The Challenge of Hegemony: Grand Strategy, Trade, and Domestic Politics

3 Liberal Contenders and Britain’s Grand Strategy of Cooperation 1889-1912

C H A P T E R 3 Liberal Contenders and Britain’s Grand Strategy of Cooperation, 1889–1912 In the sixty or so years after the Napoleonic Wars, Britain came to dominate many regions of the globe. These spheres of formal and informal in›uence comprised the Far East, especially China; central Asia, including the “Jewel in the Crown,” India, and the buffer territories of Persia and the Gulf, Afghanistan, and Tibet; the Mediterranean (the Straits of Gibraltar and the Turkish Straits); southern and eastern Africa; and Central and Latin America. While it did not dominate Europe, Britain was the historic balancer on the Continent. To defend its far-›ung interests, Britain’s Royal Navy commanded the high seas as well as most of the strategic sealanes of communication. As Admiral Fisher gloated, “Five strategic keys lock up the world!” (Kennedy 1976, 244). They were Singapore, the Cape, Alexandria, Gibraltar, and Dover, and they all belonged to England. An extensive global network of coaling stations, cable stations, and naval bases supported Britain’s naval and commercial supremacy. By the last decade of the nineteenth century, the dilemma for London was how to respond to the simultaneous and multiplying dangers, given Britain’s limited national resources and extended global commitments. Britain confronted multiple contenders for regional hegemony that were ascending at differential rates and challenging Britain in disparate parts of its formal and informal empire. Britain faced intense industrial competition and naval construction challenges from Germany, the United States, Russia, France, and Japan in the Far East; France and Germany in the Middle East and Africa; France and Russia in the Mediterranean; Germany on the Continent; Russia in central Asia; and the United States in Central and Latin America. Within Britain, members of the opposing free-trade bloc and the eco43 nomic nationalist faction vied to shape how London would select which contenders to punish, where to cooperate, and how to allocate societal resources between the nation’s economy and its security. Their agendas clashed on key issues such as naval construction, army reform, and national conscription; tariffs and imperial preferences; ‹scal orthodoxy and state intervention in the economy; social and economic reforms; international arms control and arms reduction agreements; and the empire. The members of the economic nationalist coalition included uncompetitive ‹rms and export-oriented staple industries (steel, iron, textiles ), farmers and landowners (cheap cereal poured in from Russia, Eastern Europe, and the United States), the military services (War Of‹ce, Admiralty) and supporting lobbying organizations (the Navy League), the Conservative Party, pro-empire organizations, and colonial bureaucrats (the Colonial Of‹ce and the India Of‹ce).1 Economic nationalists favored a grand strategy of punishing rising liberal and imperial contenders through (1) tariff reform to heighten trade barriers against foreign competition and imperial preferences to protect British industry and imperial markets, (2) closer economic and military ties to the empire, and (3) greater military preparedness. Economic nationalists warned that failure to punish contenders would tempt states to challenge Britain’s domestic and empire markets, sea-lanes of communication, and home defense. Preempting the backlash from the free-trade faction over the cost of higher naval Estimates, the First Lord of the Admiralty, Lord Selborne, wrote in 1901, “Compare our burthen of taxation, our debt, & our wealth with that of most of our continental neighbours, and it is impossible for me to believe that we are approaching the end of our resources” (Boyce 1990, 126). In opposition, members of the free-trade coalition included invisible exports such as overseas investments, shipping, insurance, ‹nancial institutions and other commercial services (merchant banking such as the Bank of England, known broadly as the City), the Liberal Party (constituents included the middle and working class), Radicals, the Treasury, and top civil servants. Free traders favored a grand strategy of accommodating and cooperating with rising contenders, especially commercially liberal powers, through a program of (1) an open world economy (by the elimination of duties and a reduction of protectionism and tariffs), (2) ‹scal and monetary orthodoxy (the Gladstonian tradition of limited government expenditure on defense and social welfare, low taxation, minimal state interference in the economy, and free trade) and safeguarding the gold standard, (3) military retrenchment, the sharing of mutual interests 44 The Challenge of Hegemony with partners or allies, the settlement of existing con›icts to reduce tension , and international arms control agreements, and (4) retreat from empire (both formal and...