Asperities

What Happened in the Previous Future?

A little late in the day, the British are beginning to ask the question: What kind of grand strategy will the UK adopt and what kind of alliances will it make when the country leaves the European Union next year? That question was never placed clearly on the national agenda during the Brexit battle because most of those professionally interested in such topics didn’t want alternatives to a European future to be discussed at all. Now that we’re on the verge of leaving and unlikely to return, however, it can’t be avoided.

As it happens, Andrew Roberts, the distinguished historian and biographer of (most recently) Churchill, stepped forward in the Wall Street Journal last month to propose that Britain should build its future around an alliance with Canada, Australia and New Zealand rooted in free trade, liberal migration rules, and security co-operation under the acronym of CANZUK.

This column appeared in September’s Quadrant.
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For most people it’s a new idea. So it’s interesting that it strikes a chord in all the CANZUK countries, where polls have surprisingly shown majorities favoring more or less mutually open immigration. It has advocates in the politics of all three countries, mainly on the Center Right, such as Tony Abbott, and in journals of opinion such as Quadrant where James C. Bennett has eloquently argued its case. And in Andrew Roberts it has the author of the third volume of the History of the English Speaking Peoples that Churchill began making the case for the next stage of their evolution.

Naturally I’m fascinated by these developments, not only because I’m a long-standing advocate of the related concept of the Anglosphere but in particular because in 2015 I delivered the Kenneth Minogue Memorial Lecture at Claudio Veliz’s Melbourne Conversazione in which I embarked on a counter-factual history of Britain after the defeat of the 1975 referendum that was supposed to seal British EU membership. In that counter-factual history Andrew, an old friend, was the Regius Professor of History at Oxford, the Ronald Reagan Professor of Global Strategy at Stanford University, and the author of the standard history, Britain and the Rise of the Anglosphere. Here’s an extract from it:

To everyone’s surprise, however, the referendum was lost by 58 to 42 per cent—a margin too large to ignore or override. Harold Wilson, ever the opportunist, reshuffled his Cabinet to reflect it. Wilson had never been keen on the EEC. He had earlier tried to negotiate with President Lyndon Johnson a North Atlantic Free Trade Area, incorporating Britain, Canada and the US, as an alternative to EU membership. When that got nowhere, he lost interest and swam with the European current. So he had no particular answer to the situation created by the referendum. His successor, James Callaghan, was equally agnostic. Besides, both prime ministers had more urgent challenges to manage, from the installation of Soviet missiles in Eastern Europe to the collapse of an incomes policy then considered essential.

So they trod water on the issue. And Britain wondered what to do next. Supporters of Europe, led by Roy Jenkins and the former Tory leader Edward Heath, had no doubts. They had to reverse the electorate’s verdict as soon as possible. Moreover, the series of economic crises that Britain suffered under the Wilson and Callaghan regimes—the IMF being called in to audit the books and enforce public spending cuts in 1976—gave them seemingly strong arguments for re-entry. But they could not plausibly call for a second referendum so soon after the crushing defeat of 1975.

And as the 1970s wore on, political debate shifted onto the different ground of how to deal with Britain’s persistent economic problems more directly—either by a more left-wing socialism under a Labour leader such as Michael Foot or Tony Benn or by the blend of monetarism and deregulation advocated by the new Tory leader, Margaret Thatcher. Though not the Eurosceptic she later became, Mrs Thatcher was convinced that all political questions should be subordinated to the priority of getting the British economy right. When she won the 1979 election, she embarked upon the policies known as “monetarism” which were initially unpopular with the voters and divisive within her own party.

The pro-Europeans under Heath, known as the “wets”, made re-entry into Europe part of their economic alternative package. The Tory Left made its push at the 1981 Tory conference and it sustained an overwhelming defeat. That defeat would not necessarily have ended the dispute, however, if two events had not also moved in the Prime Minister’s favour.

The first one was her victory in the Falklands War which made her a respected national leader, produced a burst of old-fashioned British patriotism that pushed Europeanism into the wings of British politics, and finally persuaded the Prime Minister herself that Britain had more (and more loyal) friends in the Commonwealth than in continental Europe. The second event was that, by 1983, it was clear that her economic policies were starting to succeed. Indeed, Thatcher’s Britain and Reagan’s America were increasingly seen as models of a new and deregulated capitalism that was creating a new sort of information economy and changing world economic history. There were other models of it too—in David Lange’s New Zealand, for instance—but none of them were in continental Europe.

As the 1980s and the 1990s wore on, the earlier arguments for a British commitment to Europe were evaporating one by one. The country’s economic problems were being solved internally; its European competitors were performing less well and demonstrating less innovation; and Britain’s international reputation was high and rising. When some economists and Labour politicians suggested that Britain should join Europe’s fledgling Exchange Realignment Mechanism as a means of restraining inflation, Chancellor Nigel Lawson poured scorn on the proposals. That would, he said, overheat the economy and lead either to inflation or to deflation depending on the vagaries of German monetary policy. His policy was monetarism in one country and his motto was “Steady as she goes”. These prudent policies led in time to Mrs Thatcher’s fourth and final electoral victory in 1991, after which she left Downing Street to head the IMF. Europeanism was by then a dead cause in British politics. By then also a firm friendship had been established between Mrs Thatcher and President Reagan and the Cold War had been won. Those events had important consequences for Britain and her Commonwealth partners. Reagan’s attachment to Thatcher compelled the US State Department to abandon its policy of pushing Britain into a European union. When George Shultz argued for a policy of helping Europe to revive its movement towards integration in the mid-1980s, Reagan explicitly insisted that no pressure be put on Britain to reconsider joining what was then the European Community. America’s traditional policy was abandoned and never revived because of another and more important development: namely, the post-Cold War rise of globalisation.

The 1975 referendum had already ensured that Britain’s trade was never redirected from the Australian, New Zealand, Canadian and other non-European markets to the EEC. Britain also retained the power to negotiate independent trade agreements with others. One result was that Australian trade with the UK (though it inevitably shrank as a percentage of total trade in both countries as Australia developed its trade links with Asia) remained very high. Britain today is Australia’s third trading partner after China and the US—not its sixth as experts estimate would be the case if Britain’s trade had been distorted by EU membership. The same is true of UK trade and investment relations with New Zealand, Canada and such New Commonwealth countries as India and Singapore. Encouraged by the success of these traditional links, Britain expanded its non-European trade in general and was better placed than any other European country to benefit from the rise of Asia, notably China, when it occurred under globalisation. At the same time rising UK trade with Canada meant that when Prime Minister Mulroney sought to reduce Canadian protectionism in the 1990s, he did so by reviving Harold Wilson’s idea of a North Atlantic Free Trade Area between the UK, the US and Canada. This took time to negotiate—powerful US interests preferred a continentalist version of NAFTA including Mexico but excluding the UK—but it has since become the model for other intra-Anglosphere trade agreements such as that negotiated by Prime Minister John Howard between Australia, the US and the UK. (Negotiations with Mexico continue.) Increased trade between English-speaking countries, together with the rising competitiveness of their economies following the economic reforms of Reagan, Thatcher, Roger Douglas in New Zealand, Paul Martin in Canada, and Bob Hawke, Paul Keating and John Howard in Australia, meant that by the turn of the century the Anglosphere was seen as pulling away from the sclerotic economies of mainland Europe.

A third factor was communications. In the prehistoric age of information, the 1970s, the Economist had asked: Who do the British telephone on Christmas Day? They discovered that almost all the calls, then expensive, went to Australia, New Zealand, Canada, South Africa, the US and other post-imperial countries, and almost none to mainland Europe. The internet took this cultural fact and multiplied its importance many times over. In personal, trade, diplomatic and countless other ways, geography suddenly took second place to culture. It was easier for people to deal with others thousands of miles away who spoke the same language and had the same understandings of rules than with those nearby who were separated by language, legal culture, political loyalty, and so on.

Two results flowed from this among Anglosphere nations already brought together by trade and diplomatic links. The first was that the Anglosphere countries began to harmonise their regulations and standards for both products and services. That further encouraged trade between them and formed a non-tariff barrier to outsiders. It also helped migration to accelerate more rapidly between English-speaking countries than between the Anglosphere and other countries. There are now Anglophone diasporas in all these countries as substantial as they are invisible. More than 500,000 Australians live in London, for instance. Law today is limping along behind these migration flows to restore a modest and partial version of the free mutual immigration, especially for young people, that characterised the old British Empire.

All this is made more possible by, but also intensifies, a growing sense of Anglosphere identity. This has finally healed the sense of betrayal felt by many Australians because of the deceptive tactics of the Macmillan and Heath governments over their breaking of the former trade relationships. That sense of betrayal had been mollified but not wholly dispelled by the 1975 referendum. It completely evaporated by the turn of the century as an Anglosphere identity (commonly called an “Oceanic” one) came into vogue among the well-travelled young. Thus, when a Labor backbencher proposed in the mid-nineties that Australia should re-orient itself towards an Asian future and identity, he was slapped down by Paul Keating who, partly quoting A.E. Housman, said, “A moment’s thought would have helped my honourable friend not to confuse nationality with soil or culture with proximity. But thought is a painful process and a moment is a long time.”

Until very recently, this intensification of ties has been confined largely to the private sector and to economic and personal ties. But recent moves by France and Germany towards a full-scale European Federation as a solution to the long-running euro crisis have encouraged more visionary thinking about Anglosphere security co-operation. In a recent joint monograph for the Brookings Institution, two American strategists, James C. Bennett, author of The Anglosphere Challenge, and Walter Russell Mead, author of Guns, God, and Gold: Britain, America, and the Making of the Modern World, argue that the CANZUK nations are now likely to move towards greater and more self-conscious economic and security integration in response. The US will similarly propose a North Atlantic and Australian Free Trade Area linking America with the CANZUK nations. “In time,” they write, “a US-Commonweath security structure that virtually eliminates the need for either side to utilise third-party bases worldwide is likely to emerge. Now that India is finally shedding its Nehru–Menon generation of neutralist diplomats, that country too is likely to add itself to the new security structure even as the reformed Indian economy opens free trade negotiations with the rest of the Anglosphere. If such developments occur—and they are a logical response to Europe’s consolidation under German leadership—the mid- twenty-first century will have the US-CANZUK-Indian triumvirate as its leading security core. These may look like revolutionary changes today, but under their post-imperial gloss they more or less replicate the world situation in 1900 right down to the emerging challenge from Germany.”

Since prime ministers Stephen Harper in Canada and Tony Abbott in Australia have expressed sympathy for deepening the Anglosphere, the ideas of Bennett and Mead are likely to get high-level attention in Washington and London too. David Cameron in particular is likely to welcome them. He is on record as saying that he cannot imagine Britain reconsidering its 1975 decision to choose the Commonwealth and the open seas over a narrowly European future. This rise of the Anglosphere is a far cry from the defeatist decisions of the Macmillan and Heath governments to hand over responsibility for solving Britain’s problems to a wilderness of committees in Brussels. Recent polls in Britain show levels of support for joining the European Union in the low teens.

THUS ends my quotation from Professor Roberts’s important but, alas, non-existent history. So let me impose a reality check on myself. You will have noticed that nothing in my alternative history happened to return Britain to the European Community or to block the rise of the Anglosphere or to obstruct the direction of my argument in any significant way. In reality even the best laid plans go wrong. Counter-factual history is like a battle plan: it works perfectly until the battle begins. Whatever might have happened after a British rejection of EEC membership, it certainly would not have played out with the comforting confirmation of all my prejudices as outlined above.

That said, the larger and long-term trends that I identify as keeping Britain out of Europe and making the country an important member of a growing Anglosphere (I believe) all reflect actual reality: the success of Thatcherism in reviving Britain and the British economy; the rise of globalisation as a factor both in encouraging world trade and in rewarding Britain’s global trading outlook; the comparative performance of Anglosphere economies versus Rhineland capitalism; the growing importance of the Commonwealth as a trading bloc owing to the economic rise of such members as India; and the impact of the internet in strengthening cultural links across large distances (conquering the tyranny of distance, as Professor Blainey might say). All these are events in the real world, and they serve to explain why the Anglosphere has become a topic of interest, study, and political enthusiasm even in our very different world in which the British have just escaped from the EU and are wondering “What next?” So my answer: Try CANZUK. We know it works in theory.

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