The last long decade before the outbreak of the First World War was a proving ground. It tested the extent to which the British had been able to adapt their superstructure of power and influence to the more strenuous global conditions that set in during the 1880s and 1890s and reached a further peak of intensity after 1900. The judgment of historians has been variable. The Edwardian decade has sometimes been seen as the ‘high noon’ of empire, the last hurrah of a self-confident imperialism. But, usually, the view has been sterner. Indeed, the more closely the Edwardians have been scrutinised, the more they seem prone to well-merited anxieties. Far from delivering a new security, their abandonment of ‘splendid isolation’ brought the uncertain liabilities of the Triple Entente and an uneasy dependence on Japan in East Asia. The cost of defending their naval supremacy was a furious arms race with Germany, and ended in a strategic withdrawal from the Mediterranean Sea. The Edwardian economy lost ground on productivity, and real incomes stagnated – one cause of large-scale industrial unrest in the last years of peace. The scale of mass poverty revealed by contemporary inquiry was an indictment of both ‘national efficiency’ and social justice. Domestic stability was threatened by fierce divisions over tariffs, taxation and the constitution. The revival of the Irish Question after 1910 highlighted the failure of parliamentary government to resolve the future of Ulster and raised the spectre of civil war in the British Isles.

The British Empire, wrote Adam Smith in 1776, ‘has hitherto been not an empire, but the project of an empire; not a gold mine but the project of a gold mine’. A hundred years later, his condemnation might have softened. But, viewed as a political or administrative entity, British imperialism remained just such a project: unfinished, untidy, a mass of contradictions, aspirations and anomalies. Defined as the exercise of sovereign power, or the unfettered enjoyment of imperial rule (the criteria still favoured by many historians), the British Empire in its heyday was largely a sham. Over much that was most commercially or strategically valuable, it could claim no authority; over much that was useless, its hold was complete. Of the half-dozen states whose loyalty was most vital to British world power in 1914, only one could be given direct orders from London.

Partly for this reason, I have preferred the term ‘British world-system’ to the conventional ‘Empire’. The term was given authority by the shrewdest historian of modern British imperialism. It is also meant to convey (the real theme of the book) that British imperialism was a global phenomenon; that its fortunes were governed by global conditions; and that its power in the world derived rather less from the assertion of imperial authority than from the fusing together of several disparate elements. Amid the colossal expansion of scholarly work on the history of empire, it has been easy to lose sight of the geopolitical facts on which its cohesion depended.

For more than a century after c.1840, the British Empire formed the core of a larger British ‘world-system’ managed from London. This book is a study of the rise, fortunes and fall of that system.

The British world-system was not a structure of global hegemony, holding in thrall the non-Western world. Except in particular places and at particular times, such hegemonic authority eluded all British leaders from Lord Palmerston to Churchill. But the British ‘system’ (a term that contemporaries sometimes made use of) was much more than a ‘formal’ territorial empire, and certainly global in span. It embraced an extraordinary range of constitutional, diplomatic, political, commercial and cultural relationships. It contained colonies of rule (including the huge ‘sub-empire’ of India), settlement colonies (mostly self-governing by the late nineteenth century), protectorates, condominia (like the Sudan), mandates (after 1920), naval and military fortresses (like Gibraltar and Malta), ‘occupations’ (like Egypt and Cyprus), treaty-ports and ‘concessions’ (Shanghai was the most famous), ‘informal’ colonies of commercial pre-eminence (like Argentina), ‘spheres of interference’ (a useful term coined by Sellars and Yeatman) like Iran, Afghanistan and the Persian Gulf, and (not least) a rebellious province at home. There was no agreed term for this far-flung conglomerate. This may have been why contemporaries sometimes found it convenient to fall back on that protean phrase ‘the Pax Britannica’ once it came into use after 1880, as if the ‘British Peace’ formed a geographical zone.

Until the mid-1920s, it had seemed as if the profound dislocation of economic and political life unleashed by the war would defeat all attempts to devise a new equilibrium. After 1925, the outlook improved. A new economic order took shape in Europe, underwritten by the flow of American investment. Franco-German reconciliation lifted the threat of a new European struggle. The impetus behind anti-colonial nationalism slackened off. The world economy recovered the vigour of its pre-war decade. The volume of trade surpassed the levels of 1913. As the age of extremes receded, liberalism and ‘moderation’ seemed in the ascendant. But it proved a false dawn. In October 1929, the Wall Street ‘crash’ signalled the return of economic uncertainty, followed soon after by the huge fall in commodity prices, the sharp contraction of trade, deep rural impoverishment and mass unemployment. The crisis of capitalism became the crisis of liberalism. The survival of nations and their internal stability demanded illiberal solutions: protection, autarky, or aggressive imperialism (to those with the means); a retreat to the land, exiguous self-sufficiency, or desperate rural rebellion to those without power. In culture, as in trade, free exchange was devalued in so hostile a climate. Utopianism, despair and nostalgia were its more typical products.

This massive upheaval in global conditions held huge implications for the British world-system. In the late 1920s, its liberal apologists had talked of a ‘third British Empire’, based not on rule but on the growth of cooperation and partnership in a world-spanning ‘Commonwealth’.

The most curious aspect of the British reaction to Suez, once the immediate drama had passed, was the mood of public indifference. There was no grand debate about Britain's place in the world, no official inquiry into what had gone wrong. Neither main party showed any desire to rake over the details, perhaps because even those most against Eden's policy realised how deeply the crisis had divided British public opinion. Instead, all sides seemed anxious to treat it as an unfortunate accident, or as Eden's personal tragedy, as if the whole episode could be laid at his door. A desire to avoid any further embarrassment, or perhaps some awareness of what an inquiry might reveal, may explain this response. But what seems even more curious is that, after such a defeat, British leaders still showed an extraordinary faith that, with its sails duly trimmed, Britain must remain a world power. For, despite the conventional view that they hastened to scuttle their remaining commitments and fall back upon Europe, the reverse was the case. The dream of a British world-system, updated and modernised, haunted Harold Macmillan, prime minister 1957–63. A less robust version, more anaemic and ethereal, bewitched Harold Wilson, who led the Labour government of 1964–70. The rapidity with which what remained of the Empire was wound up politically, far from being planned, was a painful surprise. Official opinion had intended a ‘managed’ withdrawal, with a ‘transfer of power’ to carefully chosen ‘moderates’.

In South Africa, the bond of empire was weaker and the strains on it much greater than in other colonies of settlement. The European whites were predominantly non-British; the indigenous blacks more numerous and resilient. The frontier wars of conquest lasted longer, were fought with greater ferocity and spread out over a whole sub-continent. For much of the nineteenth century, South Africa was viewed in London as a hybrid region: a composite of settler and ‘native’ states. Imperial policy veered unpredictably between a ‘Canadian’ solution of settler self-government and the ‘Indian’ solution of direct control – at least over the large zones where autonomous black communities survived. Partly as a result, on the white side certainly, the ‘Imperial Factor’ was regarded with profound mistrust.

South Africa was likely to be an awkward element in the imperial system at the best of times. The sub-continent was stuck in its own version of Catch-22. As long as the struggle between whites and blacks continued there could be no hope of devolving imperial authority to a settler government on the model of Canada, the Australian colonies or (most relevantly) New Zealand. The whites were too divided; and the blacks were too strong to be contained without the help of imperial troops. But every imperial effort to promote settler unity and impose a common policy towards black peoples and rulers roused fresh white animosity against London's ‘dictation’ – especially among the Afrikaner (or Boer) majority.

Amid the calamities that crashed over them in 1942, it was hardly surprising that British leaders, including Churchill, should have thought mainly in terms of survival. In the course of that year, they faced the prospect of defeat in the Middle East and the loss of Egypt and the Canal, a disaster which would have meant far greater losses than those incurred at Singapore. Without their main fighting force, their hope of keeping control over India – let alone of exploiting its resources and manpower – would have been fatally weakened. The Viceroy's ability to suppress the Quit India movement would not have been helped by the sight of the Germans in Cairo. At much the same time, they could only watch helplessly as the German advance into Russia threatened the collapse of the Soviet regime. A huge reordering of Eurasia seemed on the cards with the ‘world-island’ divided between the Nazi and Japanese empires. Preserving a maritime ‘rimland’ without the Middle East, India and Southeast Asia, and keeping Britain's connection with Australia and New Zealand, would have been all but impossible. The British world-system would have been a funeral pyre.

Of course, it was true that America's entry in December 1941 had brought massive relief and the assurance, perhaps, of survival in some form. In June 1942, the battle of Midway destroyed Japan's hopes of naval control of the Western Pacific.

In 1918, the British won an astonishing, almost fortuitous, victory, snatching an imperial triumph from what seemed, as late as June, the jaws of continental defeat. Their greatest imperial rivals had been broken, one (Russia) by the other (Germany). In the Armageddon of empires, British credit, domestic unity and imperial cohesion had been tested to the limit, but had survived. Of the three principal victor powers, the United States, France and Britain, the British seemed best placed to turn the making of peace to their advantage. They had made the largest territorial gains, in the Middle East, Africa and the Pacific and had most to bargain with. They had incurred heavy debts to the United States, but London's influence on post-war reconstruction was bound to be large, since it was from London that the European victor states had borrowed most. With their pre-war rivals in disarray, there seemed little danger that British authority would be challenged by colonial politicians – whose leverage had been cut down by peace – or client states, no longer able to play off two sides in the great game of imperial influence. Above all, perhaps, with the gravest threat to the balance of power in Europe extinguished by the defeat of the Central Powers, the British could hope to lower their naval guard (after the strain of the Anglo-German arms race) and ease the pre-war tensions over imperial defence created by their single-minded concentration on the North Sea.

At the beginning of 1937, Britain was the only global power with interests in every continent and, in theory, the means to defend them. The British system was a close approximation to a world empire. Its prestige had been dented by recent events, and its wealth diminished by depression. But no other great power could match its combination of military (mainly naval) and economic strength or its latent ability to coerce its enemies. The intimidating scale of its territorial extent, including its self-governing member states and colonial possessions, made it hard to imagine the ultimate defeat of such a global leviathan. Indeed, life outside the limits of empire seemed scarcely conceivable to the sturdiest nationalist – at least as a realistic prospect in the foreseeable future. In what was still an imperial world across much of Afro-Asia, there were few free places on the map.

But empires can disintegrate with astonishing speed. The collapse of the Soviet empire at the end of the 1980s took almost everyone by surprise, not least the school who had proclaimed the imminent decline of American power. In the British case, the change was almost as sudden. By the middle of 1942, Britain, the imperial centre, was effectively bankrupt and dependent upon American aid. With the fall of Singapore in February, the invasion of Burma, and the German advance into Egypt (the battle of Alamein was fought scarcely 100 miles from Cairo), the British system looked set to collapse.

An empire of influence

As the economic crisis unleashed by the Korean War and the strain of rearmament began to intensify, a new government came to power in London. It was headed by the indomitable Churchill, now seeking to crown his career by a summit conference with Stalin to end the Cold War – a plan regarded coldly in Washington and by his own Foreign Office. The Conservative party had won the election under a populist banner – ‘Set the people free!’ – that decried the bureaucratic austerity of the Labour regime. Rationing was indeed abandoned in 1954, and Labour's late nationalisation of the steel industry reversed. But there was no major departure from the domestic priorities of the previous government. Full employment remained at the centre of economic policy. The welfare state, its social corollary, was politically sacrosanct: indeed, one of its main Conservative architects, R. A. Butler, was Chancellor of the Exchequer from 1951 to 1955. The tax system was left much as it was. No great ideological shift separated the two phases of British post-war politics between 1945 and 1963, even if over particular issues (like the Suez crisis or entry into the Common Market) there was sometimes a wide gap between the two major parties.

In their approach to the management of British world power and what remained of Britain's world-system, Churchill and his colleagues displayed what might be called a limited pragmatism.

The longer war

1914 was the watershed between two ages of empire. In the long nineteenth century after 1815, the British world-system had developed as if there were no danger of a general war in Europe or across the world. Despite the Crimean War, the wars of Italian and German unification and the Franco-Prussian War, this had proved a reasonable assumption. The results can be seen from a glance at the map. Britain's settlements, possessions, spheres and commercial property were scattered broadcast across the globe. Whatever the constitutional niceties, in the ‘formal’ empire colonial rule was highly devolved: to settler politicians in the white dominions; to imperial officials in the rest. Devolution assumed that their defence would fall to the Royal Navy, or be made redundant by its global reach. The exception was India which paid for its own standing army and much more beside (two-thirds, in fact, of the Empire's regular army). Imperial rivalry was real, and posed a threat to Britain's interests. But the threat was usually more regional (and Near Eastern) than general. Much of its force was deflected by the partition diplomacy of the 1880s and 1890s. As a consequence, across large parts of the world, British influence could be maintained by the ‘soft power’ of commerce and culture. This had made possible the coexistence of imperialism and liberalism in Britain, in the settler colonies and even, more fitfully, in India.

After mercantilism

From the 1830s onwards, the Victorians gradually transformed their sprawling legacy of war and mercantilism into a world-system much of whose fabric survived into the late 1940s. Yet they did not do so to a conscious plan, nor under the influence of a master ideology. Victorian imperialists were drawn from different interests and classes. They were driven by motives that were at times contradictory. Rival visions of empire pulled them in different directions. Nor could they count on a source of irresistible power to carry them forward wherever they chose. British firepower and capital formed a limited stock for which, at any one time, there were competing demands. The scope for enlarging British influence or territory was not just a function of British wishes or needs. It also depended upon many factors and forces outside the control of – perhaps even unknown to – British interests and agents. Hence, much of their handiwork followed the law of unintended consequences. However clear-sighted the prophet, it would not have been easy to foresee the path followed by British expansion between 1830 and 1880. It would have been harder still to envisage the societies that it helped to create both overseas and at home in the British Isles. The imperial system that the Victorians made emerged by default not from design.

British rule in India had always been an awkward compromise between principle and practice. The early Victorians had declared that the purpose of the Company Raj was the political education of Indians and their preparation for eventual self-government. Fifty years on, progress towards this goal was barely perceptible. At the end of Company rule in 1858, the Queen's Proclamation had reassured Indians that race discrimination would play no part in the new colonial regime. But this was hard to square with the status of even educated Indians in the politics and social life of the late-Victorian Raj. The third contradiction was even more telling. The British had founded their rule on the promise of social and economic improvement: what the annual reports of the Indian government were to call ‘moral and material progress’. Yet, even at the end of the century, India remained prey to devastating famines, terrifying epidemics and contagious diseases whose sphere was widening not contracting. Literacy (even in local languages) remained (at around 10 per cent) embarrassingly low. But, while social progress seemed stalled, the Indian government spent more and more on the army, and especially on that part of it ‘borrowed’ from Britain. It was hardly surprising, then, that the terms of India's association with the British world-system became more controversial after 1880. But it was India's growing importance to the imperial system, as much as the grievances of its social elites, that shaped its late-Victorian and Edwardian politics.