#65 Controlling the Peace: Loss, Re-establishment, Chaos and Hunger
It is worth pausing in this narrative to consider the loss of world power. Britain had not been militarily defeated in 1945. Her ruling elites have never admitted publicly that they had lost the most important item that they had fought for: the opportunity to extend their global colonial power alongside the USA. That statement alone is of course contentious.
It was easier to glorify in being on the winning side and to argue in public that they had fought for high principled reasons to maintain the islands freedoms.
Both Britain and France had fought for 400 years to obtain 'global world power'. French and British ruling cadres were immensely proud of this history. The French fought the Vietnam and the Algerian wars in the 1940s to retain their self-image as a great nation. The British had attempted to retake the Suez Canal after it was nationalised by Nasser in 1956. This all ultimately failed and ended in humiliation.
After 1945 and well into the 1950s, Britain was heavily dependent on American goodwill. After the end of World War Two, the UK was heavily in debt to the USA. There was an American loan in 1946, and then under the Marshall Plan the UK slowly paid off its debt to the USA. A continuous balance-of-payments crisis and the instability of the pound sterling made Britain highly dependent on the USA. It was this debtor reality that determined Britain's special but dependent relationship.
Likewise, Britain has fudged the explanation to its young people why 'Britain gave independence to its colonies’. The Atlantic Charter agreed between the U.S. and the UK asserted the freedom of all nations the right of self-determination. In practice, the Americans had made the ending of colonial rule a condition in the Marshall Plan for any relationship with France or the UK. Neither had any choice in the matter.
Thereafter, both countries repeated endlessly that they had a ‘special relationship’ with the USA which the Americans exploited by using British and French territory for their surveillance operations. Tony Blair attempted to resuscitate this ‘specialness’ by invading Iraq alongside the USA in 2003. The British will probably see yet another attempt to ‘specialise the relations’ with the USA over Brexit.
Coming to terms with the end of the colonial era and the concrete power relations in the world has yet to take place, at least as far as the British are concerned.
The USA as a Different World Power
The USA as a world power was distinctly different from the British, French, or Dutch in the 19th century:
1. The USA was a land empire in its own right: they had only recently conquered their home territory in the 19th century.
2. The USA had industrialised during the 19th century – unlike their southern neighbours. By 1945, the USA was by far the largest and wealthiest nation-state in the world.
3. They were also technically in advance of the Europeans, and willing to compete to trade and provide investment services across the world.
After 1945, the USA expected countries to rule themselves under principles established by the USA.
The new leaders would not be given major financial supports to build up their countries into industrial centres. Instead, they would be encouraged to export raw materials and import finished goods. Should they stray by over-borrowing, then the IMF would step in and re-establish US policy. If they chose to nationalize, US-owned industries, they would be threatened by coups, invasions or sanctions and intense pressure. Finally, should they choose a socialist government then they would be destroyed in whatever fashion was available to the CIA and its allies? All this is to be elaborated on in the coming blogs.
1945: Chaos throughout Europe and Japan
In the 21st century, it is difficult to imagine the chaos in all of Europe during the years after the end of hostilities. In 1919, a huge volume of people found themselves homeless when the old Austro-Hungarian and Ottoman empires collapsed. Relatively new small single-ethnic or single-language states were created. In1945, the number of homeless people fleeing oppression, looking for a safe environment had been increased many times.
The numbers must be approximations, as the ability of authorities to count people was limited by the circumstances. However, there was certainly widespread hunger and destitution on a scale difficult to imagine now.
Up to 12 million German-speaking peoples who had been living in Poland and Czechoslovakia were displaced and became refugees. Ethnic Germans were expelled from all the areas that Germany had conquered. 15 to 20% of the new West Germany were refugees and 25% of the new East Germany.
There were 6 million forced labourers who had been taken to Germany during the war. These included Ukrainians, Poles, French, Latvians, Lithuanians Russians, Yugoslavs, and Italians. All had been forcibly deported and sent to Germany or German-invaded territory. Some 11 million people had been taken from eastern Europe as slave labour.
There were also very large numbers of survivors of the concentration camps, prisoners of war, and people who either did not want to return to the new European Soviet sphere or had supported the German occupation and feared reprisals if they returned home.
Refugees or displaced persons were housed in 'camps' spread across Europe. By 1947, there were still around 1 million people from every ethnic group on the continent. To add to the misery, many eastern Europeans had fled their homes to avoid the advancing Soviet troops in 1944 and 45.
Displaced persons came from every country that had been occupied by the German army. Many displaced people were hungry, ill, malnourished or dying. The new United Nations Relief and Rehabilitation Administration, UNRRA, ran many of the camps. Jewish people from the camps had an especially difficult few years. If they returned home, they faced renewed anti-Semitism, or their homes had ceased to exist. Britain strongly curtailed Jewish immigration to Palestine, while the move of Jews to the USA was restricted with quotas.
The task faced by the winning sides was colossal. The complications must have appeared to be never-ending. Some people feared persecution by their own people, some from the Soviet Union, or from Tito (the leader of the new Yugoslavia); some because they were Jews. As the Cold War got underway, many displaced people were sent off to the USA, Canada, Australia, and the UK for resettlement.
Japan faced comparable devastation. Between 2 and 3 million people were killed and injured in the war. Japan lost 25% of her material national wealth; in the year after 1945, her industrial production dropped by 90%. Following the war, the country experienced hyperinflation. For the first five years, the Americans ruled the country, the Korean War in 1950 and the decisions in Washington to confront the Soviet Union were the country's saviour. Policy changed, and full-scale development became the new policy. Like Germany, the task of reconstruction faced by all involved was colossal.
The Americans ruled Japan for six years until 1951 when Japan was able to rule herself again. In the intervening period, the old Zaibutsu, the concentration of the major industries and banking conglomerates were dissolved. The economy was stabilised and a new banking structure was set up, especially the Japanese Development Bank, a new Exim Bank, and a new medium and small business bank. In brief, this was a financial structure focused on the Japanese need to resuscitate her economy.
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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.