How a Great Power Falls Apart
Decline Is Invisible From the Inside
Looking back at the foreign policies of Britain and the United States since 1800 one sees two strands woven closely together-the strands of idealism and realism. In both countries, governments, parliaments and peoples have been happiest when these two elements have been brought together in apparent harmony. Take for example two quotations from nineteenth-century England:
We have no eternal allies and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow. . . . With every British Minister the interests of England ought to be the shibboleth of his policy.
And then again:
I hold that the real policy of England is to be the champion of justice and right: pursuing that course with moderation and prudence, not becoming the Quixote of the world, but giving her moral sanction and support wherever she thinks justice is, and whenever she thinks that wrong has been done.
The point of interest in these quotations is that they were spoken by the same man in the same speech without any sense of contradiction. They were the words of Palmerston in the House of Commons in 1848; but I am sure that both quotations could be matched by almost any Foreign Secretary or Secretary of State between that time and now.
Over much of this period it has in fact been possible for idealism and realism to run fairly well together. For example, in Palmerston's time the interests of England, as well as its liberal conscience, dictated that England should support those liberal and national movements which created the nation-states of Europe as we see them today. At the turn of the century, for a comparatively brief period, idealistic belief in Britain's mission overseas combined with a keen sense of political and commercial opportunity to create a positive imperial policy. After the Second World War a different brand of idealism combined with a realistic sense of the change in Britain's power to produce the peaceful transfer from a colonial empire to the independent association of the Commonwealth.
But at other times there has been an obvious and inevitable tension between the claims of idealism and of realism. When this tension has occurred it has been the instinct of the British to plump for realism, to a degree which until recently has tended to shock observers on the American side of the Atlantic. It is the first and not the second of the quotations set out above which has served as a text down the years for the instruction of new entrants into the British Foreign Service. If one looks in this century at the occasional clashes between British and American policy, between Wilson and Lloyd George at the Peace Conference of 1919, between Churchill and Roosevelt in the closing years of the Second World War, between Dulles and Anthony Eden over Indochina in 1954, one sees at each point a British preference for realism resisted by American statesmen, who preferred to look for some master principle which they could put forward as a universal ideal. To the British observer one of the remarkable shifts of American policy during the last decade has been precisely a movement toward a more realistic analysis of issues of foreign policy and a partial abandonment of the search for a master principle. I do not myself find this disturbing. For the interests of Britain and the United States in the present stage of their historical development clearly require stability and prosperity not only at home, but throughout the world. This means that we are once again in a period where the interests of our two countries coincide with any reasonable definition of the common good.
But it is clearly not enough to define these interests in such general terms. The realist has to look more closely into ways and means. It is at this point that there has been in recent years a certain question mark over British foreign policy. We have shown some reluctance to define our course, and to hold to that course steadily in the day-to-day conduct of foreign affairs. We have tended to become preoccupied with day-to-day difficulties, and so to miss the tide of events. We have suffered from a degree of diffidence and uncertainty which has obscured our vision of reality.
An obvious example has been the British attitude toward the movement for unity in Europe. Ever since Winston Churchill made his great postwar speeches at Zurich and The Hague, farsighted Englishmen have seen that the movement for European unity holds enormous benefits for Britain, It promises an end to those conflicts between European powers from which the European countries, including Britain, have been the chief sufferers. It promises a voice for Europe in world affairs which individual European countries cannot hope to achieve by themselves. It promises in the long run a single market in Europe to provide a foundation from which European industry and European science can grow to match the achievements of the United States and the Soviet Union.
This elementary analysis is now overwhelmingly accepted as valid, in Britain as elsewhere in Western Europe. Yet the sad fact is that each British attempt to associate Britain with the movement for European unity has failed, and that each attempt has taken place in less favorable circumstances than its predecessor. When I made my first speech in the House of Commons in 1950 I urged that Britain should join the European Coal and Steel Community. At that time, and for a few years afterwards, Britain had the opportunity to join the European communities at their birth, and so to have a decisive say in European institutions and the way in which they were run. But by the time Mr. Macmillan's government decided in 1961 to apply for membership in the European Economic Community, our task was already more difficult. During the negotiations which I conducted in 1961 and 1962 we had to reckon with a Community whose institutions and policies were already partly formed without taking account of the needs and interests of Britain. During these negotiations we came a long way to finding solutions to the practical problems resulting from that situation; but we were frustrated in January 1963 by the abrupt decision of the President of France.
By the time that the Labor government was converted to the European idea and made its own attempt to join the Community in 1967, the policies of the Community had taken even more definite shape. In particular the Community had, since the earlier negotiations, adopted in detail a Common Agricultural Policy which Britain would clearly have to accept as a condition of membership. The second attempt failed without negotiations having started at all because the French President refused to alter his well-known stand. It is too early to be sure how far the basic French objection to British membership in the EEC has now changed. But it is certain that Britain is now less able than she was in 1961-62, or even in 1967, to assume without special arrangements the obligations of full membership. The increase in Britain's international indebtedness and the underlying weakness of her balance of payments make more formidable the heavy short-term burden which a Common Market and the Common Agricultural Policy as it now stands would inevitably impose.
The setbacks which we have suffered in Europe have also raised in some minds a doubt as to whether we are on the right path to European unity. It has been suggested that we ought to break away from the wearisome attempt to enter the Communities and to find a short cut by means of some dramatic political initiative aimed at finding a new formula. Recipes for this formula have varied, but I believe that they all miss the basic fact about the way in which European unity can be constructed.
In my judgment the unity of Europe will in the end be achieved by European governments forming the habit of working together. Public and parliamentary opinion works upon governments, but in the end it is governments, elected ministers and their officials, who take the decisions. Confidence between governments is the only lasting cement for the unity of Europe. The underlying analysis of M. Monnet and the other founding fathers of the Communities was that the governments of the Six would begin by working together for the abolition of tariffs and the creation of a common market. Under the stimulus of the European Commission they would then move on, as confidence in the joint taking of decisions increased, to create an economic union. They would gradually extend the range of their coöperation until it passed beyond purely economic matters into foreign policy and defense. At the same time, as confidence grew, governments would be more ready to pool their powers in strictly European institutions.
I am sure that this still remains the only realistic approach to European unity, and that short cuts can only lead to a further round of disappointments which neither Britain nor Europe can afford. Of course the process has been slower than the signatories of the Treaty of Rome had hoped. There have been delays and setbacks; in an enterprise of this magnitude these were to be expected. But the Communities and their institutions have survived and proved their worth. It is inconceivable to me that the unity of Europe could now be established on any other basis.
In the next year or two there may be another opportunity for Britain to join in this process. If this effort is to succeed it must be most carefully prepared, for public opinion in Britain could not tolerate a third failure. There has understandably been some falling-off of British enthusiasm in recent years. The cause of European unity has suffered from far too high a ratio of words to action. It would be a serious miscalculation to suppose that enthusiasm could be rekindled by a new round of conferences or declarations of intent; this would merely aggravate the sense of frustration. But once there was a prospect of practical and acceptable answers being found to the real problems which now bar the way, then I believe that public interest would quickly revive and the strength of the underlying argument in favor of European unity would prevail.
Britain's application to join the EEC remains on the table with those of the other applicant countries. The next step so far as Britain is concerned must be for the Six to signify that they are all ready to begin negotiations on our application. Then before negotiations between Britain and the Six as a whole can begin there must be thorough bilateral discussions between Britain and each of the Six, as well as with the European Commission if they so wish. These discussions are needed to ensure, before negotiations start, that enough common ground exists for their success. They will naturally cover the whole field of the Treaty of Rome. Many of the results which we achieved in the negotiations of 1961-62 are still valid and will provide a foundation for eventual British membership. Other difficulties were not resolved in the earlier negotiations and still exist today, though in the case of New Zealand, for example, it was accepted in principle by the Community that a solution was essential for a successful negotiation. It is not realistic to suppose that these difficulties can be brushed aside as of no importance. But given the political will to succeed, these problems are not of a magnitude to frustrate a final agreement.
But preparation must in my judgment go well beyond the scope of the Treaty of Rome. We shall not succeed unless we can work out with our future partners guidelines for the other problems which confront Europe today. We shall not achieve final solutions at this preliminary stage; as I have already said, I believe that these final solutions will grow out of the confidence formed by the habit of working together. But the British Government needs to show from the beginning that it favors a common approach to these further problems, and that it has ideas on what this approach should be. The further problems fall broadly under three heads: monetary coöperation, political coöperation and defense.
The monetary predicament of the Western world looms larger today than it did in 1961-62 or even in 1967. It is, of course, a problem with many facets. In 1967 a principal cause for concern was the weakness of sterling and the instability of the sterling balances. The former led to devaluation; but devaluation, in its turn, gave a shock to the sterling system which aggravated the problem of the sterling balances. In effect, a European solution had then to be found for this problem. The Basle agreements contained arrangements which could well have been a part of such a European solution.
At the same time, a general uncertainty persists-a result of the continued increase in Britain's indebtedness, the continued U.S. deficit, the weakness and sudden devaluation of the franc and the accumulated surpluses in Germany-which impedes the economic policy of each of these countries and many others besides. Obviously, there could be no purely European solution to these problems, but equally it has become clear that Europe cannot proceed much further toward economic union without a more fundamental consensus on monetary matters than is contained in the Treaty of Rome or the practice of the EEC to date.
Two related issues in particular dominate the present international monetary scene. The first has worldwide ramifications; the second, in practice, is more directly the concern of the European Communities.
On the wider issue, the Bretton Woods system (not as originally envisaged, but as it has developed in practice) has for some time been showing acute signs of strain. On the one hand, there is a continuing need for increased international liquidity to satisfy the reserve requirements of various countries without precipitating the international transmission of deflation and a return to the beggar-my-neighbor policies of the interwar years. On the other hand, this need has been met by persistent imbalance-on the part of the Americans-creating a flow of dollars into Europe. This has eased the liquidity problem at the expense of growing doubts about the value of the dollar. While these doubts have not been resolved, the pressures to which they could have given rise have largely been neutralized by German reluctance to convert dollars into gold.
The creation of liquidity in this way has had certain unplanned and unforeseen consequences. First, the gold-exchange system envisaged at Bretton Woods has effectively been put into suspense and replaced by a dollar system. Secondly, the surplus of dollar balances, instead of accumulating in official hands, has contributed to the development of the Eurodollar market to supply the need for a European capital market.
These developments have both good and bad features. On the positive side, the supply of liquidity necessary for the continued growth of world trade has been maintained; the Eurodollar market now performs an invaluable role as a flexible international money market, and America has been able to continue exporting scientific know-how and managerial skill to Europe.
On the negative side, the system depends upon a continued U.S. deficit which in turn means a flow of real resources to the richest country in the world; the Eurodollar market is also a potential source of instability, lacking as it does any overt control or "lender of the last resort;" and under the dollar system the world is forced to march in step with the United States, which effectively determines the ebb and flow of activity throughout the rest of the world.
Europe must decide whether it really does want America to eliminate its deficit or whether to accept a world dollar system. Can the European countries agree on a viable alternative to American domination of the international monetary system?
The related, but narrower, European problem is how individual members of the Common Market can adjust imbalances between themselves. It can be argued that once the Community is fully developed, scope for imbalance will be strictly limited. The ties between members of the Community will then be so close that the development of inflationary or deflationary pressures in one country will immediately be transmitted to its partners before any serious balance-of-payments difficulties arise.
But this does not alter the fact that a real disequilibrium at present exists between Germany on the one hand and France on the other. The problem is that there is a conflict between measures to eliminate a disequilibrium- such as exchange-rate changes-and other aspects of the Community, in particular the common agricultural policy. Under this policy, agricultural prices were set in terms of units of gold which reflect the present value of the dollar. Any member which changes its exchange rate would have to accept, under the rules, related changes in food prices and farm subsidies, which may be undesirable. Members of the Community have therefore to come to terms with this problem, either by taking a giant stride toward integration of monetary and fiscal policies or by finding some way of permitting adjustment between members which does not undermine the existing framework of the Community. It may well be that the special but temporary adjustments to common agricultural policy made by the EEC Council of Ministers in order to assist France after the devaluation of the franc will pave the way for more far-reaching reforms.
As regards political coöperation, the first step must be an effective system of harmonizing foreign policy within the Council of Ministers of the EEC. It is a paradox that while the EEC itself has failed to establish any such pattern of consultation, the Council of the Western European Union (the Six plus Britain) had quietly and undramatically achieved a form where the seven governments regularly exchanged views on foreign policy matters. That is one reason why I was opposed to the attempt to make WEU part of the means of outflanking the French veto on British entry into the EEC. The only practical result has been to cause France to exclude herself from meetings of WEU which she had previously attended. It is ludicrous that countries of Western Europe are now without a means of concerting their policies on matters of such vital concern to Europe as, say, the Arab- Israeli conflict in the Middle East.
In the field of defense there has already in recent years been a movement toward creating a European voice within NATO. This tendency will inevitably increase if it becomes apparent that, despite the lesson of Czechoslovakia, the United States is determined to reduce the size of the forces which up to now she has been ready to station in Europe.
The chief difficulty in the way of this coming together of European countries on defense has been that France has so far been excluded as a result of President de Gaulle's withdrawal from effective coöperation with NATO. The immediate aim of European countries should be to devise a way to end this unnatural separation. It is now three years since I proposed the idea of a joint Anglo-French Nuclear Deterrent which could be held in trust for Europe. I have been glad to notice that similar suggestions have now been made by Herr Strauss and hinted at by the new French Government. My conception has been that the non-nuclear countries of Europe could join with Britain and France in a Consultative Committee which would have exactly the same relationship to the joint Anglo-French deterrent as the so- called McNamara Committee has to the U.S. deterrent. There would thus be no question of infringing upon the Nonproliferation Treaty, or giving non- nuclear countries an unacceptable measure of control, commonly described as a finger on the trigger. A scheme of this kind would not in any sense be anti-American; indeed, because of the provisions of the various British agreements with the United States in this field, it could not be implemented without American support. I believe that this support would be compatible with the general principles of American policy toward Europe in recent years. The United States under different administrations has shown remarkable farsightedness in being willing to make concessions of its immediate interests in order to further the creation of a European unity.
In Britain in recent years, our role outside Europe has been the subject of lively discussion which has run somewhat parallel to the discussion in the United States, although the circumstances and issues are widely different. There is little dispute in Britain about the part which Britain should play in the various international enterprises in which she is a partner. It is widely accepted in Britain that the peacekeeping and peacemaking functions of the United Nations should be supported and strengthened, and that this can be done without acknowledging that every resolution passed by the General Assembly, or its Committees, enjoys some sacred infallibility. The United Nations has shown that, in the right place and under the right conditions, it can provide a useful addition to the traditional techniques of diplomacy which no country genuinely interested in international stability can afford to neglect.
Similar considerations apply to the Commonwealth, an organization which may be on the verge of a new usefulness as the prejudices of the past evaporate. During its early years the Commonwealth suffered from the suspicion of some of its members that Britain was using the organization to perpetuate under a new name some of the privileges of empire. Latterly it has suffered from the suspicion in Britain that other Commonwealth countries were interested in the association primarily as a means of extracting help from Britain, and as an opportunity of reading Britain lectures on British policy of a kind which would be bitterly resented if addressed to any other country. This suspicion gained ground as a result of the preoccupation of the Commonwealth with the Rhodesian question. But after the last Conference of Commonwealth Prime Ministers in London, which achieved a greater success than was recognized by some at the time, it seems at least possible that suspicions are fading. New possibilities of coöperation within the Commonwealth are opening up, based primarily on the dense network of connections between Commonwealth countries in almost every field of human activity, a network which has largely survived the vagaries of politics.
Equally there is little argument in Britain about British membership in the alliances to which she now belongs, and in particular of the importance of the connection with the United States. Here again much of the rhetoric of the past has vanished, leaving behind a realization that a special relationship does not mean special privileges. It means a recognition that the two countries still hold interests in common across the world to an extent which goes well beyond the normal dealings between friendly states and peoples. This relationship will continue to the extent, and only to the extent, that each country contributes effectively to the furthering of those common interests.
Much of the argument in Britain has concentrated not on Britain's part in these common enterprises but on the individual role of Britain in helping to keep the peace in certain well-defined areas.
In our recent history there have always been those in Britain who have opposed spending what is necessary on defense to safeguard the security of the country and protect its interests overseas. Now this group has been joined by those who divide the world up into isolated compartments and argue that the British defense effort must henceforward be confined to our own islands and the continent of Europe,
The arguments used in defense of this thesis do not in my view stand up to serious examination. We would all prefer to see a world order in which stability was achieved by some accepted system of international enforcement. But failing such a system, there is no political law of harmony in operation which ensures that the sovereign states in any given area of the world will settle down automatically into a state of peaceful coexistence. There will be circumstances in the future, as in the past, when independent nations which believe themselves to be threatened will appeal to their friends elsewhere in the world for help. It would be as foolish to claim that such appeals should always be refused as to pretend that they should always be accepted.
There have been instances since World War II of British military power failing to achieve the purpose for which it was deployed. But there have also been instances where British power has been strikingly successful in averting a threat not only to British interests but to the stability of the area involved. The arrival of British forces in Kuwait in 1961 ruled out the possibility of an Iraqi take-over. British military action in East Africa in 1964 prevented the overthrow of three Commonwealth East African governments by armed mutiny. The major British military effort in Eastern Malaysia from 1964 until the change of régime in Indonesia not only maintained the integrity of Malaysia but also averted a serious threat to the stability of Southeast Asia. The lesson to be drawn from both the failures and successes during this period is that a British military presence can be effective if the political context is right. This should, I am sure, be the test for our future policy. It happens that in the Gulf and in Singapore/Malaysia the political context has been right for the successful deployment of limited British forces. These forces have, politically speaking, been part of the landscape, and their presence has been welcomed by our friends in the area, British forces have not physically protected British investments and installations, but they have helped to ensure the stability without which such British interests cannot flourish.
This analysis, rather than any nostalgia for imperial grandeur, has led the British Conservative Party to the firm conclusion that if a Conservative government is returned to power it will consult with our friends to see, in the conditions then obtaining, what kind of British effort is required. In Southeast Asia we have put forward a scheme for a joint five-power Commonwealth force including contingents from Britain, Australia, New Zealand, Singapore and Malaysia. We have been greatly encouraged by the fact that since I first advanced this proposal in Canberra last August, the governments of Australia and New Zealand have made known in cogent statements of policy the decision of these two countries to keep troops in Singapore and Malaysia after the end of 1971. It is noticeable that informed opinion in Britain is increasingly coming round to accept our analysis. It is more and more recognized that the economies promised as a result of the policy of withdrawal are false in the sense that they expose British interests and the future of our friends to unacceptable risk.
It is sometimes said that foreign affairs are of no real interest to a democratic electorate, and that politicians should concern themselves with bread-and-butter issues. In my experience this is a considerable oversimplification. Certainly, so far as Britain is concerned, I find that even those who have no detailed knowledge of the particular issues of foreign affairs are nevertheless anxious that their country should not retreat into the shadows. They are quick to resent any suggestion that Britain should contract out of any interest in what happens beyond her shores or the continent of Europe.
The pattern of future British policy which I have outlined is, I believe, based on a realistic assessment of British interests. But it also offers scope for idealism-in building the unity of Europe, in helping forward the prosperity and security of the Commonwealth and in increasing Britain's share in all those international enterprises, small and great, which are gradually edging us toward a better world.