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Rethinking the Australian Dilemma

Economics and Foreign Policy, 1942-1957


Bill Apter

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. 

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9 Aligning with America, 1952–57



Aligning with America, 1952–57

“Defence policy and economic policy must run together.”1


In April 1957, Menzies announced the alignment of Australia’s defence procurement with America. He explained that “defence policy and economic policy must run together” and, despite Australia’s cultural Britishness, only America could provide the “massive power” to protect Australia:

It seems clear that in the event of war we will be fighting side by side with the United States … Common sense dictates that under these circumstances, we should pay considerable attention to the logistic aspect of war, and standardize so far as we can with the Americans. Though this is a wholeheartedly British nation this is not a heresy. It merely recognizes the facts of war.2

In his speech, Menzies outlined a number of the fundamental themes of the government’s foreign policy. First, he emphasised the need for defence and economic policy to be aligned. His second theme was the inability of Australia to defend itself and hence a reliance upon its allies. Third, he reflected the increasing divergence in strength between the “massive power … and … assurances of support” of the Americans and the “smaller” British forces as Australian allies. Despite this, he asserted Australia’s continuing Britishness. This claim was not only not supported by actions, but it was also used to justify deeds that were contrary to British policy or interests.

These elements, and especially the decision to align...

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