This appeared last week and is worth
a careful read!
Australia’s safety in the 1930s depended on the global
project. It’s no different now
Once war
breaks out, the adversary is in the open; until then, hopes, fears and
hesitations blur the sight, cloud the understanding, muddy and obfuscate the
debate. That is the situation today.
Henry Ergas and Alex
McDermott
12:00 AM May
31, 2025.
The 80th
anniversary of Allied victory in Europe has recently passed with much
commemoration. Less discussed was the decade that led up to World War II – the
years WH Auden memorably described as a “low dishonest decade” when “Waves of
anger and fear/Circulate over the bright/And darkened lands of the earth”.
Fraught with
uncertainties, overshadowed by the seemingly inexorable rise of aggressive,
brutally authoritarian regimes, that decade forced the democracies to confront
entirely new problems. Their successes were paltry, their failures many. But
what is striking is the force with which the dilemmas they faced resonate
today.
The
difficulties Australian governments grappled with were no exception. At their
heart lay the fracturing of the British imperial system.
Whatever the
gains from having an empire might have been for Britain, tight integration into
“Greater Britain” provided Australia with far-reaching benefits. The country
had long relied on free markets for key export industries and ready access to
capital from the world’s biggest financial centre. The confusion and rockiness
of Britain in the years after the Great War, its shift away from the gold
standard in 1931, and the waning of its expansive, free-trade outlook, couldn’t
help but impact Australia.
The 1932
Ottawa Agreement had introduced “Imperial Preference”, giving the dominions
privileged access to the British market; but it had become increasingly clear
that growth opportunities in Britain were extremely limited.
Japan,
Australia’s second largest trading partner in the first half of the 1930s,
therefore assumed growing importance – raising mounting strategic concerns.
Compounding
those issues, Australia’s access to international capital had dwindled. That
was not simply because of the global financial crisis; its reputation as a
trustworthy borrower had been pummelled. Australian governments, federal but
especially state, amassed huge long-term debts during the 20s.
In 1930, as
the global crisis was taking its toll, Jim Scullin’s ALP government briefly
flirted with delaying debt repayment; soon after, NSW ALP premier Jack Lang
announced that interest payments to British bondholders would be suspended.
Although the resulting crisis led to Lang’s dismissal by NSW governor Sir
Philip Game, Australian governments’ ability to raise new loans virtually
disappeared.
Australia’s
position would have been even worse had it not been for Labor renegade Joe
Lyons who, filling in as ALP prime minister during Scullin’s absence in late
1930, defied caucus’s demand to effectively repudiate the federal loan
repayment. Instead, he led a public campaign to raise the funds by
subscription.
Lyons
subsequently left the government and the ALP, and formed a new party, the
United Australia Party, at the head of the enormous grassroots campaigns that
had sprung up in response to Lyons’s privileging of the national interest over
party loyalty.
“Honest Joe”
deployed his reputation for absolute probity and everyday decency to restore,
as best he could, Australia’s creditworthiness, in an ever more fearful, ever
more inward-looking world.
But Lyons was
particularly ill-equipped to deal with the dangers of a disintegrating world
order where predatory authoritarian powers (Imperial Japan, Fascist Italy, Nazi
Germany) sought to completely reconstitute the global system. He exhibited in
advanced degree both the horror of war that all his generation shared and the
pacificism born from the two anti-conscription campaigns.
The mass war
graves on the Western Front – which Lyons repeatedly visited on successive
trips to Britain – dominated, indeed haunted, his imagination.
He wasn’t
alone. Anti-conscription’s legacy of pacificism and antimilitarism permeated
the ALP. For the bulk of the interwar period the party opposed close links to
Britain for defence.
It also
opposed the development of any weapons with offensive capabilities (such as
cruisers), insisting that only short-range defence capacity – such as
submarines and air force – be developed.
The
contradictions at the heart of this attitude were apparent at the time. The
ALP’s approach mingled vehement hostility to Britain, the capitalist imperial
hegemon, with a naive assumption that Britain’s navy would always ensure that
the sea routes on which Australia depended would remain secure. Australia would
be protected from invasion by focusing almost entirely on aircraft.
Yet even this
policy could be articulated only from opposition. Had the ALP been in
government, any increase in defence expenditure would undoubtedly have
precipitated a backbench revolt.
It is, as a
result, ironic that the nation’s work in rebuilding its defences through the
1930s was driven by two Labor renegades, George Pearce and Billy Hughes, who
had left the ALP during the 1916 conscription crisis. While Lyons’s pacifist,
anti-militarist instincts ran deep, Pearce and Hughes were hard-headed
geo-strategic realists.
Pearce and
Hughes were crucial in driving the Lyons government’s commitment to begin
rearming, as it did in its 1933-34 estimates. That was before any substantial
economic recovery and before Britain belatedly began lifting its defence
spending in March 1935. By then, Australian defence expenditure was approaching
pre-Depression levels and by 1936 it represented a higher percentage of
national income and of federal outlays than in the pre-Depression decade.
Senator
Pearce, a carpenter from Western Australia who left school aged 11, served as
defence minister under practically every prime minister from Andrew Fisher in
1908 to Lyons in the 1930s. Described by high Tory British prime minister
Arthur Balfour as “the greatest natural statesman” he had ever met, Pearce
oversaw every major initiative of those decades: establishing Australia’s navy,
implementing mass citizen military training before World War I, the Great
War itself, the ambitious post-conflict demobilisation scheme in co-ordination
with General John Monash, designing the nation’s post-war defence scheme in the
20s and then engineering defence renewal in the 30s.
As for
Hughes, Australia’s pocket rocket prime minister in the Great War, the role he
played in the period was similar to Winston Churchill’s: completely immune to
the allure of disarmament that gripped the political classes and general
population, he repeatedly warned of the rapidly worsening military risks.
Claims that he was a warmonger past his use-by-date did nothing to deter him
from what he saw as his duty.
Hughes,
Pearce and (after the latter’s 1934 political exit) his replacement as defence
minister, Archdale Parkhill, were continuing a basic geostrategic awareness
that traced back to the global strategic vision of Alfred Deakin.
Deakin
returned from the first Imperial Conference in 1887, which had focused largely
on defence and Pacific security questions, describing the “armed camps” that
European nations had become. Faced with the threats that posed, he argued that
school students should be given compulsory military training – a measure
introduced shortly after Federation.
It was
Deakin, too, who initiated the Royal Australian Navy as an independent national
fleet. In 1907 he made the fundamental observation that still captures the
totality of Australia’s strategic existence: “Shut off access by sea to
Australia and the whole nation stops.”
Pearce echoed
this in 1933 when he pointed out: “If Australian markets were closed and her
imports and exports stopped by enemy action, she could be forced to sue for
peace without a single enemy soldier coming within sight of her shores.”
What Deakin,
Pearce and Parkhill understood was that Australia’s safety and independence
depended on the success of a wider global project: a globalism, built out of
free passage across the open seas of the world, which Australia had enjoyed for
the entirety of its post-1788 existence thanks solely to the Pax Britannica.
The sense of
vulnerability that dependence created took on new focus when Japan invaded
Chinese Manchuria in 1931. Despite crippling fiscal constraints, Japan’s
renewed aggressiveness helped convince the Lyons government to seriously shift
the dial on defence spending so far in advance of Britain itself. As for the
Admiralty’s assurances about the solidity of the new Singapore fortress that
the British had built slowly and reluctantly, they didn’t persuade successive
Australian leaders.
At the 1937
Imperial Conference Australia was the only dominion to actively probe the
question of imperial defence systems and insist on more detailed planning. But
the irreducible problem remained. Although Britain still had the largest and
most powerful navy in the world in every class of ship, the days when it could
comfortably outmatch the next two largest navies in the world combined had gone
forever.
Rather,
Britain’s one great fleet now had a two-ocean dilemma. As the First Sea Lord
had warned in April 1931: “The number of (our) capital ships is so reduced that
should the protection of our interests render it necessary to move our Fleet to
the East, insufficient vessels of this type could be left in Home waters to
insure the security of our trade and territory in the event of any dispute
arising with a European Power.”
The security
predicament was exacerbated by a dilemma with which today’s readers will be all
too familiar. Britain, the country’s security guarantor, was increasingly
estranged from Australia’s second largest (and still growing) trading partner,
Japan – which was also our greatest military threat in the Asia-Pacific region.
The Lyons
government’s Trade Diversion Policy of 1936, which sought to redirect trade
elsewhere, prioritised security over immediate economic gain; but it was loudly
criticised by the Australian stakeholders most directly affected, notably the
graziers, and in any event seemed ineffective.
In short,
Australian governments faced a perfect storm. The global system from which
Australia had derived such immense benefits was visibly collapsing. Taking its
place was a fragmented world in which the ability of our most powerful friend
to protect this country’s vital interests was being seriously challenged. And a
terrible choice had to be made between trade and security, between immediate
and deeply unpopular economic pain on the one hand and strengthening
Australia’s most formidable adversary on the other.
All this was
entirely novel, depriving the nation’s leaders of any usable past on which to
draw. As Churchill described it when reflecting on the dilemmas with which
Britain was then grappling: “The compass has been damaged; the charts are out
of date.”
An important
part of the answer was thought to lie in appeasement, which was not yet a
pejorative term. It was, on the contrary, well within what we could now call
the playbook of the Anglosphere’s elites: since at least the middle of the 19th
century, British leaders had relied on coming to terms with adversaries they
could not afford to fight.
As Paul
Kennedy concluded in his study of British foreign policy, those elites had a
long-established preference for “settling international quarrels by admitting
and satisfying grievances through rational negotiation and compromise”. They
had, for example, neutralised threats from France and Russia before World War I
by making deals over colonial territory. Now they were trying to apply the same
conciliatory approach to Adolf Hitler’s Germany.
In the
lead-up to the 1937 Imperial Conference Australia was therefore cabling Britain
urging more be done to better relations with Japan, perhaps along the lines of
the recent Anglo-Italian Pact. The nearly 20 papers issued to Australian
conference participants by External Affairs, recently established as a
stand-alone department, described the public campaign in Japan for a “southward
advance” policy of imperial expansion, with all the dangers that created for
Australia. But mindful of the fiscal constraints on Australian rearmament and
noting that the US remained “at heart isolationist”, the department advocated
rapprochement with Japan, if only to buy time before a seemingly inevitable
conflict.
That was
paralleled by an effort to extend Australia’s alliances. The dispatch in 1939
by the new Menzies government of Richard Casey to represent for the first time
distinctively Australian interests in Washington was especially important.
Accompanying it was a broad range of initiatives aimed at eliciting a firm
American commitment to Asia-Pacific security.
Those
initiatives bore fruit at the end of November 1941 when the Roosevelt
administration indicated it would commit armed forces to defend the
Asia-Pacific beyond its own immediate territorial interests. Franklin
Roosevelt’s chief foreign policy adviser, Under Secretary of State Sumner
Welles, confided to Casey that “we cannot allow ourselves to be cut off from
essential defence needs”, nor could the US let itself be reduced to “the
position of asking Japanese permission to trade in the Pacific”.
The
significance of this commitment didn’t take long to become apparent – a few
days later, Japan launched the Pacific War, pre-emptively attacking, among
other strategic positions, Pearl Harbor in Hawaii.
That hard-won
American pledge is the essential context for understanding John Curtin’s
actions as prime minister. Despite his own claims and Labor’s never-ending
hagiography, the reality is that Curtin benefited enormously from the fact his
party had been nowhere near power nor forced to take the critical decisions in
the lead-up to war. Crucial heavy lifting on Australia’s war-waging capacity
and global alliance-building was done by his predecessors; largely eliminated
from subsequent political narratives, they provided the basis for what Curtin
achieved.
Honae Cuffe
is therefore right to conclude, in her impressive study of the formation of
Australia’s Asia-Pacific policy, that as the global outlook darkened, trade,
diplomacy and defence were all pursued in an attempt to secure and maintain
Australia’s sovereignty.
Yes, there
were errors of appreciation, including Robert Menzies’ excessive faith in what
appeasing Germany might achieve – though Menzies was immeasurably more cautious
in that respect than the leadership of the ALP. But despite those shortcomings
(which were hardly Australia’s alone), the period saw, as Cuffe writes, “the
emergence of a lucid and opportunistic foreign policy in which policymakers
carefully assessed international developments, the strategies of the great
powers and the opportunities available to project the national interest”.
All that was
preparatory to an existential confrontation with the real choices of national
existence, choices we had largely managed to avoid before the full onset of the
Pacific War. It was this conflict, Paul Hasluck wrote in the war’s immediate
aftermath, that signalled the moment Australia “came to understand in more
brutal terms what its claim to nationhood meant and to meet the stark and
single issue of survival”.
The bedrock
problem in meeting that challenge was this: Australia did not just have to
depend on its allies for their military strength. However clear-sighted or
misty-eyed our perceptions of the situation might be, we were also dependent on
the acuity and coherence of our allies’ strategic vision.
British prime
minister Neville Chamberlain’s weaknesses in that respect are well-known, as
are those of his closest advisers. Historians’ recent attempts to cast him more
favourably than did the post-war consensus are not entirely groundless. But
they cannot erase the fact he continued to believe, even when every illusion
should have been shattered, that Hitler “was a man who could be relied upon
when he had given his word”.
Concessions,
Chamberlain thought, would strengthen the hands of “political moderates” in
Germany. Indeed, Eric Phipps, Britain’s ambassador to Germany from 1933 to
1936, suggested that Hitler was one of them, while his successor, Nevile
Henderson, was convinced Hermann Goering’s passion for hunting and fishing,
which gave him some kinship with the English aristocracy, meant he would
naturally tone down Hitler’s aggressiveness.
That belief,
that even brutally authoritarian regimes could be tempered by “moderates”, was
one of the period’s most disastrous convictions. Cabinet discussions were
replete with fatuous comparisons to Louis XIV or Napoleon. Faced time and again
with those claims, Ivan Maisky, the Soviet ambassador in London, could hardly
be blamed for concluding that “English gentlemen” (meaning Chamberlain and his
coterie) suffered from a “complete failure to grasp the psychology of such men
as Hitler and Mussolini” – and even more so to grasp what was new and
terrifying about them.
No matter how
ill-judged Chamberlain’s views may have been, they resonated with a public that
dreaded nothing more than another war. In 1933, a Labour candidate won a
by-election for the eminently safe Conservative seat of Fulham East by
campaigning entirely on a pacifist platform.
Four years
later Chamberlain’s predecessor as British prime minister, Stanley Baldwin, who
considered that defeat a political earthquake, still felt “a stronger pacifist
feeling running through this country than at any time since the War” – making
far-reaching rearmament politically impossible.
Roosevelt’s
vision was much clearer than Chamberlain’s. He was, however, far more tightly
hemmed in.
“The epidemic
of world lawlessness is spreading,” he warned in 1937. Americans should not
imagine that “this Western Hemisphere will not be attacked and that it will
continue tranquilly and peacefully to carry on the ethics and the arts of
civilisation”.
However, a
Gallup poll gauging the public reaction to his speech found that 60 per cent of
voters wanted congress to pass even more stringent measures barring US
involvement in a new war.
Stung by the
resulting congressional blowback, Roosevelt bitterly complained to his
speechwriter: “It’s a terrible thing to look over your shoulder when you are
trying to lead – and find no one there.”
Of course,
none of that stopped Roosevelt, who redoubled his efforts after Munich: “There
can be no peace,” he said, in a radio address immediately after Hitler got his
way, “if the reign of law is replaced by a recurrent sanctification of sheer
force.”
Equally,
Hughes warned a uniformly hostile House of Representatives that Chamberlain’s
Munich deal, which had been met in Australia, as elsewhere, with unanimous
jubilation, actually changed nothing: “The danger is still there. In a little
while the clouds will gather again.”
And more than
anyone else Churchill remorselessly continued the fight against the defeatists,
eventually toppling Chamberlain.
Unfortunately,
by the time Churchill and Roosevelt were firmly in control the opportunity to
readily stem the dictators had been squandered – and millions of lives that
could have been saved were gone with it.
It would be
all too easy to draw from the 30s an isolationist conclusion. After all, it was
obvious that Britain’s naval predominance was waning. Given that, shouldn’t
Australia have built an infinitude of aircraft to defend the immediate
shoreline? But as satisfying as it might feel, then as now, to focus solely on
territorial defence, that is little better than an elaborate exercise in
reality denial.
The real
lesson, which Menzies, Hasluck and others showed in their subsequent decades’
overview of Australian defence, is that Australia’s defence inevitably lies in
the world. As Australia can be cut off and defeated without an enemy touching
the coastline, so too must the defence be forward. And that defence is only
feasible if it is conducted in vigorous alliance with others.
To expect
those alliances to be easy to maintain or always harmonious would be foolish.
Allies’ interests – and, no less ominously, their perceptions – differ and we
lack the sway to impose our own. Strategists talk of the “fog of war”; but few
fogs are thicker than the fog of peace, when the shape of future conflicts is
wrapped in the mists, creating uncertainties about when, where and how they
will unfold. Once war breaks out, the adversary is in the open; until then,
hopes, fears and hesitations blur the sight, cloud the understanding, muddy and
obfuscate the debate.
That is the
situation today. With a recently
released report decrying our “paper ADF”, we seem to be witnessing, as
Auden did so many years ago, “the clever hopes expire” midway through our own
“low, dishonest decade”. Whether our leaders have the vision to recognise and
the courage to confront that grim reality will determine our future.
Here is the link:
https://www.theaustralian.com.au/inquirer/australias-safety-in-the-1930s-depended-on-the-global-project-its-no-different-now/news-story/2a6de650c3d6429abe44bd00b193a568
I suspect it is much too long since
Australia has faced a real strategic threat but I fear that time is returning
and that we are really not prepared for the changing realities
My feeling is that we need a little
more actual investment and preparation for a world that may very well turn
overtly hostile in the next decade. We have had it too good for too long and I
fear “the times are changing” and not for the better.
I wonder what others feel about the
outlook over the next decade or so. I would be surely improving our domestic
drug manufacture and supply capabilities to address our worrying weaknesses! For
one suggestion!
The bottom line is I feel the world
is becoming more dangerous and less secure in all sorts of ways and we need to step up, as a nation, to meet the
emerging threat(s).
David.
