flag in imposing force, wherever it may be deemed to be politically or strategically advisable’.20 In the following year, the five battleships on the China station were brought home. Large numbers of gunboats, Fisher's ‘bugtraps’, were swept away. The dreadnought age had dawned.

The naval policies initiated by Selborne and Fisher were a response to the weakness revealed by Britain's isolation during the South African War and the growth in German, French and Russian sea-power. By 1907, the strategic situation had markedly improved, or so it seemed. The threat of a Franco-Russian attack had all but disappeared; the danger of a combined assault by the three great European powers had vanished. The reason lay in diplomatic success and vicarious military good fortune. In April 1904, Salisbury's successor as foreign secretary, Lord Lansdowne, at last succeeded where Salisbury had failed in persuading France to agree to a comprehensive settlement of outstanding disputes in the imperial sphere. At the heart of the ‘Entente Cordiale’ was the mutual recognition of each other's primacy in two zones of great diplomatic sensitivity: Egypt, where the British ‘temporary occupation’ had been an open sore in Anglo-French relations since 1882; and Morocco, whose proximity to French Algeria made its external connections a matter of intense concern to governments in Paris. The British hoped that the Anglo-French entente would open the way to an agreement with Russia, the real threat to their position in India and East Asia. The prospect looked bleak, and when Russia and Japan (Britain's regional partner in East Asia) went to war in 1904 over the future of Korea and Manchuria, the danger of an Anglo-Russian clash briefly seemed acute. But, in a dramatic reversal of expectations (Fisher expected Russia to beat Japan),21 Russian naval power was shattered at the battle of Tsushima – Japan's Trafalgar – in May 1905. The British regained a clear margin of naval superiority over Germany, France and Russia combined. In 1907, the Tsarist government, weakened by defeat and revolution, accepted a diplomatic compromise in Persia and Central Asia – where friction with Britain had been greatest – that left southern Persia and Afghanistan, the ‘gates to India’, firmly in the British sphere.22 The Anglo-Russian entente completed the rapprochement between London and its long-standing rivals in the Outer World. Meanwhile, in the diplomatic crisis of 1905–6, when Germany had tried to disrupt the Anglo-French agreement over Morocco and revive British isolation, the new alignment had held firm – just.

The promise of a new international equilibrium did not last long. By the end of 1908, there was growing alarm in Britain at the open challenge now posed by the ship-building programme of the German navy. While fears about the German plans were somewhat exaggerated, the schedule for dreadnought construction by Germany's Mediterranean allies, Italy and Austria-Hungary, meant that a new round of the arms race had begun. In February 1909, the Asquith cabinet agreed to build eight new dreadnoughts, four more than their original estimate, on the assumption that proof would be forthcoming of German plans. By March, a full-blown ‘scare’ was under way, rapidly reaching Canada, Australia and New Zealand.23 An agitation sprang up in Australia to give a dreadnought to the Royal Navy.24 The New Zealand government offered two dreadnoughts. The Canadian government under Laurier compromised with a scheme for a Canadian Naval Service.25 At a special imperial conference on defence held in July, the British Admiralty urged the formation of dominion ‘fleet units’, recognising that, in the Pacific dominions, public opinion would demand some local control over the ships for which it had paid – even if they came under Imperial command in time of war. But the centre-piece of British policy was the remorseless drift towards a single-minded concentration on the naval race with Germany. Already in 1909, the Admiralty had quietly accepted that it could no longer match the two next strongest naval powers combined (the ‘two power standard’) and must settle instead for a margin of 60 per cent over Germany. By 1912, even this looked ambitious as a new German naval law was broached. When the Haldane Mission failed to reach agreement with Berlin on a standstill, the need to preserve superiority in the decisive battleground of any Anglo-German naval war – the North Sea – forced the Asquith government into a strategic revolution.

The revolution was a naval withdrawal from the Mediterranean announced in July 1912 by Winston Churchill, the First Lord of the Admiralty. The most powerful ships of the Mediterranean fleet were to be redeployed to the North Sea: the rest would be no match for the Austrian or Italian dreadnoughts of Germany's allies. To protect her vast Mediterranean interests, her marine highway to the East and the naval approaches to Egypt, Britain would rely instead on the goodwill of France, whose Atlantic squadron was transferred from Brest to Toulon in September. The clear implication was a deepening commitment to the support of France in any European conflict – the subject of secret ‘military conversations’ between the two general staffs since the Moroccan crisis of 1905–6. Britain's army, like her navy, now seemed to be focused not on the defence of a far-flung empire, but on deterring a German bid for primacy in Europe.

On the face of it, the change in Britain's strategic fortunes since the outbreak of the South African War in October 1899 had been dramatic. Indeed, the new pattern of world politics suggested that between 1900 and 1914 Britain and its world-system had experienced a sharp phase of relative decline. The symptoms seem obvious. In regions once thought vital to British interests, their protection had been left to others or to luck. Once, governments in London had cut a lordly dash, treating European diplomacy with insouciance and basing British power on seaborne self-reliance. Now they had been dragged into the European maelstrom as reluctant players in a volatile game of competing alliances. The Army had been remodelled for convenient deployment on the European mainland, almost unthinkable before 1900. The old priorities of global power had shrunk to a continental commitment. Britain could no longer afford the luxury of ‘splendid isolation’ because British opinion would no longer pay for it. Indeed, as great power competition hotted up, British industrial power had slipped back. In a period of relative economic decline, the strain of upholding a worldwide pre-eminence and safeguarding the regional security of the British Isles had become too great. Over-extension abroad and under-performance at home forced a strategic change. The question was: if Britain gave up its role as the strategic guardian of the British system, how long would it be before its cohesion began to falter, its subject peoples became restless and its enemies closed in?

Plausible in its own terms, this description is too apocalyptic. ‘Splendid isolation’ was a romantic fiction. An active diplomacy in Europe had always been vital to imperial interests: nowhere more so than in Egypt and the Near East. It was certainly true that there had been a fundamental shift in the theory and practice of British grand strategy. There was a new strategic setting. Britain's world interests were less secure. The margin of safety was narrower. The brittle alignments and fractious diplomacy of pre-1914 Europe can be seen with hindsight to foreshadow a catastrophic war. But the scale of pre-war change should not be exaggerated. The real question was not whether there had been a relative decline from some imaginary benchmark of mid-Victorian ‘primacy’, but whether the British were still strong enough to protect their system against rival powers – by whatever means. To answer this properly, and to take a more realistic view of Edwardian strategy, requires some account of the wider geopolitical scene.

Britain in world politics

The new shape of world politics after 1900 affected all the great powers competing to be ‘world states’. To none of them did it offer unequivocal advantage, or a clear road to primacy and hegemonic status. Each faced political risks at home and abroad that drastically reduced the scope for forceful action on the international stage. This applied to Germany, Russia and the United States, the powers that were best placed to take the initiative. Germany was the strongest. A sustained programme of naval expansion had made it the principal threat to British sea-power. Germany's foreign trade had expanded rapidly and its new merchant fleet, like its navy, was second only to Britain's. German investment had begun to penetrate regions like Latin America, long the preserve of British capital.26 Not surprisingly, in some naval, shipping and colonial circles, as well as among conservatives hostile to the liberal capitalism with which London was so closely identified, antagonism to Britain was commonplace. But, while German policy was committed to the Tirpitz plan, and a high seas fleet strong enough to enforce neutrality on Britain in the event of continental war, there was little enthusiasm in Berlin for a frontal assault on the British system. German diplomacy shifted uneasily between Bismarckism and the Weltpolitik favoured by the Kaiser. The Bismarckian tradition looked coolly on imperial self-assertion and the German nationalism with which it was associated. For Bismarck, the gravest threat to the new German Empire had been the growth of national feeling among the subject peoples of Eastern and Central Europe: Poles, Czechs, Slovaks, Ukrainians and South Slavs.27 Hence German security required good relations between the three great imperial monarchies ruling over this vast multi-ethnic Mitteleuropa: the Hohenzollerns, Hapsburgs and Romanovs. British goodwill should be cultivated as a counterpoise to France whose hope of revanche and the restoration of Alsace-Lorraine made it the joker of European diplomacy. This more conservative view of German interests grew stronger in the last years before 1914. After 1909, there was no question of outbuilding Britain in dreadnoughts, not least because the revenue base of the German central government was much more limited than that of its British counterpart.28 As the means to imperial expansion, the high seas fleet became a broken reed. Meanwhile, the fate of Mitteleuropa had become more pressing – and Austro-Russian antipathy more dangerous. By the time of the First Balkan War (1912–13), Berlin was anxious to mend its fences with London and came to terms over the future disposal of Portugal's colonies (should Lisbon's bankruptcy bring them on the ‘market’) and the railway line to the Persian Gulf (the Bagdadbahn). But one crucial element of Weltpolitik remained embedded in German policy. The Kaiser's government refused to abandon its naval programme without the promise of British neutrality in a European conflict. It was exactly the concession which (as we shall see) the logic of Edwardian diplomacy was bound to reject.

The novelty and seriousness of Germany's naval challenge – and the reason why it aroused so fierce a reaction in Britain – was that it threatened to nullify the British claim to be a great power in Europe, a claim founded ultimately on the possession of sea-power. But for more than a century it had been the insidious threat of Russian expansion that had haunted British thinking on imperial defence. What made Russia so dangerous, thought the policy-makers, was its ability to exert pressure on four different regions of great strategic or commercial importance to Britain: the maritime corridor between the Black Sea and the Mediterranean (the ‘Straits’); Persia and the Persian Gulf; Afghanistan and the inner Asian frontiers of India; and North China and Peking. In British eyes, the danger was compounded by the brute scale of Russia's resources, especially in manpower, and the erratic, inscrutable processes of Russian policy. In a secretive hothouse atmosphere, periodically scorched by the gusts of pan-Slav emotion, rival court camarillas competed for the Tsar's capricious sympathy. Careerist soldiers, unscrupulous concessionaires and religious mystics touted their reckless projects amid grandiloquent talk of the Romanov mission. With so insatiable and unpredictable a power, the partition diplomacy that was Salisbury's forte stood little chance of success. This was a gloomy and misleading view of the Russian polity. But it reflected the feeling of impotence in the face of the northern leviathan: the ‘invulnerable power’ of Selborne's warning, the ‘inland tyranny’ immune to naval chastisement in Lord Salisbury's regretful phrase. It was fuelled by the paranoid fear that a Russian attack on the Indian frontier would spark a second Mutiny and bring down the Raj from within. It was grudging acknowledgment that Russian empire-building was on a scale as vast as Britain's and that the colonising drive, celebrated by Russian historians as much as by British, had accelerated in the late nineteenth century. As its railways reached further, tightening its grip on its vast peripheries, Russia's domination of North Asia seemed certain to grow.29

Instead, it received a violent check. Defeat by Japan in 1905 revealed the latent weakness of the Russian system and the fragile foundations on which Tsardom had erected so imposing a superstructure.30 Economic backwardness was the root of the problem. Low agricultural productivity, a narrow industrial base, a stunted rail network and dependence upon foreign capital were the real index of Russian power and a massive brake on strategic freedom. Economic weakness reinforced (and was aggravated by) demographic inadequacy. Ethnic Russians were too few (forming 45 per cent of the Empire's population) and much too immobile to dominate the minorities that Tsardom had conquered. The frontiers of empire could not be closed: they were too porous to seal off the external connections that made the loyalty of frontier peoples so doubtful in time of crisis. In fact, the Empire remained a multi-ethnic construct to its very core since Tsardom had advanced not by building up a Russian state but by collaboration with non-Russian elites – in the Ukraine, the Baltic, Poland, Finland, Georgia, Armenia and elsewhere. Nor was Russian culture a substitute for political weakness since it lacked the absorptive quality or universal appeal to attract the European and Islamic minorities under Tsardom's sway.31 The result was an imperial power whose size and spasmodic aggression masked weaknesses laid bare in the military catastrophe of 1905, and the near implosion of the whole regime. Thereafter, it was clear that for some time to come a forward movement in North Persia or towards the Straits would require the support of either Germany or Britain. Without one or the other, the outcome would be humiliation – a lesson confirmed in the Bosnian crisis of 1908.32 In official circles, the need for caution was well understood.33 To a realist as brutal as Peter Durnovo, the saviour of Tsardom in 1906, internal cohesion could hardly survive the effects of a European war. The age of expansion was over, he thought. The age of crisis was about to begin.34

Britain's greatest rival, judged by population and output, lay not in the Old World but in the New. Anglo-American antagonism was much older than Anglo-German. Relations had improved in the later nineteenth century. But, in the Caribbean and Central America, there had been persistent friction between the old colonial power and the new commercial prodigy. Canadian mistrust of American expansionism was a further complication. Then, with the Spanish-American War of 1898, the United States became an imperial power. It annexed Hawaii and tightened its grip on the Central Pacific. As ruler of the Philippines, it could claim new influence in maritime China. As master of Cuba, it dominated the Caribbean. But the most significant change, from the British point of view, was the new commitment to naval power in the presidency of Theodore Roosevelt (1901–9). By 1907, he had persuaded the Congress to fund the building of a fleet second only to Britain's. For the embattled Royal Navy, a new sea challenge to its rear joined the new sea challenge to its front.

If Tirpitz had been right, the rise of American sea-power would have sealed Britain's global fate. For Tirpitz believed that common antagonism to British supremacy was the natural policy of all sea states.35 The reality was very different. The British were certainly at pains to conciliate American opinion. Soon after 1900, they had tacitly acknowledged that a war with the United States was militarily unwinnable and politically unthinkable. America's new status in the Caribbean was recognised in the Hay-Pauncefote treaty of 1901 when Britain disclaimed any interest in the Isthmus of Panama. Britain was no enemy of the Monroe Doctrine, declared Arthur Balfour in the House of Commons.36 When the puppet state of Panama was carved out of Colombia with American help in 1903, and a canal zone leased in perpetuity to Washington, the way was open for an American-owned ‘path between the seas’.37 The balance of power had shifted abruptly in the Western Atlantic – or so it seemed.38 Meanwhile, the inexorable rise of the American economy was a source of commercial unease in London. But none of this meant that America now threatened the British world-system.

There were several reasons for this. American opinion was still too ‘continentalist’ in outlook to be converted to the ‘navalist’ views of Roosevelt or his successor Taft. After 1908, their ambitions were reined in by a sceptical Congress.39 Secondly, American sea-power was hobbled by the need to guard two oceans, separated before 1914 by the voyage round Cape Horn. Thirdly, as Roosevelt gradually saw, American interests in China had been exposed by Russian defeat to the pressure of Japan, an ally of Britain since 1902. The Philippines looked less like a salient in Asia than a hostage to naval fortune. Fourthly, the onset of revolution in Mexico in 1910 renewed the old American nightmare: European (or even Japanese) intervention to check the assertion of Washington's influence in its own ‘backyard’.40 The timing here was crucial. For, as completion of the Panama Canal crept nearer, strategic control of the Caribbean and its approaches loomed larger and larger in American concerns.41

As a result, the social and cultural rapprochement between Britain and America, and the racial appeal of ‘Anglo-Saxonism’ on both sides of the Atlantic, had its counterpart in diplomacy. If British leaders repudiated all thought of Anglo-American conflict, it was no more thinkable in Washington. British naval supremacy, remarked Theodore Roosevelt, was ‘the great guaranty for the peace of the world’.42 For Roosevelt, a large and efficient United States Navy would be ‘the junior member of an informal two-power alliance’ tilting the international balance towards Anglo-American interests.43 The cold calculations of naval planners were based on the same assumption. Japan (‘War Plan Orange’) and Germany (‘War Plan Black’) were the likely enemies.44 A German attack was only possible in the ‘highly improbable’ event of British acquiescence. To American opinion, concludes a recent study, the real guarantor of its Atlantic security was British not American sea-power.45 On this calculation, the United States looked less like an imperial rival and more like a forceful, determined ‘super-dominion’.

These checks and balances in the scope of great power ambition help to explain why the theoretical vulnerability of Britain's vast and straggling empire, sprawled across the globe, as one official remarked, like ‘a gouty giant’, was not translated into territorial loss. By the yardstick of relative power, the British system was surprisingly strong. It could not be encircled. Its rivals were at odds. Its lines of communication were secure – unless naval catastrophe occurred in Europe. These were the assets that Edwardian strategy was designed to exploit. But, as the policy-makers came to realise, they could not be turned to account without a more or less drastic revision of the old assumptions of Salisbury's Realpolitik.

The South African War had been the forcing-house of change. International isolation and the unrealised threat of a great power combination against them left a lasting impression on British leaders. Post-war tension with Russia and Germany drove home the lesson that their imperial ambitions could not be contained by sea-power alone. In the Foreign Office, a diplomacy of studied caution seemed the only cure for Britain's exposed position. ‘A maritime state’, remarked a leading official, ‘is, in the literal sense of the word, the neighbour of every country accessible by sea.’ To avoid falling foul of a hostile coalition, it must aim to ‘harmonize with the general ideals common to all mankind’, paying careful attention to ‘the primary and vital interests of a majority…of the other nations’.46 Britain could not hope to frustrate the ambitions of all its rivals, was Crowe's implication. A new realism was necessary. This mood was shared even by the most ebullient of Edwardian politicians. ‘We are not a young people with an innocent record and a scanty inheritance’, Winston Churchill told his cabinet colleagues in January 1914. ‘We have engrossed to ourselves an altogether disproportionate share of the wealth and traffic of the world. We have got all we want in territory, and our claim to be left in the unmolested enjoyment of vast and splendid possessions, mainly acquired by violence, largely maintained by force, often seems less reasonable to others than to us.’47

The spirit of Edwardian diplomacy was pragmatic acceptance that Britain now had to compete with ‘world states’ of broadly equal capabilities and appetites. A second insight followed. More than ever before, retreat into blue water isolation was impossible. The gradual integration of world politics since the 1880s was now complete. The fate of distant regions could not be localised: faraway rivalries led back ineluctably to the balance of power in Europe. The future of China, the Arab Middle East, Portuguese Africa or the Belgian Congo would be settled by the European great powers with the United States and Japan as their junior partners. Alarming from one point of view, this vision of a Eurocentric globe offered some consolation. It seemed to rule out the danger that Britain's rivals could make dramatic territorial gains by a military or diplomatic coup. The existing distribution of global influence and the colonial ‘share-out’ it embodied could only be changed by diplomatic agreement. Unless, that is, it was upset by a major breakdown of the European balance and the sudden emergence of a dominant superstate. The logic of this was that the British system could best be protected by the strenuous exercise of Britain's influence in European politics, with the right to be consulted, and the capacity to intervene, if the continental balance were at risk. To many late Victorians, the prospect of alliances and alignments with the continental powers had been unwelcome, even dangerous, and the threat of a European combination against them a real one. To their Edwardian successors, it seemed that the latent conflicts between the European powers now ran so deep that only by incompetence or abdication could Britain be isolated. This was the lesson of the ententes with France and Russia. An active, flexible diplomacy in Europe was thus the best guarantee of imperial safety. The ‘balance of power’ was not just an ideal: to the assumptions on which Edwardian diplomacy was based it had become a necessity.

These elements of Edwardian grand strategy crystallised in 1912 as the naval competition with Germany intensified. London rejected the German demand for its neutrality in a future war as the price of a naval ‘holiday’. The whole point of naval primacy was to ensure Britain's capacity to intervene against disturbance of the continental equilibrium. Indeed, maritime power was her principal claim to great power status. The cost, as we have seen, was an even greater concentration of naval strength in the North Sea to deter aggression by Germany. The consequence was a naval withdrawal from the Mediterranean, the sacrifice, on a superficial view, of imperial to domestic safety. But the senior ministers of the Asquith cabinet vehemently rejected this implication. Churchill (First Lord of the Admiralty), Haldane (Secretary of State for War), Lloyd George (Chancellor of the Exchequer) and Grey (Foreign Secretary) all agreed that Britain's Mediterranean interests would only be in danger if she had first been defeated in the North Sea. Whatever setbacks she might suffer in the region would quickly be reversed once command of the sea had been gained in the decisive northern theatre.48 And, anyway, Churchill insisted, by 1915 the Royal Navy would be strong enough to return in force.49Meanwhile, overwhelming strength where it mattered most, and the purchase that gave in European diplomacy (above all in securing the friendship of France), were the real foundation of British world power. They were the vital source of leverage against the aggressive designs of rival powers; the best guarantee that, short of an earthquake in world affairs, any redivision of the global spoils could only be slow and partial. And, while British claims to new territory or wider spheres were sure to be contested, there was no reason to think that holding what she had (no mean inheritance) was now beyond her means.

The credibility of these assumptions would soon be tested in the First World War. But, in the meantime, the combination of entente diplomacy and naval concentration had achieved a striking recovery from the isolation and vulnerability that British leaders had feared during and after the South African War. More to the point, it had done so without driving a wedge between the different elements of the imperial system. Of course, the British taxpayer bore the overwhelming brunt of the financial burden. In that sense, a revolt at home was always the greatest threat to imperial cohesion. There were acrimonious struggles in cabinet over the naval estimates in 1908–9 and again in 1914. But, despite the demands of welfare reform and a fierce parliamentary lobby against the surging costs of the naval programme, domestic opinion accepted the dramatic rise in naval spending (from £31 millions a year in 1904 to £51 millions in 1914). It did so in part because the invasion of Britain seemed as great a danger as the loss of empire – exactly the premise on which both foreign and naval policy depended. Indeed, naval and diplomatic doctrine rendered meaningless the distinction between domestic and imperial interests. In the white dominions, this formula was less readily accepted. Dominion public opinion had been roused by the fear that Britain's naval decline would expose the Empire to external attack. If the Empire were broken up, remarked the (New Zealand) Nelson Evening Mail, ‘in ten years the Asiatic population of New Zealand would exceed the European’.50 In Canada, however, the dominion's response was caught up in a bitter party quarrel between those who favoured a local ‘tin-pot’ navy and those who preferred a direct contribution to the cost of new dreadnoughts – the policy of the premier Borden after 1911 but blocked by his opponents in the Senate. In the Pacific dominions, where the results of Churchill's concentration policy were felt most acutely amid growing mistrust of Japan, there was marked reluctance to see the battleships built by local money deployed far away in northern Europe. ‘As a Briton’, remarked the New Zealand defence minister, ‘[I] would like to see a consolidated Empire strong enough to stand without the Entente cordiale.51 In practice, Australian and New Zealand leaders had little option but to accept Churchill's insistence that their security lay not in little local flotillas but in the Royal Navy's ability to face down the threat to its maritime primacy. ‘The situation in the Pacific’, he told them in April 1913, ‘will be absolutely regulated by the decisions in the North Sea’.52 After all, whatever its shortcomings, this version of imperial defence was plausible. The alternative, a more far-reaching coordination of military resources, might restrict the autonomy of dominion governments without giving them more influence on British grand strategy. Indeed, the great success of Liberal policy after 1905 had been a credible defence of British world power without recourse to Chamberlainite schemes of imperial unity and tariff reform. More remarkably still, at a time of rising international tension, it avoided the necessity of levying heavier costs on India, so long the milch-cow of imperial defence. A heavier load on the Indian taxpayer would have aggravated the resentments that Morley's reform was meant to soothe. Instead, from 1904 to 1914 (while Britain's defence spending was doubled), the Indian military budget rose barely at all.53

In the decade before the outbreak of war, British leaders exploited the errors and weaknesses of their imperial rivals and the new opportunities of global politics. They reinforced Britain's role as the strategic guardian of her worldwide system and in doing so shored up her imperial authority. But they had not of course devised a final solution to the problem of imperial security. Nor could they rule out extending the territorial burdens over whose vast scope official opinion was always fretting. In the partitioned world, re-partition was likely sooner or later. Portuguese Africa and the Belgian Congo might change hands if their owners went bankrupt or their commercial life became dominated by foreign interests – an outcome that Grey regarded as all but inevitable.54 Indeed, Britain and Germany reached agreement in principle on the division of Portugal's colonies in 1913.55 In the unpartitioned world, the difficulties of an amicable share-out and the risks of collision were considerably greater. In China, the revolution of 1911 had installed an unstable republican regime. The breakdown of central authority and the rise of regional warlords seemed likely to test the cooperation of the outside powers – Britain, Russia, Germany, France, the United States and Japan – even more than the Boxer Rebellion of 1900. Defending Britain's large slice of the Chinese commercial cake was unlikely to grow easier or its diplomatic and military costs less burdensome.56 Most dangerous of all was the political flux in the Near and Middle East. In Persia, it seemed more than likely that the insistent pressure of Russian influence in the north and the gradual detachment of whole provinces like Azerbaijan (where there were 10,000 Russian troops by 1913) from Persian control would be mirrored in a British quasi-protectorate in the south and southwest of the shah's dominions – a tendency that the British oil concession there was bound to accentuate.57 In the Persian Gulf and in the Hedjaz – the seat of the Muslim Holy Places – the British watched uneasily as the new ‘Young Turk’ regime in Constantinople cut down the freedoms of local notables – like the Sherif of Mecca, hereditary guardian of the Holy Places – and drove its railways and garrisons deeper into Arabia. An Ottoman ‘forward policy’ would push up the cost of British influence.58 Worse still, after its catastrophic losses in 1912–13 (Libya, the Dodecanese, Crete and the rest of Ottoman Europe save Eastern Thrace), the Ottoman Empire might become the catspaw of Germany. In the Baghdad Railway agreement of 1914, the British insisted that no German-owned railway be allowed to reach the Gulf and challenge their political and commercial influence there. But here, as in North Persia, the British were well aware that the mutual antagonism of their European rivals was the key to the economical defence of their regional interests.

British leaders had made the best of the new geopolitical universe. They had squared the circle of domestic reform, imperial unity and great power rivalry. Buoyant revenues and diplomatic fortune had come to their rescue. But a real equilibrium had eluded them. Ultimately, their ‘system’ depended upon the stability of great power relations in Europe and the conservative ethos of ‘old diplomacy’. It assumed that general war was improbable and that, if it broke out, neither side could gain decisive victory. It rested upon the accidents of dynastic politics in Central Europe, and the fate of Europe's semi-colonial periphery in the Balkans. But Europe was not the still calm centre of a restless world. And its stresses were soon to erupt with volcanic force.

The political economy of Edwardian Empire

The cohesion of the British world-system depended in the last resort upon Britain's independence and the guarantee of strategic protection offered by her naval and military power. But it was unlikely to last long if the British economy began to lose speed. Yet, by some measures, economic decline seemed to have set in by 1914. The era when Britain had been the unchallenged workshop of the world was over. In Germany and the United States, new industrial economies had grown up. In both iron and steel production (the basic index of industrial power), they had outstripped the first industrial nation. American output was three times as great; German production of crude steel was twice that of Britain by 1910.59 As they industrialised, both Germany and the United States closed their doors to many British-manufactured imports, driving them towards other markets. Worse still, they began to compete strongly in export markets favoured by British manufacturers, especially in Europe, and invaded the home market as well. Not surprisingly, Britain's share of world trade fell steadily. Manufactures began to make up a larger share of British imports, rising to some 25 per cent by 1913. And, while Germany and the United States moved rapidly into the second generation of industrial products – electrical goods, chemicals, motor vehicles – Britain seemed to lag behind. Technological conservatism and excessive dependence upon ‘old-fashioned’ industries like cotton textiles, signalled an apparent loss of managerial dynamism, the onset of commercial sclerosis, and the triumph of a complacent upper-class amateurism over the scientific management demanded by the scale and scope of modern industry.

The implications of failure to compete with the most advanced and successful industrial economies were dire. If the British economy grew less swiftly than its main competitors, British consumers would become (relatively) poorer, and their demand for the commodities of Britain's trading partners in the extra-European world would slacken. If British technology stagnated, then new industries would be slow to emerge when old products like textiles could no longer compete with lower-cost rivals in the industrialising world. If neither exports nor imports kept pace with those of rival powers, Britain would gradually lose its claim to be the marketplace of the world, and the natural terminus of the world's merchant shipping. And, as the profits of trade and industry declined, it might be harder to find the capital for the investment overseas whose proceeds had buoyed up the buying power of the British consumer. Britain's trading partners within and without the Empire would turn instead to new sources of capital, to new and more vigorous markets, and to more up-to-date suppliers of the technologies and manufactures they needed. As the vicious circle tightened, the means to sustain the costly apparatus of world power – the expense of which was subject to constant inflation – would begin to dry up. The allies and associates of the British system would drift at best towards centrifugal autonomy, at worst towards a new constellation of imperial power. The British would enter the well-filled graveyard of empires.

But it is easy to exaggerate the symptoms of commercial decline and misleading to assume that the British economy was competing head on with its American and German counterparts. In trade as in strategy, the interests and capacities of Britain's main rivals limited the sphere of outright confrontation. The peculiar trajectory of British economic development meant that it complemented the growth of new industrial powers as much as competing with them. It was the viability of this ‘economics of coexistence’, rather than a Darwinian struggle for industrial supremacy, that would determine the fate of the British system.

In 1913, the four largest industrial economies in the world were the United States, Britain, Germany and France. The American economy had the largest output (at around £8 billion a year in current prices). Britain and Germany had smaller economies of roughly equal size (different estimates place Britain's GDP at between £2.2 and £2.5 billion, Germany's at £2.8 billion). France trailed some way behind; Russia was an industrial minnow. But this crude ranking conceals important differences. The British had little in common with the other industrial powers. They were still the world's greatest trader. Though their share of world trade had fallen with the huge increase of commercial traffic, they still exported and imported far more than any other state: 40 per cent more than Germany in 1913, nearly 60 per cent more than America. Their share of the world's manufactured exports at 30 per cent was comfortably ahead of both. With commercial primacy went a commanding superiority in shipping and business services. In 1907, they earned from these some £107 million, nine times the American figure. Britain's steam-powered mercantile fleet of over 10 million tons was four times the size of Germany's. British overseas banks were ubiquitous and their financial services indispensable to international business outside Europe and North America.60 Their strength and importance owed much to London's unrivalled status as an international money market. At more than £4 billion, British overseas investment made up some 44 per cent of the world's total of foreign-owned capital in 1913. It was more than twice the size of France's, more than three times Germany's, and six times that of America. And, unlike the investments of the French and Germans, it was to be found not in Europe but spread across the world, in the Americas, India, Africa and the Pacific. Taken together, the income from the export of services and from overseas investments contributed one-third of Britain's external earnings (the rest came from merchandise exports). Net export of services contributed over 5 per cent and net overseas income over 8 per cent of gross domestic product in 1913 – a greater proportion than that of any other major power.61

Thus Britain was quite unlike its main economic rivals. It was not just an industrial state, but an agency state (providing commercial services) and a rentier state as well, drawing a huge proportion of its wealth from these latter functions where the growth of international competition was much less acute. This distinctive pattern reflected Britain's comparative advantage as an economic power. In a seaborne age, its location between Europe and America and its excellent maritime communications made Britain a natural entrepot. A compact landmass and a dense rail network had encouraged simultaneously the growth of specialised industrial districts (like Lancashire, West Yorkshire, the Potteries, the Black Country, Clydeside, Tyneside and South Wales) and a centralised machinery of commerce and finance with its headquarters in London – a winning combination. With the second largest reserves of hard coal (thermally the most efficient) in the developed world, energy for industry and transport was abundant. With a large population, rapid population growth but an agricultural sector that employed proportionately far fewer workers than its German, French and American counterparts, Britain had relocated much of its agricultural production to overseas countries. In the ‘white dominions’ especially, this helped to turn its emigrant demographic surplus into suppliers, customers and borrowers on a grand scale. But it was the enormous growth of world trade and the world economy (to which the British had contributed heavily) that yielded a vital dividend of wealth in the last decade before the First World War.

The value of international trade is usually thought to have increased tenfold between 1850 and 1913. Between 1860 and 1880 it doubled from about £1.5 billion to £3.0 billion. The pace slackened between 1880 and 1900, by which date it had reached nearly £4 billion. Then, between 1900 and 1913, it doubled again to nearly £8 billion.62 This phenomenal commercial growth was driven by the urbanisation and industrialisation of Europe (which accelerated sharply after 1870) and the opening up of new agrarian regions to supply the food and raw materials it needed. The key was the ever-falling cost of transport by sea and rail, the effect of which was initially to drive down the price of many agricultural commodities. But, after 1896, when wheat reached its lowest price for a century, commodity prices recovered, setting off the long boom in world trade up to 1913. As rural producers around the world reaped richer rewards, they bought more imports and borrowed more money. Vast new tracts of land in Argentina and the Canadian West were cultivated. Wheat was exported from India to Europe. West African farmers took up cocoa. The demand for rubber and oil began to soar.

Not surprisingly, in such dynamic conditions, the demand for capital became intense. It was needed above all to finance the transport infrastructure without which development would be retarded, curtailing the profits of speculation in land, mines and urban property. Commodity-producing regions competed furiously to bring their goods to market and capture the largest share. They needed the services of shipping lines, shipping agents, insurers, banks and brokers. They needed the fast accurate commercial information provided by the telegraph. In turn, they spent much of the proceeds of their newfound wealth on consumer goods, especially clothes and cotton goods which, in non-industrial countries, typically made up between 15 and 30 per cent of imports.63And, as the traffic in trade, capital and commercial information grew in scale and velocity, they experienced its ‘globalising’ effects. Their port-cities, the hinge between hinterland and world market, swelled in size and importance, especially those on the great trunk routes of maritime trade across the North Atlantic, to the River Plate and eastward via Colombo to Singapore, Hong Kong and Yokohama. Commercial elites waxed richer and their views more influential. Diasporas expanded and prospered as their networks became more valuable. Information, fashion, opinion and news were more widely, swiftly and sometimes accurately disseminated.

The principal great power beneficiary of these trends was Britain. The growth of world trade after 1900 was a huge opportunity. British steamship tonnage rose from 7.2 million in 1900 to 11.2 million in 1913.64 The ‘invisible’ income from commercial services shot up from £109 million to over £168 million.65 The value of British exports rose from £291 million to £525 million,66 forming by 1913 some 25 per cent of GDP.67 The total of British investment overseas all but doubled, and so did the income that it yielded – from £103 million to £199 million. Returns on investment abroad was now twice the figure for 1873, and four times that of the 1850s.68 The overall surplus on the balance of payments (current account) climbed like a rocket from £37 million in 1900 to £224 million in 1913,69 creating a huge new fund for investment overseas. And, as if to reflect the broadening stream of trade and capital, the number of emigrants from the British Isles to extra-European countries now reached its highest level in the last three years of peace, with Canada, Australia and New Zealand as the most popular destinations.70

This dramatic acceleration in global economic activity, and the active part played in it by Britain and the countries of the British world-system had important consequences for their stability and cohesion. For Britain's own role, the timing had been crucial. The fact that the great rise in industrial competition had occurred in a period of such exceptionally rapid growth in world trade sheltered British industry from its worst effects. Two other circumstances eased Britain's passage into a global economy in which competition was now ‘multipolar’. First, although the neatness of the boundaries should not be exaggerated, the three great industrial powers tended to concentrate in different markets and (to a lesser extent) to specialise in different exports. American exports to Europe were chiefly food and raw materials, like cotton. American competition with British manufactures was strongest in Canada, taking by far the largest share of that country's imports (Canada's total imports in 1913 were $692 million: $441 million from the United States, $139 million from Britain, and $14 million from Germany),71 and in Central America. In 1913, Germany's most important customers were in Europe, to which over three-quarters of her exports were consigned. Sixteen per cent went to the Americas, but only 8 per cent to Asia, Africa and Oceania combined.72 By contrast, two-thirds of British trade lay outside Europe. The Americas took 21 per cent of British exports; Asia, Africa and Oceania 43 per cent.73 Of course, in a hugely increased volume of trade, British exports no longer claimed the same overwhelming predominance even in old-established markets. But this had not prevented (as we have seen) a large increase in British exports. And, while Britain imported a growing proportion of manufactured goods, it was notable that German exports achieved a lower penetration there than in any other industrial country.74

Secondly, Britain retained, and perhaps even enhanced, her astonishing pre-eminence as the supplier of capital and commercial services. Here, too, we should not underestimate the importance of commercial rivalry. But no single grand challenger had emerged. The United States had barely begun to export capital, and except in Canada and Central America was of minor significance as a foreign investor. In Argentina, Brazil and Uruguay, where South American growth was strongest, American investment was negligible.75 The sole exception in the ‘Southern Cone’ was Chile. France, second to Britain in foreign investment, was far behind in industrial output and French capital was concentrated overwhelmingly in Southern and Eastern Europe and in Russia.76 There was little prospect of Britain's spheres being sucked into a French commercial imperium. German investment was much smaller in scale and, like France's, mainly found in Europe. Outside Europe, its infrastructure was underdeveloped. In Latin America, for example, German business found it easier to raise money through London.77 Where German capital competed most aggressively in the extra-European world, it was usually where government pressure had been exerted on German banks and the objects were as much political as commercial.78 In fact, the normal instinct of banks and investors in continental Europe was to cooperate with London and use its services. This was hardly surprising. So long as so much of world trade was financed by sterling bills (the medium for transactions between different national currencies) – and two-thirds of sterling bills in 1913 served trade between third parties – the City would be the natural magnet for short-term funds and foreign exchange.79 These in turn would draw the foreign banks and their deposits to London, swelling still further the mass of capital and credit located there.

In the long decade before the First World War, the impact of commercial change on the British economy had been to alleviate industrial competition and perhaps even to prop up industries – like cotton and coal – that were labour- not capital-intensive. Far from weakening London's grip on its commercial empire, it helped the City to ‘annex’ new provinces (like Argentina), to consolidate old ones (like India, South Africa, Australia and New Zealand), and to advance new tropical bridgeheads into West Africa and Southeast Asia. In the process, vast new assets were acquired and further claims piled up on the productive capacity of new regions. All this signalled a deeper and closer integration between Britain and the varied parts of the British world-system.

For Britain's associates, clients and subjects in that system, the common experience had been the enormous growth of their foreign trade and the inflow of new investment, much of it directed to the improvement of their transport and communications. The weight in their economies shifted further towards the international sector, oriented if not always on Britain as a market then on London as the hub of their trade and finance. In independent countries like Argentina and Brazil, the City's power was felt as keenly as in any colony. They had adopted the gold standard (with its guarantee of convertibility) to attract the foreign (usually London-based) investor. Having done so, they were forced to accept its ruthless discipline. When their imports outran their exports (as happened in the economic cycle), and their foreign credits dwindled, they had either to borrow more abroad or to rein in their home economies by monetary contraction, perhaps both. They dare not offend the money power in London: the consequences of an investment famine were too dire. Without capital imports, their export production would stagnate; without foreign credits (and access to sterling bills), trade would dry up; without foreign trade, public revenues would collapse.80 But the result was to transmit the fluctuations of export performance in exaggerated form into the internal economy: booms were wilder and contractions sharper. Moreover, gold standard countries on the ‘periphery’ soon felt the effects, if a correction was needed in the British economy, to check an adverse movement in foreign exchange. By raising interest rates, the Bank of England could swiftly draw gold and foreign credits into London at the expense of peripheral economies – a technique at which it grew very adept in the years before 1914. The City's pivotal role in world trade (with all its benefits) thus went hand in hand with its tightening grip on the economic life of extra-European states without money-markets of their own and dependent on foreign capital.

The dominions, India and Africa

The white dominions also saw large increases in their foreign trade and (with some variation) in their imports of capital between 1900 and 1913. Here, too, the result was to strengthen the pull of London and (in different ways) to reinforce their attachment to the British system. The most obvious case was Canada where ‘continental’ integration with the American economy had been the main competitor. But the creation of a wheat economy in the Prairie West after 1900 using largely British capital checked this continental drift. The transatlantic route, and its western extension to Winnipeg and beyond, grew busier. The great transport empire of the Canadian Pacific Railway (largely owned in Britain) prospered. Montreal, local metropole of the wheat economy, boomed. When reciprocity (free trade in natural products with the United States) was proposed in 1911 by Laurier's Liberal government, it drew furious opposition not just from Montreal and the Canadian Pacific Railway, but (fatally) from Laurier's Liberal allies in Ontario. For Toronto interests, as much as Montreal, now saw continentalism as a deadly threat to their vision of a national economy. The commercial tie with Britain was the best guarantee of Canadian autonomy, the continuing flow of British funds and the regional primacy of Central Canada in the confederation.81

In South Africa, finally unified in 1910, the London connection was no less critical to the dream of a ‘national’ future. Far more than wheat or wool in the other dominions, gold was the foundation of the South African economy, and the indispensable means of recovery from the catastrophe of 1899–1902. In the years up to 1914, production and employment on the Rand grew rapidly. Gold output rose from £16 million in 1898 (the last year before the War) to £38 million in 1912.82 The workforce followed suit.83 An authoritative estimate in 1914 claimed that gold mining contributed nearly half of government's public and railway revenue. It may already have given half the population its livelihood in what was otherwise (barring diamonds) an impoverished agrarian economy. It was gold that attracted foreign capital; gold that paid for the railway system; gold that made possible the Union of 1910 and the uneasy partnership of Boer and British. But the bonanza had strings. In the age of the gold standard, the international price of gold was fixed and invariable. Yet the cost of recovering the low-grade ores of the Rand rose remorselessly as the mines dug deeper. Profit depended upon driving costs lower, especially the cost of labour. Partly as a result, ownership of the mines was concentrated in the hands of a few large groups, of which the largest, the ‘Corner House’ group (Wernher, Beit, later the Central Mining Investment Corporation) controlled 50 per cent of production.84 Corner House was managed from London – the world centre of mining finance – to which its principals had retired. On its fortunes depended much of South Africa's commercial credit, and hence the experiment in white self-government embarked on in 1910.

Powerful as it seemed, mining capital depended upon the Afrikaner-led government of Botha and Smuts for political support. It faced an increasingly embittered white working class in Johannesburg furiously opposed to ‘dilution’ of the workforce by black or Chinese labour.85 Production, profits and share price were dangerously vulnerable to strikes and sabotage. White opinion (and almost all voters were white) was susceptible to swaartgevaar (‘black peril’): the fear of black competition for jobs and a black presence in the towns. Afrikaner opinion (and the majority of whites were Afrikaners) disliked and mistrusted ‘foreign’ capital and the ‘Randlords’. With their backs to this white wall, Smuts and Botha drove a hard bargain. They insisted on the expulsion of Chinese indentured labour – the red rag to the white bull – and encouraged the Randlords to replace foreign-born (largely British) mineworkers with local-born Afrikaners.86 In the Mines and Works Act of 1911, they imposed an industrial colour-bar on the Rand. But, in return, they outlawed strike action, crushed white labour militancy spectacularly in 1914 and sanctioned the huge increase in black migrant workers. Behind this compromise, we can see an anxious attempt to mitigate the political risks of exposure to external economic forces. But in no other dominion did the political and social structure (with all its racial conflicts and inequities) rest so completely on an industry bound so inflexibly to the London market. Nor on one so perilously close (or so it seemed until the mid-1930s) to commercial failure and terminal decline.

Australia and New Zealand had suffered badly in the 1890s when falling export prices, over-borrowing, a banking crisis (as overseas deposits were withdrawn and their London assets shrank) and monetary contraction plunged them into depression. The steady rise in commodity prices in the new century brought relief and recovery. Australian exports reached £80 million by 191387 and an official commission rejoiced at the world's insatiable appetite for Australian products.88 Yet Australia failed to attract new British capital. In London, disillusionment after the crash of 1893 was reinforced by mistrust of the new Commonwealth's blend of economic nationalism and home-grown socialism. The widening sphere of wage arbitration, state enterprise and protective tariffs caused irritation in the City.89 Instead, Australians financed their capital needs and overseas debts from their rising export income. But none of this meant secession from the commercial world centred on London. Australian ‘socialism’ was not a reversion to autarky but (like the insistence on all-white immigration) a tactic to reduce the dominion's exposure to the external shocks felt so sharply in the 1890s. Economic realities dictated reliance on the British market for half of Australia's rising exports, and on the City for the short-term funds that lubricated trade. As growth picked up, so did the need for British capital. Whatever their ‘socialist’ leanings, Australian leaders showed faultless conservatism when it came to banking. The Commonwealth Bank, set up in 1912 to meet the need for a central bank, carefully followed the fiduciary practice of the Bank of England.90 Not coincidentally, perhaps, there was a sharp rise in British investment thereafter. In New Zealand, where the 1890s had been less painful, the British connection was even more important. Nearly 80 per cent of New Zealand exports were destined for Britain and perhaps 90 per cent of public debt was held there.91 Tariffs were moderate, compensating (if that) for the fall in ocean freights and import costs.92 Banking practice was cautious to an extreme lest the London investor be frightened again.93 Above all, New Zealand farming was adapted to meet the surging demand in Britain for frozen meat and dairy products. The reward was an astonishing burst of economic growth. Between 1896 and 1911, production rose by 60 per cent, the area under white occupation by 50 per cent and population by 40 per cent. The fruit of this closer integration was a virtual remaking of New Zealand society, forging a political economy that would last for more than fifty years.

For all the overseas dominions, the boom in global trade had been a chance to strengthen their economies and stabilise their politics. But it had not brought greater freedom from London's commercial influence. In economic terms, as well as political, ‘nation-building’ in the white dominions meant greater dependence not less on the British market and the financial machinery of the City of London. In a global marketplace, access to capital, information and expertise from the commercial centre was more essential than ever to dominion producers whose fortunes depended upon good connections with London, perhaps even a base there. In India, which lacked self-government, the pattern was more complicated. In commercial terms, India's pattern of foreign trade was exceptionally valuable to London. India ran a trade surplus with Europe, the United States and Southeast Asia but a deficit with Britain, whose best customer it was. India's remittances of foreign exchange helped London meet Britain's trade deficits in America and Europe, lubricating the international payments system without which world trade would have expanded much more slowly. But India was also required to meet an annual bill for the interest payments on borrowed British capital, for the pensions of British officials and for the ‘hire’ of some 70,000 British troops normally stationed on the sub-continent. Since long-term borrowing was very difficult in India, and its own revenues were inelastic, the government of India relied on British lenders to supply the capital it needed for spending on public works like railways and irrigation.

In the 1880s and 1890s, this economic relationship with Britain had been strained. India had a silver-based currency and silver's value fell sharply against gold. The government of India had to find more and more silver rupees to pay its sterling debts. It faced a dangerous spiral of rising taxation (increasing discontent), heavier borrowing (to cover the deficit), ever-heavier debt service and the spectre of a default – a political and financial catastrophe of unimaginable proportions. India's double function – in Britain's payments balance and military ‘economy’ – was at risk. In practice, after 1900, this danger quickly receded. At London's insistence, the Indian government adopted a ‘gold exchange standard’. The rupee–sterling exchange rate was fixed, and a fund of gold and sterling assets established in London to maintain the value of the rupee and cover any shortfall in Indian remittances.94 The experiment was a success, but chiefly perhaps because it was launched at a time when India's foreign trade and payments surplus were also rising rapidly. India's surplus on commodity trade was about Rs 200 million in 1900 and Rs 700 million in 1910 and Rs 570 million in 1913.95 It was true that India continued to run an overall deficit with London that arose in part from British loans and the service charges that London imposed. This had to be met by further borrowing.96 But the scale was comparatively modest (perhaps £6 million per year) and part of it was due to new investment in railways and irrigation in a period of commercial expansion. It was also true that the domestic impact of India's deepening involvement in international trade was muffled by the vast scale of the rural economy much of it close to subsistence and threatened by periodic famine – although export-producing regions did experience rising living standards.97 The bar on tariffs imposed by London made diversification into industry more difficult. Overall, however, the pre-war years saw the closer integration of India into the British world-system. India remained Britain's largest market. Its export surpluses were larger. Its payments to Britain were met without strain. Most important of all, perhaps, financial stability and economic growth underwrote the political system of the Civilian Raj. Relieved by prosperity from the pressure to tax more heavily or intervene more deeply in the agrarian economy, the Raj had no need to seek wider cooperation from its Indian subjects or pay the price in concessions.98 It could balance its imperial obligations and the Indian books. This was the vital condition if it was to keep its freedom as much from its overlords in London as its subjects in India.

But perhaps nowhere were the effects of trade so striking as in Britain's new tropical dependencies in Afro-Asia. The commodity boom galvanised their economies after 1900. The rapid growth of production and export sales attracted larger British-based companies with better access to credit and capital than indigenous traders. In colonial Malaya they took the lead in rubber and tin.99 In British West Africa, rocketing exports of cocoa and palm products transformed the prospects of the ‘Coaster’ firms.100 The colonial states could push railways into their vast new hinterlands as their credit rose with their (customs-based) revenues. As the interior opened up, the scale of British business was transformed. Large British firms crowded out their local African rivals. The rush for Nigerian tin excited the City.101 Shipping and banking fell under the control of the self-made magnate Alfred Jones, chairman of Elder Dempster and the British Bank of West Africa. Liverpool had long been the real metropolis of the British West African coast. Now its commercial reach extended to the fringes of the Sahara.102 By 1905, the Lagos Chamber of Commerce was exclusively white.

After 1900, then, the British exploited to the full their comparative advantage as traders, shippers and financiers and their dominance in cotton textiles – the universal consumption good in Afro-Asian markets. The demand for their capital and commercial services and the primacy of London as the clearing-house of trade and investment deepened the mutual dependence between the different elements of the British world-system: the British Isles; India; the white dominions; and the property, assets, concessions and installations that made up the City's commercial empire in non-British countries. By 1913, perhaps one-third of British net assets were located overseas. British capital moved freely between the informal empire, the white dominions and the tropical dependencies. New business empires in railways and shipping combined interests in all three. With its monetary controls now centralised in London, the Indian economy (and its vital functions) had been brought under closer imperial supervision. For the white dominions, not only were British markets and capital indispensable, but close contacts with London were needed for local businessmen who hoped to expand abroad, invest surplus funds or exploit their expertise in less developed economies. In the British system, all (or almost all) commercial roads led to London. They would do for so long as London could play its part in global commerce; so long as the British economy could produce, consume and invest on an imperial scale; so long as its chosen partners could maintain their hectic growth; and so long as Britain was the safest and strongest haven for foreign money. But, on all these scores, even in the boom years up to 1914, there was at least some room for doubt.

Some of the symptoms of later weakness were already visible. For an advanced economy, the British were much too dependent upon the comparatively simple and labour-intensive technology of textile-making. They depended too heavily on coal, as an export and as a fuel. Their rate of saving was low and the failure to invest at home was reflected in stagnating industrial productivity. As many social critics complained, too much of the population was paid too little, a consequence of widespread under-employment. This limited consumption and promoted the migration that remained so marked a feature of British life. Among Britain's most dynamic trading partners, there were signs that the furious expansion of their agrarian economies was levelling off: in New Zealand, Canada and Argentina. Nor was the City's great role as banker to the world without risk. The American crisis of 1907 had shown that funds that rushed in could also rush out. The large volume of short-term funds that London attracted were potentially destabilising. Just holding them there might mean interest rates too high for domestic growth. Above all, perhaps, by relying so much on the proceeds of global trade, the British had staked their future on a world without war, or, at least, on a world without world-war. Some of these anxieties lay behind the campaign for tariff reform in Britain. Protection was meant to reduce Britain's over-exposure to external economic forces. Protectionists like Milner insisted that, in the age of world-states, cosmopolitanism was dead and its champions deluded. At the time prosperity helped deflate the protectionist cause. The imperialism of free trade still ruled. Its theory and practice had been the secret of both Victorian expansion and its Edwardian climax. The implications of its breakdown were massive. Acceptance of its logic and recognition of its benefits had held together the disparate elements of the British world-system. It weathered the Edwardian squalls. But its real test was to come.

The politics of cohesion

Like any worldwide empire, the British system was a prey to centrifugal forces. Resentment, recalcitrance, resistance and rebellion came naturally to those who felt (in different ways) the weight of British political and financial power. Political independence, economic self-sufficiency, or cultural autonomy promised obvious gains to at least some colonial (and semi-colonial) elites. But only if the conditions were right, the costs were low and the benefits clear.

In the long Edwardian decade, the economic and geopolitical conditions we have examined were, in general, imperially benign. They favoured not the break-up of empire but its cohesion and closer integration. In terms of grand strategy, the danger to imperial solidarity had been twofold. If British power was insufficient to exclude rival influence from its spheres, or promised inadequate protection against external attack, colonial leaders would drift towards home-grown policies in defence and diplomacy. In dependencies, the prestige of British rule would fall, forcing a choice between coercion and concession. The second danger was that the costs of defence would spiral uncontrollably. In the British system, they would fall most heavily on taxpayers at home and in India. The likely consequence would be a domestic revolt against imperial commitments and an Indian revolt against a grasping Raj.

In the event, both dangers were contained with surprising ease. Great power competition after 1900 was largely turned to Britain's advantage. Crucially, the main burden of defence was naval, and the main focus of fear was home not colonial – in Britain itself. Hence British opinion was easily rallied and the Indian taxpayer left unscathed. As an added bonus, the self-governing dominions were readily persuaded of the threat to British sea-power and of the urgency of offering (some) help. Though friction persisted (within the dominions and between their governments and London), it was smoothed by the credibility of British power, the aggressive demeanour of German diplomacy and the global scale of great power rivalry: isolation was not an option. Economic trends were similarly favourable. In the race for growth, colonial politicians and businessmen looked more than ever to Britain for money, markets or migrants. In a world of dynamic commerce, autarky was a cul-de-sac. Profits came from large combines and wide connections. In Britain, commercial buoyancy was especially timely. Naval spending floated on a high tide of revenue. Lloyd George's new taxes, controversial as they were, easily paid for the increase in naval and social expenditure.103 The economic burden of rearmament was easily carried by the enormous surplus in the balance of payments. The sense of general prosperity checked the appeal of tariffs and helped smother the campaign for imperial preference. Since tariff reform and its political rider ‘imperial unity’ (between Britain and the white dominions) were at odds with the free trade basis of commercial empire and excluded India, their disruptive potential for the British system would have been considerable. Of course, the Edwardians were not free from economic anxiety. In The Nation's Wealth (1914), the radical MP Leo Chiozza Money gloomily compared Britain's natural resources with those of Germany and the United States. But even he conceded that Britain was still at the mid-point of her greatness: decline lay more than a century away.

In Britain, then, the political climate was sympathetic to empire but unpropitious for schemes of imperial ‘reform’. Public alarm over defence shone a fitful spotlight on the white dominions as sources of loyal manpower. Their commercial prospects and migrant appeal were touted more aggressively in the British press.104 Imperial news was more widely and professionally reported. An influential section of the political elite (on both sides of the party line) was attracted to the idea of ‘closer union’ with the sister nations of ‘Greater Britain’. But wide differences existed on timing and method even among the enthusiasts. A broader consensus prevailed that, while imperial unity was desirable, perhaps even inevitable, imperial federation was at best premature, at worst unworkable.105 Towards India and the tropical dependencies, British opinion was complacent. The Morley–Minto reforms had taken India off the political agenda. The commercial promise of tropical territories bought off half the critics of imperial aggrandisement. The new gospel of imperial duty, artfully diffused (not least in The Times), disarmed most of the rest. The radical critique of empire, fanned into flame by the South African War, burned low by the decade's end. In the age of diplomatic detente, constitutional devolution (in South Africa and India) and social reform, ‘imperialism’ was less easily damned as the road to national ruin.106

The dominions

The dominions’ counterpart to this imperial attitude in Britain was the ‘Britannic nationalism’ of their English-speaking populations. Britannic nationalism was both more and less than an affirmation of empire loyalism. It asserted that Canada (or Australia or New Zealand) was (or must soon become) ‘nations’ – the highest stage of political and cultural development. Only as nations could the white dominions escape the dependent, parochial quarrelsomeness of their colonial origins. Only as nations could they offer their citizens security, opportunity and the promise of progress, cultural as well as material. But they must be ‘British nations’, because it was British (or British-derived) institutions, culture, ethnic origins and allegiance (to the British Crown) that held them together. It was being ‘British’ that endowed them with their ‘progressive’ qualities and their sense of a manifest, expansionist destiny. This was a far cry from colonial cringe. Nor was it always a recipe for imperial harmony. Britannic nationalism demanded partnership between Britain and the settler countries not central direction. It meant a dominion commitment to imperial defence but a dominion voice in imperial policy. It viewed empire as a cooperative and ‘Britishness’ as a common inheritance – not the private property of the ‘old country’.

There were good reasons why Britannic nationalism and its message of political community among the British nations should have been influential (though not uncontested) in the pre-war years. The upsurge in trade, migration and investment showed that British expansion, far from being over, was more vigorous than ever. Whatever metropolitan doubters might say, there was little dispute on the imperial frontier that the future belonged to ‘white men's countries’. So long, that was, as they took pains to defend their ‘inheritance’. It was significant that alarm in Britain over Germany's threat to the naval shield coincided with dominion fears of the ‘Yellow Peril’ and of Japanese hegemony in the Pacific. These common sources of fear and hope took on added colour in each dominion. In Canada, it was resentment at the French Canadians’ ‘disloyalty’ and their obstruction of the nation-making programme of the English Canadians. In Australia, the defence of ‘White Australia’ against an imaginary Asian invasion became the central purpose of the federation achieved in 1900 and the guarantee of its social cohesion. In New Zealand, racial purity as a ‘British’ country was part of the message of social reform in the Liberal era after 1890. Here, too, external defence and internal peace made a double case for Britannic sentiment. Relations between the dominions and Downing Street may have been tetchy. The scale of contribution to imperial defence was bound to be controversial – bitterly so in Canada. The cause was not so much doubt about the imperial association as division over how its burdens should be shared.

In South Africa, Britannic nationalism played a different part. The white ‘nation’ was predominantly Afrikaner not British. The grant of self-government to the former Boer republics had brought Afrikaner not British politicians to power. Union in 1910 gave them control over a unitary (not federal) dominion. To the ex-proconsul Lord Milner, conceding self-government before the British could form a majority among whites had been disastrous. ‘I absolutely decline’, he wrote in 1908, ‘to take any further account of South Africa in drawing up the balance sheet of empire.’107But, he conceded, there was a saving grace. Because South Africa was ‘technically a British country’, British emigrants could exert their improving influence without losing their nationality. ‘It may be’, he concluded, ‘that it is the destiny of the Englishman in South Africa to turn the scale in South Africa to save the better native [i.e. Afrikaner] element from being submerged by the worse.’108 The leading ‘English’ politicians in South Africa adopted this view. Their Progressive (Unionist after 1910) party embraced the classic programme of Britannic nationalism: support for immigration, the ‘Imperial Navy’ and imperial preference in a ‘united…nation, forming an integral part of the Empire and cooperating harmoniously with Imperial authority’.109 But the party's leaders saw that, with an ‘English’ minority, opposition to the Afrikaners on purely racial lines was futile. Instead, their object must be to divide the ‘extreme racial backveld’ section from the ‘progressive’ elements under Botha and Smuts.110 It was vital to prevent the Free State politicians, Hertzog and Steyn, and their ‘cultural nationalist’ allies in the Cape's Afrikaner Bond, from dominating the government.

Botha was too shrewd to wear his heart on his sleeve. He was an adept of the ambiguous phrase. His regime, grumbled Milner's South African confidant Percy Fitzpatrick, was ‘dishonest and unclean’.111 But he made a reassuring figure. ‘Ties with the Mother Country must be strengthened’, he declared in 1910. He wanted a ‘South African nationality…able to take an honourable place in the ranks of sister states’.112 ‘Botha really wants to do what is best for the British Empire’, wrote Walter Long, a senior British Conservative who met him at the Imperial Conference in 1911. It would be disastrous to alienate him.113 Even Milner agreed he was better than any alternative.114 Both urged in favour of Jameson's policy of conditional cooperation. Botha's own motives are hard to reconstruct. Fitzpatrick believed that both he and Smuts had realised that they could not rule through the ‘Dutch’ (i.e. Afrikaner) party alone.115 This analysis seems plausible. Certainly, they showed little inclination towards the cultural nationalism of their Cape and Free State allies, though they were wary of its ethnic appeal. They preferred to feel their way towards a more inclusive ‘South Africanism’ acceptable to ‘moderate’ Afrikaners and English – the old programme of Rhodes before 1895. So in the fluid aftermath of Union the local Britannic nationalism operated in low key. But its role was crucial nonetheless. For it served as a warning to Botha and Smuts that repudiation of the spirit of empire membership (never mind the letter of British sovereignty) would drive the English into all-out opposition and force them into the arms of those who wished to reverse the verdict of 1902.


Among the dominions, adhesion to the British system was a matter of sentiment and calculation. It was nourished by the feeling of ‘Britishness’, the benefits of ‘British connection’ and the promise of influence over British policy. Neither sentiment nor calculation had so much scope in India. Indians, after all, had almost no share of executive power in British-ruled (not princely) India. Their direct influence on imperial policy was negligible. And, as Indian nationalists regularly complained, India paid a tribute to Britain in money and men – burdens that London dared not impose on the dominions.

The British ‘Civilians’ (the name was gradually slipping out of use) were eager to cultivate Indian loyalty but uncertain how to do it. By 1900, the dominant strain in their policy was an appeal to ‘feudal’ attitudes they thought typically Indian: a sense of fealty; a respect for authority and the glamour of power. If India's natural leaders were princes and aristocrats, their instincts were conservative and royalist. Hence British rule should clothe itself in imperial purple and assume the dignity of the Mughal empire. The corollary was indifference approaching hostility towards those Indians who had responded most enthusiastically to the modernising, liberal and ‘scientific’ face of British rule: the ‘microscopic minority’ organised in the Congress. Yet, in reality, this group could not be ignored. The Civilians might have liked a feudal polity: they certainly needed a profitable colony. They had to foster the modern India they came to dislike. They had to tolerate the Indians who helped to make it work. And they had to accept that the microscopic minority had the political means to embarrass their rule and upset their faraway masters in London.

As we have seen, the Congress did this to some effect in the years after 1905. But, in a larger view, political conditions in the pre-war Raj did not favour a serious assault on India's subordinate place in the British world-system. The British had been able to stabilise their military spending, a prime grievance of nationalist politics. Good times in trade took the heat out of swadeshi agitation in Bengal. The princes were appeased with the promise of non-interference. Muslims were conciliated by separate electorates. The Congress moderates received their schedule of constitutional reform: disappointment was buried in the small print. Unappeased were the followers of Tilak whose ‘new party’ principles bore the stamp of ‘cultural nationalism’: the repudiation of British rule, not a plea to share in it. But Tilak was rejected by the moderate majority: without their protection he was crushed by the British.

For all their impatience with the Civilian Raj and its parsimonious concessions, the Congress leaders were boxed in. In theory, they could have widened their popular appeal. They could have taken the Tilak road. But this was the low road to power through the cultivation of ‘sub-national’ feeling in India's linguistic provinces: playing on religion, caste or ethnic prejudice. It was a road the Civilians were determined to block. But the Congress leaders rejected it anyway, favouring instead the ‘high’ road: entering on merit the ranks of the Civilians and widening the scope of representative politics. In practice, their ‘national’ programme needed the British to abdicate voluntarily, allowing the Congress, once installed in power, to ‘make a nation’ from above. The only principle on which this nation could be made was the ‘British’ principle: a people unified not by religion or language, but by institutions and allegiance. It was not surprising then that the Congress leaders defined their goal as a status equivalent to that of the white dominions; that they protested their loyalty and proclaimed their attachment to British values. Less confidently than their dominion counterparts, these Indian politicians also asserted a claim to be British, in ethos, attitude and allegiance if not by ‘race’. They felt all the more keenly the ‘racial’ antagonism their aspirations aroused. Hence perhaps the heartfelt plea of Surendranath Banerjea, long the most dynamic figure in Indian politics. ‘May I be permitted to make an appeal…to…the Government of India’, he told the Indian legislative council in 1913,

That they may so discharge their exalted duties that this sentiment may be deepened…that we may all feel and realize, no matter whether we are Englishmen or Scotchmen or Irishmen or Indians, that we are Britishers: fellow-citizens, participating in the privileges and also in the obligations of of a common Empire.116

This was scarcely the promise of unconditional obedience to London's wishes. It was more a demand to be treated with respect. But it also suggested how far the pre-war Congress was from contemplating a future outside the Empire. As with the dominions, it was the terms not the fact of membership it was determined to challenge.

The new empire in Africa

In the old empire, the central question of imperial politics was how far the dominion peoples and Indian elites would identify their interests with the British world-system. In the ‘new’ empire, the issue was more fundamental. The buffer zones annexed to defend the mid-Victorian imperium were a jigsaw legacy of partition. It was hard to imagine their future as loyal imperial communities. Colonial states had to be made before colonial societies could form inside them. In West Africa, British rule before the Scramble had been confined to coastal enclaves. In the partition era after 1884, each enclave acquired an enormous hinterland (the exception was Gambia). Sovereignty was one thing, authority another. Imposing British control on these vast interiors required considerable force: against the Hut Tax revolt in Sierra Leone; against the Ashanti in 1901; against the Yoruba states and Ibo peoples of Southern Nigeria and the Muslim emirates of the North. With the defeat of this inland resistance (Kano and Sokoto submitted to Lugard in 1902) came the moment of political decision.

It might have been expected that the British would carry upcountry the political system they had devised for the Coast. This was far from democratic. But it provided for legislative bodies with nominated African members;117 an English legal system with juries, a bar and a separate judiciary; and the beginnings of municipal government. A ‘creole’ elite spreading east from Freetown (the metropole of Creoledom) had grown up along the Coast, fervently conscious of its progressive, Christian and civilised credentials, and eager to share in the imperial advance.118 But it soon became clear that the British had other ideas.

The dominant factor was the need to impose a colonial pax as quickly as possible and at minimum cost. With few sources of revenue and heavy military outgoings, the British in the interior were eager to settle with the emirs and chiefs they had defeated or overawed. There was no time to replace them or to reconstruct their conquered polities in the image of the Coast. It was easier and cheaper to restore the old regimes on condition of loyalty, and exert British paramountcy directly through a cadre of ‘Residents’ backed up by the threat of force. This was the system devised for Northern Nigeria, variations of which were applied in the Gold Coast and Sierra Leone. It left no room for legislatures, municipalities or English law. When Northern and Southern Nigeria were unified in 1914 to relieve the British Treasury of the burden of the impecunious North (annual revenues £210,000 per annum) at the expense of the South (annual revenue £2 million),119 Lugard, the architect of ‘amalgamation’ was careful to restrict coastal institutions to the old colony of Lagos. He was determined to spread his favoured system of ‘indirect rule’ as widely as possible. ‘Fixing’ the population geographically and socially became the overriding principle of British policy. It meant shoring up, or even inventing, ‘traditional’ rulers, and excluding the ‘interference’ of creole lawyers and ‘speculators’120 from the interior. Not surprisingly, the creole elite became increasingly restive, protesting its loyalty but denouncing the drift towards racial exclusion and arbitrary rule.121 But its influence beyond the coastal towns was limited. The conservative bias of British over-rule was congenial to its ‘traditional’ allies. The cash-crop revolution, bringing rising incomes to an emergent peasantry, eased the strains of conquest. And, with the growth of its customs revenues, the colonial state in British West Africa could afford to govern and tax with a very light hand. Politically, then, the West African colonies were set to become not nations-in-the-making but so many tribal confederacies united only in subjection to their British overlord.122

In East Africa, the onset of colonial rule had been even more abrupt. There were no old enclaves of European rule on the coast. The interior had been a dangerous region, ravaged by the Arab slave trade and endemic warlordism. Once partition began, the British annexed Uganda in 1894 as the white hope of East African trade and a strategic wedge against French advance across the continent.123 Uganda could be ruled in alliance with Buganda, largest and strongest of the Great Lakes kingdoms.124 But the East African Protectorate (‘Kenya’ from 1920) was a different story. With no natural rulers, except the Arab sheikhs along the Swahili coast, no revenues, a railway (to Uganda) to maintain and interior populations fiercely resistant to external control, the East African Protectorate was a financial incubus inside an administrative nightmare. The colonial remedy – white farmers to develop the temperate highlands of central Kenya and Indians to help build the railway – had obvious dangers. The settlers were quick to adopt the programme of their brothers to the south: self-government (only for whites); the throwing open of land to white purchase; a white citizen militia (like the Boer commando) for security; and the exclusion of Indians from political life and the ownership of land.125The settlers extracted the ‘Elgin pledge’ effectively if not formally reserving the Kenya highlands for whites. But they were far too few in number to impose a South African ‘solution’. Well before 1914, East African Indians were mobilising against the threat of settler hegemony.126 African grievances were beginning to be voiced.127 Yet, in this racially segmented society, no group was strong enough to seize control from below. The colonial state was too weak to build its ‘nation’ from above.

In West and East Africa alike, colonial rule had created ‘shallow states’ without roots in local society. Freed from the burden of external defence by partition diplomacy, the British had no need to dig deep. Colonial government became an over-rule concerned mainly to keep the peace between its fractious subjects. The political future of so protean an empire was at best opaque. To many enlightened imperialists (as well as liberal opinion more generally), the greed and brutality of unofficial whites was far more alarming than the political aspirations of (as yet) unorganised blacks. Hence segregation, not integration, seemed the best solution for the medium term. The threat of racial conflict was not ignored by contemporary observers of the imperial system. But they tended to be fatalistic about settler domination and thought African advance would be slow.


Rather less attention was paid (outside official circles) to the other great fissure that ran through the British world-system. By 1914, the British system depended upon the loyalty and cooperation of a vast array of Muslim rulers and notables: in Zanzibar, Nigeria, Egypt, the Sudan, the Persian Gulf, Princely India and British India, and the Malay States. British relations with the Ottoman Empire and Persia (the largest independent Muslim states) were also exceptionally delicate: both were buffer states whose hostility or collapse would threaten the strategic corridor connecting Britain and India. British attitudes to Islam were contradictory, and there was no tradition of studying the contemporary Islamic world as there was for example in the Netherlands.128 Evangelicals and humanitarians, reared on tales of David Livingstone and the Arab slave trade, were deeply unsympathetic. Romantics were attracted by the ‘timeless’ pre-industrial East and the warrior ethos of desert society. But the most powerful influence on British policy was a wary respect for Islamic ‘fanaticism’: the supposed ability of Muslim rulers or preachers to arouse intense popular feeling against ‘infidel’ imperialists. The Indian Mutiny of 1857, Gordon's fate at Khartoum, and bloody disasters in Afghanistan had ingrained this deeply in the ‘official mind’.

But how dangerous was Islam to the political cohesion of the British system? The Islamic world stretched from Morocco to the Philippines. Islam, remarked the intellectual traveller Gertrude Bell, ‘is the electric current by which the transmission of sentiment is effected, and its potency is increased by the fact that there is little or no sense of territorial nationality to counterbalance it’.129 The government of India harped constantly on the danger of a ‘pan-Islamic’ movement transmitting the grievances of Middle East Muslims to India and beyond. With its chronic anxiety about a second Mutiny, its turbulent borderlands on the Northwest Frontier, and its diplomatic interests in the Persian Gulf, the Indian government's fears were understandable. Its real purpose was to restrain the ‘Gladstonian’ enthusiasm for liberating the Ottoman Sultan's Christian subjects to which opinion at home seemed all too prone. As the ‘great Muhammadan Power’, the Civilians insisted, Britain could not be seen to act against the interests of Islam. But few British observers thought pan-Islamism counted for much. ‘As a factor in British policy’, recalled Ronald Storrs of his time in pre-1914 Egypt, ‘the doctrine of the caliphate – of pan-Islamic theocracy – was mainly the creation of the India Office.’130 It ‘can never become a movement of importance’, judged Arnold Wilson, then a young consul in Southwest Persia.131 Lord Cromer was equally sceptical.132 In a survey of India published shortly before 1914, Bampfylde Fuller, a former Lieutenant-Governor of Bengal (a Muslim majority province), contrasted the political and educational backwardness of Muslims with the progress of Hindus – the real source of any challenge to the Raj.133

In fact, British opinion, whether sympathetic or not, tended to regard Islam as a culture in decline. It commanded enormous popular piety but had failed intellectually. It was the ‘speculative’ and ‘dogmatic’ nature of Islam, argued Fuller, that made Muslims resistant to modern knowledge. ‘Swathed in the bands of the Koran’, remarked Sir William Muir, the leading academic expert on Islam, ‘the Moslem faith, unlike the Christian, is powerless to adapt itself to varying time and place, keep pace with the march of humanity, direct and purify the social life or elevate mankind.’134Hence the British assumption that, so long as care was taken not to offend popular religiosity, or the vested interests of the ulama, the interpreters of Islamic law, a modus vivendi was perfectly possible. British authority should be decently veiled behind Muslim notables: this was the ruling principle of the Cromerian and Lugardian systems. If provocation was avoided, and prestige maintained, there was little danger of Muslim piety turning into nationalist passion.

Whatever its premises, this sanguine view of Anglo-Muslim relations looked plausible enough before 1914. In India, where most of Britain's Muslim subjects could be found, Muslim political attitudes were coloured by the fact of competition with Hindus and fear of Hindu predominance. In Northern Nigeria, the colonial pax had helped the emirs against their over-mighty subjects and permitted the extension of Islamic influence over long-resistant ‘pagan’ peoples.135 In Egypt, where the Khedive was usually at odds with the ulama of the al-Azhar – the greatest centre of learning in the Muslim world – an independent Egyptian state held little appeal for the doctors of law and theology. Islamic feeling ran athwart the ideas of nationalism and its religious guardians were suspicious of secular rule. Only in extreme conditions, where secular authority was unusually weak or social disruption exceptionally acute, did Islamic politics seem likely to thrive – or pose a real threat to British power.

Ireland and Empire

Ironically, in the last few years before 1914, the main threat to imperial unity lay closest to home – in Ireland. There was nothing new in this. Much the same had been true in the 1590s, the 1640s, the 1680s, the 1770s, 1780s and 1790s, the 1820s and the 1880s. But, after 1900, Home Rule ‘nationalism’ was supposed to have been killed by British ‘kindness’.136 The sale and redistribution of land had been expected to create a contented peasantry, immune to the violent rhetoric of the ‘land war’ that had raged since the 1870s, and shrewdly aware of the economic benefits brought by the Union of Britain and Ireland. Municipal and parliamentary politics, not agrarian terror, would be the political vehicle of this farmer class and its allies among the small-town tradesmen. In this prosaic new world, ‘romantic Ireland’ would be dead and gone, ‘with O’Leary in the grave’.

It failed to happen, at least not on the decisive scale that the architects of ‘kindness’ had hoped for. Part of the reason was the success of the Irish National Party, once led by Charles Stewart Parnell, in entrenching itself over much of Catholic Ireland outside Ulster and the City of Dublin. The Irish party was a formidable machine. When elected local government was extended to Ireland in 1898 in the form of county councils, the party gained a virtual monopoly of the powers and patronage it gave – as Unionist landowners bitterly complained. Its local bosses played a prominent role in the machinery for land sales, the process that was rearing a new breed of wealth in the countryside. The rapid growth of a provincial press gave the party's leaders and their newspaper allies an efficient means of mobilising opinion and exerting pressure. The one thing the party could not do was to force the British government to concede Home Rule. Until 1905, it faced a massive Conservative majority at Westminster. After 1906, as one Anglo-Irish landlord remarked, the scale of the Liberal landslide meant that the new government had no reason to risk introducing a third Home Rule bill.137 After all, Home Rule had twice before been the rock on which Liberal governments had been wrecked.

The Irish party leader, John Redmond, understood this. Redmond was from a Catholic landowning family. His strategy was subtle and perhaps – given the divisions among his followers – deliberately opaque. Raising money in America he spoke of an Irish nation as if complete independence was the plan. But his real aim was to win Ireland the equivalent of dominion autonomy, the same status as Canada, Australia, New Zealand and South Africa. He liked to compare himself to Louis Botha, who had reconciled Afrikanerdom to self-government under the British Crown. ‘Our stake in the Empire’, he told a Liberal journalist in 1908, ‘is too large for us to be detached from it…[T]he Irish people peopled the waste places of Greater Britain. Our roots are in the Imperial as well as the national.’138 ‘Once we receive home rule’, he told the Daily Express in 1910, ‘we shall demonstrate our imperial loyalty beyond question.’139 In The Framework of Home Rule (1911), Erskine Childers appealed to the Unionist opponents of Home Rule in similar terms. Ireland had nothing to gain by separation (i.e. complete independence), he claimed. ‘Ireland has taken her full share in winning and populating the Empire. The result is hers as much as Britain's.’ Indeed, giving Ireland Home Rule was part of the project of imperial unity, ‘the indispensable preliminary to the close union of all the English-speaking races’.140 Redmond hoped to reassure the enemies of Home Rule in both Britain and Ireland, to portray the Irish party as sober and responsible, and to appeal to a sense of All-Irish national identity, Northern and Protestant as well as Southern and Catholic.

In fact, Redmond's analogy between Ireland and South Africa was misplaced and his chances of success were thin. More than half his parliamentary party were ‘agrarians’ for whom the land struggle was still a political talisman. The party's popular movement, the United Irish League, was implicated in harrying landowners into forced sales and in ‘cattle-driving’.141 A vocal part of his following were ‘cultural’ nationalists, dismayed by the suddenness and intensity with which a Gaelic-speaking and non-literate society had been overwhelmed by anglicisation.142 Limited opportunities for the new Catholic middle class (the comparison with the Bengal bhadralok is suggestive) bred fierce impatience with ‘Dublin Castle’, the seat of British rule in Ireland. By 1913, the Gaelic Athletic Association, the seedbed of this revolutionary and culturalist nationalism, had more than 100,000 members.143 When Redmond declared (in October 1910) that he was in favour of a federal solution, making Ireland part of a ‘Federal Empire’, he was forced to retract and repudiate by the pressure of party opinion.144 But, if the room for manoeuvre on the nationalist side was limited, the scope for concession by their Unionist opponents seemed even less.

If Ireland had been a thousand miles away, Joseph Chamberlain is supposed to have remarked in 1893,145 it would long since have been granted self-government. Inescapable proximity and ineradicable difference were the Irish condition. To British critics of Home Rule, Ireland was too close to be entrusted with self-government: it was part of the Empire's ‘central power’, not an outlying province.146 If Irish autonomy was abused, argued Balfour, there would be little that London could do: yet the strategic stakes – if Ireland was disloyal – were much too high for the risk to be taken. The champions of tariff reform and imperial federation, like Milner, saw Home Rule as a retrograde step that would delay not encourage imperial unity. But the greatest obstacle to Redmond's programme (and the real difference from South Africa) lay in the extent to which Ireland's affairs were entangled in the party politics of the British mainland. One symptom of this was the fact that perhaps a quarter of Conservative MPs after 1906 were either Irish Unionists, Southern Irish gentry sitting for mainland constituencies, or married into Southern Unionist families.147 The second, and more serious, was the intensity of ‘Britannic’ sentiment in Northeast Ireland where religious and cultural antipathy to the Catholic South was rapidly mutating into an ‘Ulster’ identity with ‘Britishness’ at its core.148 But, unlike the British minority in South Africa, which was forced to settle with the Afrikaner majority, Ulster (like the rest of Ireland) was represented in the British Parliament. It could rely on powerful allies in mainland politics to obstruct the progress of Home Rule. And, if the worst came to the worst, it could threaten civil war in the heart of the Empire.

From these rigidities sprang the crisis of 1910–14. Its origins, and Redmond's opportunity, lay in the travails of the Liberal government. By 1909, its social programme (and electoral credibility) were at risk from blocking tactics in the House of Lords and the scale of its spending on the Navy. Its counter-stroke, the budget of 1909 and the consequential bill to limit the powers of the House of Lords, brought a constitutional crisis and a general election. The levelling up of Liberal and Unionist (or Conservative) strength in the House of Commons forced the Liberal cabinet into the arms of the Irish party while the passage of the Parliament Act (removing the veto of the House of Lords) erased their excuse for not honouring the long-standing commitment to Irish autonomy. A third Home Rule bill was drafted. In January 1913 it passed its last stage in the Commons with a majority of 110.149 While offering Redmond much less than he wanted, especially in Irish control over revenue and spending, it included Ulster in the Home Rule scheme. The result was an explosion. Predictably, the bill was rejected in the House of Lords. The Unionists demanded a general election, or a referendum, before the bill could be turned into law. In Ulster, preparations went ahead for armed resistance to a Home Rule government with the open encouragement of Unionist leaders like Milner. Elsewhere in Ireland, the resort to force began to be seen as inevitable: gun-running followed drilling. Compromise was elusive since all sides glimpsed the chance of triumph and feared the divisions that concession might bring. Even the belated acceptance by the Liberal government (at the instigation of Churchill and Lloyd George) of Ulster's exclusion from Home Rule brought further insoluble differences over the boundaries of the excluded area and the question of temporary or permanent exemption from the operation of the bill. At the moment when the shootings at Sarajevo and the prospect of a far more terrible crisis in Europe suspended domestic hostilities over Ireland, a descent into civil war in Ireland and (at best) constitutional impasse in Britain seemed all too likely.

The astonishing case of Irish Home Rule mocks the argument that the British world-system owed its strength and cohesion to the shrewd pragmatism and liberal instincts of the governing elite in London. Confronted by the twofold challenge of Irish nationalism and Ulster Unionism, that elite was at sixes and sevens. Both Liberals and Conservatives hoped to exploit Home Rule to win the party battle in mainland Britain. Neither dared alienate the Irish factions with whom they were allied. The Irish crisis throws into relief the chronic weakness to which the imperial centre was often subject. For London was only rarely capable of decisive intervention in local politics. Its usual role was to adjust the balance between the local parties: to regulate, encourage or obstruct. Its freedom of action was often constrained by the numerous and vocal colonial lobbies active in Britain though these also were usually too weak to impose their will. Where (as in the Irish case) the local parties were finely balanced, could exert almost equal pull inside British politics and came to symbolise rival notions of imperial power, the strain became almost unbearable.

In the last resort, then, the cohesion of the British system was less a matter of British policy than of the complex workings of imperial politics. The theoretical paramountcy of the Imperial government was exercised under demanding conditions. It was hemmed in by the free trade convictions of the British working class, unmoved by the argument for tariff reform.150 It was checked by the strength of the two old-established ‘garrisons’ in Ireland and India and of their allies and supporters in British opinion. It was wary of the militant appeal of Britannic nationalism that Milner had invoked so successfully in 1899. It dared not coerce the self-governing colonies. A determined proconsul with the press in his pocket, like Lord Lugard in Nigeria, was hard to restrain. It was the incoherence and improvisation to which all this gave rise that fuelled the ambition of the self-styled imperialists in Edwardian politics. To free ‘imperial’ questions from the messy entanglement in domestic politics, and to discipline the lobbies and factions whose influence loomed large, they wanted to create an Empire-wide public opinion and an Empire-wide parliament. Before 1914, they made little headway. But with the crash of the old order they thought they saw their chance.

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