The Anglo-Saxon Social Model

[Rattigan]

The New Elizabethans: The General Election of 1953

By the time the Treaty of London was signed, the British economy had staged a dramatic recovery from the damage done by the War. This was staged partly with the help of a housing and infrastructure construction boom (in this way the UK could effectively use People’s Home programmes twice over to recover from two different crises) and also through money made available by the SWF and the Keynes Plan (the latter of which was extended in September 1945 to September 1955). In the decade after 1945, British society became more commercialised and average earnings and standards of living rose steadily, standing at nearly double their nearest European competitor by 1955.

Notable British success stories in this period were in new high tech industries as the manufacturing economy successfully continued to pivot away from heavy industry. In particular, the De Havilland ‘Comet’ became the world’s first commercial jet airliner in 1952 and it fast outpaced its competitors to become the leading aeronautics company in the world by 1960 (although this was no doubt helped by a number of high profile accidents suffered by its American competitor Boeing). Furthermore, the British motor industry remained near-hegemonic in the Commonwealth and dominant in European and South American markets. Of particular note was the firm Rootes Motors Limited, which purchased the entirety of the German Volkswagen company in 1946, proceeding to strip the contents and transport as much of it as they could back to Britain, resulting in the production of the famous ‘Rootes Beetle’ in 1948. Rootes was often bracketed with the brands MG, Rover, Austin, Morris and Jaguar as the ‘Big Six.’ Taken together, the British automobile industry accounted for nearly 52% of the world’s exported cars.

Alongside these successes, the influence of the SWF was could be seen in a number of experimental sectors, although these would not be felt to their fullest extent until further on in the 1950s. As we have already seen, the involvement of the SWF was key to the focus of the British nuclear industry on civilian electrical applications as well as warfare. When giving out SWF funds directly, Keynes set a pattern that would be adopted by his successors: rather than investing in particular companies, the SWF invested in sectors, encouraging competition and stimulating innovation. On the other hand, when money from the SWF was given to the government for investment, they tended to adopt a more statist approach. A good example of the former was the burgeoning British computing industry and a good example of the latter was the British (later Commonwealth) space agency. As we have seen, the CSA was a notable propaganda victory for the Commonwealth and a key factor in Attlee’s decision to go to the country in September 1953, while we shall read more about the computing industry in the future.

Buoyed by the strong economy, the Megaroc Shock and Churchill’s departure from Parliament, Attlee dissolved Parliament and called an election for September 1953. Despite canny timing and a shrewd campaign, Labour nevertheless suffered the fate of most parties in power and lost seats, although they retained a workable majority of 14. Gwilym Lloyd George had assumed the leadership of the Liberals in the wake of Churchill’s defection and received praise for managing to cobble together a decent enough campaign that saw a net gain of 13 seats, mainly in urban suburbs and the Irish countryside. Five of those seats came at the expense of the Liberal Nationals, who now entered a period of protracted and terminal decline.

The Conservatives, still under the leadership of Anthony Eden, dropped the harder right aspects of their 1949 manifesto and made a gain of three seats. Certainly a success on its own terms, these gains managed to cement the party’s continued existence but it did little more than that. The Conservatives remained as far from relevance as ever. As the Conservative MP Harold Macmillan noted in his diary, when he had first entered politics, a gain of three would have been disastrous and he was apprehensive about the celebrations they caused amongst younger party workers.

 

[Duke of Nova Scotia]

Megaroc Shock sounds like an awesome 80s hair metal, UK pop, or German dealthmetal band name.

Could the near collapse of the conservatives lead to a rebuild of the party into either a more Canadian progressive-conservative of red toryism, or the modern blue-liberal conservative?

 

[Rattigan]

Megaroc Shock sounds like an awesome 80s hair metal, UK pop, or German dealthmetal band name.

I've not decided how or when punk will rear its head in TTL but that thought did cross my mind.

Could the near collapse of the conservatives lead to a rebuild of the party into either a more Canadian progressive-conservative of red toryism, or the modern blue-liberal conservative?

The Tories are certainly going to go on a bit of a journey but, as is the way of these things, we won't see the fully fledged results until the 1970s.

 

[Thomas1195]

Will there be differences in British approach towards European integration ITTL? Note that IOTL the Liberals were pro-ECSC.

 

[Rattigan]

Will there be differences in British approach towards European integration ITTL? Note that IOTL the Liberals were pro-ECSC.

European integration as a thing isn't really the same TTL and so the British/Commonwealth doesn't really have an opinion of it in the same way. I'll be doing a post on France in the next couple of weeks which goes into this in more detail but basically France's energies in the postwar decades were more directed at trying to turn their Empire into a version of the Commonwealth and make that work (it won't, at least not in the same way, but I'll go into more detail on that later). The Benelux have been more successful at integrating the former Dutch East Indies into a customs union. Italy and Spain are both doing much better economically than OTL. So there isn't really as much of an impulse towards integration as there was OTL, from outside Germany.

It's also worth noting that Germany is far more 'broken' TTL: not just partitioned politically but its industrial and military capacity was more coherently broken up (not quite to the level of the Morgenthau Plan but approaching that) - something helped by friendlier western relations with the Soviets in the second half of the 1940s. The largest industry in the former German states (outside of Hanover, Austria and Bavaria, who were in the Commonwealth and American spheres of influence and were left more as they were) is therefore agriculture with a few small-scale manufacturing plants. It's economy looks something like it did in the mid-to-late nineteenth century. (It's GDP per capita in 1960 is probably about $500 - in-universe TTL GDP per capita will be expressed differently but that gives you an idea.) What large-scale energy industries there are - generally concentrated in the Rhineland - tend to be owned by French or Italian multinationals.

So, given that, something like the OTL ECSC isn't really necessary and doesn't exist TTL. European integration as an ideal will definitely still exist: Otto von Habsburg is currently King Otto I of Austria and his pan-Europeanist views won't have changed; political parties advocating German reunification still have a place on the far right of politics in Austria, Bavaria and Hanover; and Germanist views will still exist in the other German states with a kind of anti-colonialist vibe. But it's very different from OTL Schuman and Monnet.

In terms of Commonwealth policy in Europe itself, the policy-making establishment is generally happy with the creation of NATO in 1949 and the Bucharest Pact a year later, seeing this as creating a stable balance of power on the continent. The Benelux and Hanover are the Commonwealth's most reliable allies in the region, with Greece also being a close friend in the Mediterranean.

 

[Rattigan]

The Wind of Change: Decolonisation in Africa and the Caribbean

John Strachey delivering his famous speech at the opening of the Rhodesian Parliament in 1953


Under John Strachey's direction the British government undertook a thoroughgoing program of imperial reform that put many colonies on the fast track to independence. This was the result of a number of interlocking causes: in the first place, there was a kind of anti-imperialist idealism (at least in Strachey’s case) but this was never dominant; in the context of the Lismore System, there was also an imperative to develop colonial governments in order to achieve a trade balance; there was also the military realisation (first noted in the sacking of Auchinleck in India) that the Commonwealth could no longer repress the Empire into line (if it ever could - much of British power had always been a bluff); finally there was also the general desire of British authorities to remain ahead of the curve when it came to reform and not allow nationalists and anti-colonial activists to dominate the conversation. This last factor meant that, once there was a native elite in the colonies who were able to articulate and disseminate their own ideologies, events could very quickly take on a momentum of their own. By the 1950s this was the case in many of Britain’s African, Asian and Caribbean colonies, an ironic legacy of the policies of infrastructure and educational improvements initiated by Joseph Chamberlain at the Colonial Office in the 1880s.

Aside from the most famous examples of India, Ceylon and Burma, the process of decolonisation began with the two possessions Britain had seized from Spain in 1874: Puerto Rico and the Philippines. The former remained majority hispanophone and more closely connected with the cultures of Latin America than with the rest of the British caribbean. Since the 1910s, the island had also experienced a great deal of economic growth, partly stimulated by the stationing of a Royal Naval base there, and by 1945 was effectively a modern industrial economy. Although the Philippines remained a predominantly agricultural and export-based economy, it had also remained stubbornly unassimilated with the British colonies and Commonwealth nations nearest them. It was also only narrowly pacified (an insurgency ran off and on well into the 1890s) and its occupation by the Chinese during the World War had further increased the gulf between it and the rest of the Anglosphere. Both nations, too, had nationalist and powerful local elites who were, at best, skeptical of continued British domination.

Postwar Puerto Rico was dominated by Luis Munoz Marin, under whom the country organised a convention on independence which produced a constitution. Following negotiation with Westminster, the constitution was put to the country by a referendum on 3 July 1951. The constitution passed easily and Puerto Rico achieved independence exactly a year later. This example was important in the Philippines and the archipelago’s local elites began to pressure the British to give similar concessions. Strachey was sympathetic to the idea and in October 1952 agreed to a timetable to independence in 1957, which passed off without notable hitches. Following independence, Puerto Rico remained within the British sphere and became a full founding member of the Commonwealth in 1953 (partly, it was suspected, because Munoz Marin wanted to encourage emigration to the UK as a way of handling overpopulation). The new Philippine government, however, had no such qualms and adopted a republican constitution in 1958, leaving the Commonwealth.

Things were a good deal more complicated in Africa, not only because the relative levels of economic and educational development remained lower but also because of the fraught question of race. In private, Strachey was dismayed by the formalisation of the apartheid policies in South Africa by successive National Party governments, but was prevented from making too strong a public statement against it by the terms of the Balfour Declaration. Concerned by the white-dominated and Afrikaner-influenced government of Southern Rhodesia, before the Ottawa Declaration and the signing of the Treaty of London Strachey chose to use the UK’s residual powers under the Balfour Declaration to revoke responsible government in Southern Rhodesia and amalgamate it with that of Northern Rhodesia and Nyasaland (colonies with small to negligible white settler populations and black presences in colonial governance). At the same time, the Westminster government set out a 10-year plan for the new Central African Federation of Rhodesia and Nyasaland (commonly referred to simply as ‘Rhodesia’) to become a full member of the Commonwealth providing that certain political and civil rights reforms were successfully undertaken.

At the opening of the new Rhodesian Parliament in the capital city Chamberlain in August 1953, Strachey delivered a speech noting that a “wind of change is blowing through Africa” and warning unnamed white colonists to make peace with black majority rule. The first Rhodesian Prime Minister was New Zealand-born Garfield Todd, an opponent of white-minority rule. Todd introduced a series of reforms to improve the lot of black citizens, including increasing the number of schools, allowing them to buy alcohol and increasing the number of blacks eligible to vote from 16% to 59%. He was supported in this by a vocal civil rights movement. The Rhodesian government also incorporated the African Affairs Board, set up to safeguard the interests black Africans and empowered with the power to review and potentially even throw out racially discriminatory legislation.

The economic rationale behind the amalgamation was also not seriously questioned, with Northern Rhodesian and Nyasalandic businesses gaining access to larger Southern Rhodesian markets and infrastructure being rolled out across all three regions. The only opposition came from conservative minded whites in Southern Rhodesia and from the South African government, who were concerned about their increasingly isolated position in the Commonwealth and were furious at Strachey’s Chamberlain speech.

 

[Rattigan]

The Passing of the Last Edwardian: Attlee into Gaitskell

On 12 November 1955, Attlee announced that he would retire on 26 November, the tenth anniversary of his victory in 1945. Tired after a tumultuous decade as Prime Minister, over 15 in the Cabinet and just under 20 as leader of his party, Attlee felt that the time was right for him to go. Importantly, he also judged that his preferred successor, Gaitskell, now had enough of a parliamentary power base to succeed him as leader. Attlee gave Gaitskell advance notice of his decision, allowing the younger man the time to prepare his leadership team and sound out allies and potential allies in secret. Under the changes to the leadership rules agreed in 1942, there would be two rounds of voting, the first between all the candidates (who had to be MPs) and the second between the two candidates with the highest number of votes. Nye Bevan, father of the NHS and long-term Health Secretary, stood as the candidate of the party’s left and Herbert Morrison, a giant of London politics and decade-long frustrated Lord President, also stood.

In a spirited campaign, Gaitskell’s superior organisation told and he won the only ballot of MPs on 25 November, taking 221 MPs (nearly 60% of the parliamentary party) with him.

Aware that he had been elected only by Labour MPs, Gaitskell was stung by criticism from his internal critics and the Liberals that he lacked a popular mandate. In February 1956 Labour did better than expected in local council elections and Gaitskell decided to strike while the iron was hot and dissolved Parliament and announced a general election to be held on 30 April. Labour campaigned with the slogan “You Know Labour Government Works” and their efficient national campaign outclassed the Liberals, who seemed oddly underprepared (despite having called for Gaitskell to face the public beforehand). Gwilym Lloyd George, it appears, was too concerned with dealing with internal party business and handing over to his chosen successor to properly focus on the surprise electoral challenge.

The campaign itself was largely unsurprising, with Labour’s machine in control and the Liberals and the Conservatives nowhere near where they needed to be to fight it. The only major talking point came on 19 April, when the Sol-1 (the CSA’s first attempt at manned spaceflight) exploded on the launch pad, killing Lionel Crabb, its sole crewman. Lloyd George attempted to use the incident to criticise Labour’s record on space but these rather fell flat when he couldn’t point to a strong Liberal plan in opposition. When Crabb’s wife gave an interview to the ‘Daily Mirror’ in which they came out in support of Gaitskell, any momentum the Liberal’s might have had behind them was instantly killed. (The interview itself was transparently a stunt because Crabb and his wife had in fact been separated for three years at the time of his death, something no newspapers saw fit to mention at the time.)

On polling day, the results were quietly devastating for the opposition parties. Labour won their fourth successive general election with an increased majority, picking up an extra 47 seats. The Liberals lost a total of 50 seats, including to independents. The Conservatives and National Liberals more or less stood still, losing 1 and gaining 3 seats, respectively. For the Conservatives, the results were especially bad: although they had recovered from their near-annihilation of 1945, their loss of a single seat in this election cemented the permanence of their third-party status. Eden was, or had been, a dashing and charismatic figure but now saw his career disappearing in a puff of changed political culture. In ill health, he retired from the leadership of the party and soon went on well-attended speaking tours around the Commonwealth and the United States, a relic of an earlier time.

The leadership fight and subsequent election had allowed Gaitskell to prove his point to his internal opponents and unify the party under his hegemony. Cleverly, Gaitskell used this position to reach across the aisle to the Bevanites, co-opting younger members and securing the loyalty of older ones. Prominent Bevanites to enter the cabinet were Harold Wilson as President of the Board of Trade (under the watchful eye of Gaitskell’s trusted lieutenant Evan Durbin, who had become Chancellor when Gaitskell had won the leadership in November 1955) and Barbara Castle as Education Secretary. He also brought in fresh blood from across the parliamentary party, with George Brown, Roy Jenkins and James Callaghan becoming Agriculture Secretary, Commonwealth Secretary and Minister for Labour, respectively. Junior ministerial posts, of Transport Minister and Foreign Office Undersecretary, were given to Anthony Benn and Denis Healey, respectively.

With the economy continuing to grow, Gaitskell’s government did not face immediate problems on the domestic front. Although the Keynes Plan officially came to an end in September 1955, a combination of the close economic links between the Commonwealth member states and the general British economic recovery meant that the shortfall was barely noticed (if, as some economists have argued since, it really existed meaningfully at all by this stage) and did not put stress on the nation’s finances. In this context, Gaitskell’s government pursued a number of reforms to improve health and improve the environment in British cities and workplaces. The most notable of these were the Factories and Office Act 1957 and the Clear Air Act 1958, both of which formed the basis of the ‘Health and Safety’ legislation that would be pushed further via Commonwealth law in the 1960s.

In terms of infrastructure, by the late 1950s British infrastructure was beginning to be put under strain and Gaitskell’s government would be involved in kicking off a lively national discourse around transport and energy infrastructure that would last, off and on, for the next four decades. Key to these debates, in one form or another, would be Benn. He was the primary author of the government’s ‘Modernisation and Re-Equipment’ plan of 1958, which set out an ambitious plan to electrify the whole of the country’s railways and repair and replace a number of rail lines. These reforms successfully turned the railways back into the premier passenger moving service in the UK, successfully regaining the status they had lost to the car industry in the 1920s and ‘30s.

The desire to cut car numbers was influenced not only by practical concerns but also worries over the country’s energy independence. The 1950s was a time of relatively cheap oil but many were concerned that this relied on a set of circumstances - namely a peaceful Middle East typified by close relations between Britain and Arabia - that could change at any moment. The Iranian Revolution of 1953 - in which the Shah was forced by street protests to appoint a government headed by Mohammad Mosaddegh - was thought of as a potential portend of things to come. Although the British government had decided against ousting Mosaddegh in 1953, his government had not proved friendly to the Commonwealth and was, while not a Soviet puppet like Armenia, certainly more pro-Soviet than anything else. Furthermore, although the oil and natural gas fields of the North Sea had the potential to solve domestic consumption issues, the SWF was adamant that they should be exploited for predominantly export and investment purposes. This left most British people still using coal, stocks of which were rapidly depleting. Thus, the government began to cast around for alternative energy sources.

The answer that was alighted upon in the end (indeed, with hindsight, probably the most obvious solution) was the nuclear industry. A small number of nuclear plants were already on-line by 1956 (and more popping up around the Commonwealth as part of the Atoms for Peace programme) and the world’s first purely civilian nuclear station was opened in December 1957. In 1958, Durbin and Callaghan co-authored a white paper setting out a plan to transition the UK energy-mix primarily to nuclear power by 1970. A new generation of power plants were constructed between 1956 and 1961, using British-designed pressurised water reactors. Although these plants were owned and operated by private companies, the technology was owned by the SWF and leased to private contractors, guaranteeing a further income source for the organisation. Costs were further kept down by the publication in 1959 of the National Spent Nuclear Fuel Strategy, which rapidly attained the status of a holy writ in administrative circles and ensured that there has been a consistent policy of reprocessing and storing spent fuel in the decades since then.

 

[Nyvis]

So the UK goes the way of OTL France and try turning its grid to nuclear? If that spreads into the commonwealth, that's going to be interesting.

On the other hand, I'm wondering... With the loss of India, they lost a big chunk of the potential for development, and may still lose others in decolonization. What size will the final commonwealth end up being at? How many of the nonwhite colonies will end up joining? I think that's what will determine if it'll be able to remain a full size power block into the 21th century or start slipping as nonwestern nations start catching back up.

 

[Rattigan]

On the other hand, I'm wondering... With the loss of India, they lost a big chunk of the potential for development, and may still lose others in decolonization. What size will the final commonwealth end up being at? How many of the nonwhite colonies will end up joining? I think that's what will determine if it'll be able to remain a full size power block into the 21th century or start slipping as nonwestern nations start catching back up.

There's a lot of room for development in Pakistan and Bengal, I'd say. Pakistan in particular is going on an enormous economic expansion (think OTL South Korea as a vague comparison) and will become an increasingly important player in the Commonwealth over the course of the 60s.

Updates next week are coming on decolnisation, especially Rhodesia, South Africa and the other African colonies. Some will stay and others won't. I'm trying to avoid the whole TL becoming a full-on Britwank by having several of their plans go awry so it's not going to be straightforward.

 

[Nyvis]

There's a lot of room for development in Pakistan and Bengal, I'd say. Pakistan in particular is going on an enormous economic expansion (think OTL South Korea as a vague comparison) and will become an increasingly important player in the Commonwealth over the course of the 60s.

Oh yeah forgot they kept those.

Updates next week are coming on decolnisation, especially Rhodesia, South Africa and the other African colonies. Some will stay and others won't. I'm trying to avoid the whole TL becoming a full-on Britwank by having several of their plans go awry so it's not going to be straightforward.

The decolonization tree requires its regular watering with rhodieboo tears!

 

[Rattigan]

Black Star: Ghana, South Africa and the First Cracks in the Commonwealth

Kwame Nkrumah at the Prime Ministers' Conference, March 1957


The primary foreign affairs issue to face the first Gaitskell ministry was very similar to that which had faced Attlee towards the end of his premiership: that of decolonisation and Commonwealth relations. The creation of the Rhodesian Federation had been the last gasp of British autocratic power with regard to its colonies (and, even then, had only succeeded because it had the support of the crucial duo of Canada and Australia) and now the process of Commonwealth accession would have to proceed with the consent of the other member states.

Fortunately however, the Gaitskell ministry and the Commonwealth bureaucracy found themselves generally united in the belief that cooperation with local African nationalist elites was necessary in order to stop them falling out of the Commonwealth sphere of influence. An early example of this was the bringing into government of Jomo Kenyatta’s New Africa Party in 1952. More generally, Strachey took inspiration from Rhodesia, where events after 1953 were proceeding unevenly but not in a manner completely contrary to British liking. The Todd government and a civil rights movement led by the radical Joshua Nkomo were making inroads into progressively expanding the franchise and ending property and racial qualifications.

At a Commonwealth meeting in 1956, the Commonwealth Cabinet and heads of government formally adopted the ‘Commonwealth Communique on Independence.’ The Communique agreed that smaller so-called ‘unproductive’ colonies would be amalgamated in federal or confederal structures and put on a fast track to independence. Only the South African government was opposed. This move would, in theory, ready the soon-to-be former colonies for independence in an international economic world governed by the Lismore System but it also served a more cynical realpolitik purpose: the combining of several colonies into devolved administrations would keep an Anglophilic elite in charge at a federal level while allowing tribal and older colonial and anti-colonial elites to have certain powers below them.

To this end, the Federation of the East Indies was founded in 1957, amalgamating the colonial administrations of Singapore, Malacca and Penang. The Federation of the West Indies followed the next year, combining the remaining Anglophone colonies in the Caribbean. A year after that, the Federation of the South Seas was founded, consisting of all of the British possessions in the Pacific apart from Papua New Guinea (which remained under Australian administration). In 1960, the most significant amalgamation occurred, with the Federation of East Africa combining the governments of the colonies of Uganda, Kenya, Zanzibar and Tanganyika. The Commonwealth Parliament had voted on all of these amalgamations and most of them had been a formality but the creation of East Africa provoked a storm of protest from the South African delegates, who protested that the creation of another racially mixed African Commonwealth member state was designed to isolate them (which, in fairness, was not untrue). Their entire delegation voted against the reorganisation and were joined by a handful of the more extreme right wing delegates from other member states. While this was not enough to prevent the approval by a landslide, it left South African increasingly obviously isolated and mistrustful of her Commonwealth colleagues.

However, Strachey’s schemes proved to be much less successful in western Africa, where the colonies were already large enough to float as independent countries and local colonial elites were pushing for independence within the shortest possible time. They were also the countries where colonial governance had been most extractive and dictatorial, meaning that the British rhetoric of trusteeship (which seems to have been mostly genuinely held, if unevenly acted upon, in Asia, east Africa and Rhodesia) was more or less entirely empty. In the Gold Coast, for example, pro-independence politicians won the legislative elections in 1946 and formed the Convention People’s Party (“CPP”), headed by Kwame Nkrumah. While the British and Commonwealth authorities hoped the CPP’s popularity would founder on their governing record, Nkrumah proved to be an effective administrator (within the strictures of the limited powers of the Gold Coast’s assembly) and the CPP won a further majority in 1951 and nearly three quarters of the seats in 1956. The CPP passed a motion calling for independence in August 1956 and, at a summit with Commonwealth prime ministers in November 1956, Nkrumah informed them that he would pass a unilateral declaration of independence if the Commonwealth didn’t agree to independence within a year.

Stunned, the prime ministers agreed to Nkrumah’s timetable. However, there was an immediate stumbling point over the question of whether or not the new nation of Ghana would join the Commonwealth. It had been generally assumed that they would but, now, the isolation and opposition of South Africa became important. While the amalgamations could be approved by a simple majority in the assembly, the accession of new member states had to be approved both by the assembly and then unanimously at a joint meeting of the cabinet and the prime ministers. South African Prime Minister Hans Strydom vetoed the accession (something that, ironically, Nkrumah was only too happy with) and instead the Gold Coast became independent as the Republic of Ghana on 1 January 1958.

 

[Feasal Raider]

I have a feeling that South Africa will try something in the future that will get them expel from the Commonwealth.

It seem that the Lismore system is designed to pull countries together into groups, especially to pull bancor credits together. This might be to the benefit of the mother countries to try to retain influence during decolonization. But what about countries that are not in any groups? Either independent like Ethiopia or newly independent countries that leave the "union" like India and Ghana?

What's the status of Hong Kong and New Territories?

 

[Nyvis]

Every time you make something require unanimity, you're in trouble.

 

[Rattigan]

It seem that the Lismore system is designed to pull countries together into groups, especially to pull bancor credits together. This might be to the benefit of the mother countries to try to retain influence during decolonization. But what about countries that are not in any groups? Either independent like Ethiopia or newly independent countries that leave the "union" like India and Ghana?

So what I would say about the Lismore system is that it encourages countries to take one of two paths: either trade balance (which was Keynes' ideal); or customs unions. The advantage of the latter is that it allows you, if you're export economy like TTL Pakistan, you can still be one. The disadvantage is that the resultant pooling of bancor credits limits your fiscal flexibility and, in practice, politically shackles you to the people who are importing your goods. Hence why the British were so keen to have the ability to pool like that and why the French are so anxious to make the French Union work (more on that later). But I don't think it's necessary to form something like the Commonwealth to thrive. So if you're, because you mentioned them, Ethiopia, you can still thrive and might probably do so better than OTL because you're now required to develop indigenous industry and business. At least, that's how I imagine Keynes (both OTL and TTL) would have wanted it to work.

What's the status of Hong Kong and New Territories?

As in OTL. The East Indies TTL are Singapore, Malacca, Penang and Labuan (although in the end that last one is assigned to Sarawak when they go fully independent). There was some discussion about whether to include Hong Kong in the federation but it's still a sore spot with China so it's been left as a Crown Colony for the time being.

 

[Nyvis]

So what I would say about the Lismore system is that it encourages countries to take one of two paths: either trade balance (which was Keynes' ideal); or customs unions. The advantage of the latter is that it allows you, if you're export economy like TTL Pakistan, you can still be one. The disadvantage is that the resultant pooling of bancor credits limits your fiscal flexibility and, in practice, politically shackles you to the people who are importing your goods. Hence why the British were so keen to have the ability to pool like that and why the French are so anxious to make the French Union work (more on that later). But I don't think it's necessary to form something like the Commonwealth to thrive. So if you're, because you mentioned them, Ethiopia, you can still thrive and might probably do so better than OTL because you're now required to develop indigenous industry and business. At least, that's how I imagine Keynes (both OTL and TTL) would have wanted it to work.

Yeah but trade balance is pretty hard when you have nothing.

All the economies that skyrocketed from the bottom seem to have done so through export economy of one sort or another. Mostly because their internal market isn't mature enough.

 

[Rattigan]

Yeah but trade balance is pretty hard when you have nothing.

All the economies that skyrocketed from the bottom seem to have done so through export economy of one sort or another. Mostly because their internal market isn't mature enough.

I think you're right: the system is definitely far from perfect. In particular, I think it would've caused big problems in Latin America for at least the first decade or so. It's worth remembering that it's not designed to ban international trade completely, just that countries are now encouraged to have a balance so you don't get a class of permanently indebted countries with extractive economies. So in the long term it will, I think, promote global economic stability or at least quaterise economic downturns to individual countries/customs unions.

 

[Nyvis]

I think you're right: the system is definitely far from perfect. In particular, I think it would've caused big problems in Latin America for at least the first decade or so. It's worth remembering that it's not designed to ban international trade completely, just that countries are now encouraged to have a balance so you don't get a class of permanently indebted countries with extractive economies. So in the long term it will, I think, promote global economic stability or at least quaterise economic downturns to individual countries/customs unions.

Yeah but it could also cause poor countries to just... Remain poor. They'll be poor with a neutral trade balance, but never pull themselves up. Within the capitalist framework, you kinda have to sell out if you're behind and need to grow your economy.

Of course, a simple exception for economic development help could solve the issue, but that would require someone being willing to send stuff to poor countries with no expectation of being able to milk them for it.

 

[Scerus]

Looks like South Africa is going the way of OTL, hopefully they are expelled from the Commonwealth.

 

[Rattigan]

Yeah but it could also cause poor countries to just... Remain poor. They'll be poor with a neutral trade balance, but never pull themselves up. Within the capitalist framework, you kinda have to sell out if you're behind and need to grow your economy.

Of course, a simple exception for economic development help could solve the issue, but that would require someone being willing to send stuff to poor countries with no expectation of being able to milk them for it.

The other potential side effect that I've been thinking about recently is that it might exacerbate the resource curse for some countries. So if you're, for example, Brunei, you can still get rich off exporting huge volumes of oil but at the price of importing pretty much everything else in order to retain a trade balance, thus killing off basically all of your other domestic industries and businesses.

 

[Salvador79]

While I am not convinced of the inevitabilities of these drawbacks of the Lismore System, they would, If true, only be another reason for the signatory powers to enforce it: it would protect them against cheap competition, thus keeping their broad Industrial base, and keep Petrol exporting countries just that. The US and UK are industrial Powers who IOTL had some Trouble adapting to competition, while the Soviet Union can boast the so-far single historical example of a country developing without export-oriented capitalism.