Economics and Foreign Policy, 1942-1957
This book explains how and why, Australian governments shifted from their historical relationship with Britain to the beginning of a primary reliance on the United States between 1942 and 1957. It shows that, while the Curtin and Chifley ALP governments sought to maintain and strengthen Australia’s links with Britain, the Menzies administration took decisive steps towards this realignment.
There is broad acceptance that the end of British Australia only occurred in the 1960s and that the initiative for change came from Britain rather than Australia. This book rejects this consensus, which fundamentally rests on the idea of Australia remaining part of a British World until the UK attempts to join the European Community in the 1960s. Instead, it demonstrates that critical steps ending British Australia occurred in the 1950s and were initiated by Australia. These Australian actions were especially pronounced in the economic sphere, which has been largely overlooked in the current consensus. Australia’s understanding of its national self-interest outweighed its sense of Britishness.
1 The Dependent Dominion: Australia in 1941
The Dependent Dominion: Australia in 1941
“Australia is a British land of one race and one tongue.”1
This chapter considers Australia’s ties to Britain before the Pacific War started in December 1941. It shows that, although real and numerous, when tested, many Anglo-Australian connections were to prove weak. Britain’s inability to aid Australia against Japan triggered the estrangement in 1942, but the fault-lines existed, albeit more faintly, before the outbreak of hostilities.
While Australia’s affinities with Britain were strong, the relationship had rested as much on Australian military and economic dependence on Britain as its innate sense of Britishness. American isolationism had amplified this reliance. Australian Prime Ministers regularly sought to establish security relationships with America in the form of a Pacific Pact, but all had been rebuffed. Indeed, as American diplomats reported, the U.S.-Australian relationship had deteriorated since their soldiers had fought together in 1918.
The 1930s economic climate was a critical cause of this worsening relationship. Countries retreated to trade protectionism: Britain and her Dominions retaliated against the American Smoot-Hawley tariff by establishing a system of Imperial Preference at Ottawa in 1932. These steps created a bilateral trading system that significantly increased Anglo-Australian economic dependency. Before Ottawa, America’s share of Australia’s trade had been expanding at rates that, if continued, would have seen it replace Britain as Australia’s largest trading partner within twenty years. Ottawa reversed this trend, which only returned in the...
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