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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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Conclusion – The Dilemma Resolved


Conclusion –The Dilemma Resolved

“Dear Mum, of course we still love you, but you are there and he is here.”1

This book has two major themes. Both arise from rethinking the current consensus on Australian foreign policy in the 1940s and 1950s: the overstatement of British sentiment and the omission of economics as a fundamental policy determinant. I have considered these problems chronologically. Part I demonstrated that Australia’s alignment with Britain was more fragile than it appeared. The war with Japan revealed these weaknesses and the emergence of America as the dominant regional power. Parts II and III showed the response of the Curtin and Chifley governments. Although, in the crisis of 1942, Australia sought American protection, after the Japanese threat waned, they looked to Britain and the Commonwealth. This reversion occurred despite British frailty and the limitations that this imposed on Australian development. Underpinning the Anglo-Australian bond was the importance of their trade relationship and belief that Britain’s economic decline was only temporary; the absence of extra-Commonwealth institutional links; the ALP’s instinctive anti-Americanism; and fear of being tarred as anti-British.

As Part IV established, the Menzies government could act outside these constraints. The passage of time had made clear that British economic weakness was a long-term problem. By the 1951 Sterling Area crisis, Fadden argued for the need to look economically to America, as “a patch-work job will no longer serve.”2 The Coalition government’s responses to the intensification of the Cold...

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