#62 Independence, Democracy Freedom from Colonial Rule
The central issue of this blog is not only to announce the end of colonial dictatorships around the world, but I want to also ask the question: did this really bring with it the new freedoms everyone wanted?
From the moment the 1945 war came to an end, the government of the USA knew that they wished to become the dominant power. From the end of the 19th century, the USA had become the wealthiest country in the world. It took the leading intellectuals and the governing classes in the next 50 years to work out how they planned to assert their dominance over the rest of the world. Like all powerful nations, they also worked out how they would express that dominance to the countries across the world. Appearances were everything, US global rule had to be seen to be benign in the interests of all.
Comparative Advantage Defined
David Ricardo in 1817 came up with the concept of ‘comparative advantage’. The essence of the idea is that countries that are more 'advanced' economically have a comparative advantage over the production of less advanced countries. A company that uses superior technology to produce any given product can create greater quantity at a lower price than another company that uses older technology. Countries, Ricardo argued, tend to specialise in products they start with an advantage in, often due to natural resources. By 1945, the USA felt their manufacturers had a comparative advantage over all others in the world. They were probably correct at the time. So, they could successfully compete with any company anywhere. The result was they wanted free trade, i.e. trade with the world without leveraging import or export duties. The USA's decision to open up the old colonies to free trade was of historic and lasting importance.
All the old colonialist powers in Europe lost global power. After 1945, the USA consciously decided that she had a ‘competitive advantage’ over all other states. She was sufficiently strong economically that she did not need colonies to take a globally dominant position. During her discussions with Britain in 1943, she laid down that one of her prime conditions for the peace was that all colonised countries were to be open to USA trade. By 1945, the USA was sufficiently powerful to enforce this decision against the wishes of the older colonising powers in Europe and Japan.
The USA not only had a large surplus on her balance of payments, but she was also the only belligerent who did not have a shattered economy and society. Everywhere, countries required US dollars. European recovery might have taken 20 years or more; many leaders thought so. The attraction of communism was obvious; the communist parties in France, Italy, Belgium and several European countries were ready to take power. Just like post-1918, revolution or chaos loomed in 1945-1947. The US had been lending dollars for immediate needs but never enough for sustained recovery. The Marshall Plan from 1948 to 1952 was altogether different and on a sustained scale. Strategic planning and growth were to be planned. Sixteen European states took the funds, amounting to $13 billion, nearer to 150 billion dollars today.
The Marshall Plan came with clear demands:
Imperial preference (the name given to monopoly trade and investment of the colonies) was to be abandoned by France, Britain, and the Netherlands
Their currencies were to be freely convertible into US dollars
These were the basic conditions that ended Britain, France, and Holland as imperial nations.
The US succeeded in a single policy to remove any European power standing in competition with them. The need for US dollars in these post-1945 years in Europe was paramount. Colonial independence followed automatically.
In the decade after 1945, all the previously colonised countries were to be offered their political freedom to rule their people. The arrangement was not sold in these terms; many colonised troops had fought alongside their colonial rulers. These troops returned to their countries after 1945 demanding independence. The demands of the once colonised peoples, the failure of the struggles of the French in Vietnam and Algeria and the British in Malaya and Kenya (countries that had large white settler populations), and the demands of the USA were overwhelming. Political independence was a movement that could not be stopped.
The 'deal' was simple enough. Peoples were to rule themselves. The old colonial ruler was to step aside graciously and to welcome in the new era. What was not clear was that the system of rule was to be limited under conditions determined by the USA. Socialism was not a political option. By the early 1970s people in Africa, Latin America and Asia were still excited that the future was theirs to take. Struggles were occurring across the continents. Yet by the 1980s and certainly, by the 1990s the situation was clear: the US was willing to do whatever was necessary to impose political systems that they approved of. The new political freedoms were limited. All resistance was met by force. People were to be ruled by themselves but under rules written in Washington. Those peoples and movements that resisted were to be met by whatever tools the US could concoct.
For the first fifty years of political freedom from colonial rule, from around the 1960s to approximately 2000 or 2010, only limited economic supports were offered to all the new governments. The newly created ‘Third World’ had had their economies and ways of life fundamentally altered by the colonial dictatorships. The introduction of 'private property' of land altered the dynamic of every society it touched. Export crops had been introduced to provide a cash economy. Peasants were expected to pay taxes in cash. Where there were valuable mineral resources the colonial country arranged the mining and export of the mineral and took the majority of the cash proceeds. The economy of each colonised country was monopolised by the coloniser. Education had been introduced for the small lucky elite in some but not all countries. Students in Africa were taught that they had no history of their own, so they learnt the coloniser’s history. For the majority, there had been no preparation for political independence.
This far too short a summary may give readers a quick feel of what colonisation had done to the economies of peoples colonised across the world. Development in terms of raising people’s standard of living had barely begun. The wars from 1914 to 1945 had been fought by all the belligerents to expand their global colonial power, not reduce them. No one had considered what losing their colonies meant on the ground. No preparations had been made.
The political debate in the 1960s and 70s across the ‘Third World’ was about whether the European or American political system of democracy was suitable for their needs. No colonised peoples had had any experience of such systems: they had only known colonised dictatorship and of course their pre-colonial systems. There was no discussion about industrialisation in the 1960s or 1970s, or what it entailed, or how to introduce it.
Poverty was the norm everywhere. China and India were considered some of the poorest countries in the world. The majority of people in Africa were predominantly rural, living according to the norms of the world they had known since time immemorial. Yet people commandeered into the military forces from across the globe had experienced the Europeans fighting each other. Any vestige of the concept that these white-skinned peoples had a ‘superior’ civilisation had disappeared over the 30 years between 1914 and 1945. Political independence everywhere was welcomed. Yet, as we shall see, there was still considerable fighting to be done to achieve this end. The major final colonial battles were in Korea and Vietnam, which spilt over into neighbouring Laos and Cambodia, with lesser but still bitter fighting in Kenya, Algeria, and Malaya.
From the moment of independence, everybody wanted ‘development’. What did this mean? There was no magic wand; everyone could understand that the western nations had vastly increased their wealth and of course, all the new nations and peoples wanted some for their own. This key issue remained how to obtain some? For many of the formerly colonised nations, there was a steep learning curve.
Freedom did not mean socialism. The USA rapidly developed, mostly secretly, military institutions, of which the CIA is the most famous. The CIA rapidly became global and had operatives working in every US embassy around the world. CIA operatives worked with political-military and intellectual leaders and developed their influences from Berlin to Delhi.
The new nation-states were - at least, on paper - free, but severely limited by the new masters of the world. This would lead to new and continuous wars in many parts of the developing world: wars that have grown in new directions in the 21st century. The period from the 1960s was characterised in part by coups, the assassination of leaders and local wars to ensure that the new countries would maintain the world as determined by the new global world power.
China, Vietnam, and Cuba, those countries that managed to develop outside the system demanded by the USA, leant on the teaching of Marx. All three countries attempted to adapt and interpret Marx's writing for their circumstances. Marx is known as a revolutionary, but his extensive writings provided these nations with a secular analysis of history and political economy. Out of Marx's background, they had to create their own answers. The rest of the newly developing world had the analysis of American and European capitalist academics in the newly created scholarly field of Development Studies.
The key to industrialisation was infrastructure development and a banking system to support the investment required. The old colonial nations and the USA had limited interest to support industrialisation in their previously colonised nations. They were interested, though, in maintaining existing frameworks so that they remained economically dominant. Previously colonised nations remained dependents as providers of cheap natural resources, raw materials, e.g. cotton, coffee, soya beans, and so on. The apparatus of the World Bank and the International Monetary Fund were there supposedly to support development. In practice, the IMF was a tool for the Americans and their allies to discipline the supposedly independent newly created states. The newly created global infrastructure created at Bretton Woods in 1944 was there purposively to keep the old colonized economies as free-market economies.
So, whilst the new governments were ‘free’, their hands were tied tightly to the dictates of the American way to run economic affairs. With this, they could forget enriching their own people.
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The peoples of Western Europe had risen from one world of relative poverty and had learnt how to take the wealth from the Americas and transfer it to their own countries. This was slavery and latterly until 1920, indentureship. A whole set up of banks, shipping companies, and insurance companies had arisen to make these transfers possible. From the 1750s the European invaders turned their attention to Asia and systematically began the colonisation process anew. At the same time, as they attempted to colonise and extract the wealth of Asia, the colonising countries began the process we now recognise as industrialisation alongside the rapid growth of cities. The surplus resources extracted through colonisation were used to finance the growth of new industries.