#42 - The "special relationship" - a partnership in imperialist crime.

Jan 1999


Whether under Thatcher, Major or Blair in Downing Street - and Reagan, Bush or Clinton in the White House - the so-called "special relationship" between the British and American governments has permeated almost every aspect of British foreign policy. This was true of the peace process in Northern Ireland, the question of European integration, the attitude adopted with regard to the on-going crisis in what remains of the former Yugoslavia, the reshaping of Sub-Saharan Africa and, of course, the Gulf crisis - to mention only the main issues of the past decade. More recently, last December, the fact that the British government stood out as the only military partner in Clinton's latest bombing campaign against Iraq was another example of this "special relationship".

This relationship is not, of course, a question of "natural affinity" - linguistic, cultural or otherwise - as politicians and journalists assert every so often. It is primarily a relationship of convenience between British and US imperialism, which was developed over the past decades in order to maintain the imperialist order as a whole on the one hand, while defending the specific interests of the two bourgeoisies on the other.

This relationship is a very unequal alliance, of course, given the hugely disproportionate resources of the two bourgeoisies, so that the British dwarf almost invariably appears as the "poodle" of the US giant. But living in the shadow of US imperialism has allowed the ageing British capitalist class to cling to some remnants of its past grandeur and protect its interests against the appetite of more aggressive and dynamic rivals among the lesser imperialisms - Japanese and European. Grabbing the crumbs left over for them by American conglomerates has become a way of life for many British multinationals, and the source of considerable income for their City shareholders.

On the other hand, living in the shadow of American capital comes at a cost for the British capitalist class as the particular interests of the two bourgeoisies do not always coincide. Regardless of the "special relationship", they remain direct competitors when it comes to reaping profit on the world market and plundering the planet's poor countries. Most of the time their rivalry remains hidden behind the appearance of a coalition based on a common purpose and policy. However, every now and then, tensions between the two partners in crime come to the fore, exposing the contradictory nature of their "special relationship", but without putting it into question, so far at least.

Kuwait, Iraq and the imperialist order

On all these accounts, the Iraqi conflict, which has been going on now for over eight years - since Saddam Hussein's troops invaded Kuwait on 2nd August 1990 - provides a graphic illustration of the nature of the "special relationship" and how it fits in with the overall defence of the imperialist world order.

Following Iraq's invasion of Kuwait, the Western coalition spent six and a half months building up military forces in the Gulf. They then proceeded to carpet bomb Iraq for five weeks, finally moving ground troops into Kuwait and Southern Iraq prior to the ceasefire signed in Baghdad in April 1991. The Gulf War was the largest military operation since the Vietnam War, and involved more countries than any conflict since World War ll.

But neither the 100,000 killed in the Gulf War itself, nor the resulting virtual destruction of the Iraqi economy, were considered drastic enough punishment for Saddam's short-lived threat to the interests of the powerful Western oil companies based in Kuwait. During the following years, additional air strikes were carried out against Iraq, each time with the aim of reasserting the fact that Iraq had been defeated for good. And all along, the rebuilding of the Iraqi economy was prevented by a blockade, with catastrophic consequences for the population, and particularly for its poorest layers.

There was neither economic nor military necessity in this policy. If, in 1990, Saddam Hussein's regime threatened the profits of a handful of Western oil majors, it was to improve its bargaining position at a time when the Iraqi economy was on its knees. After the destruction caused by Iraq's 1980-88 war against Iran, the Iraqi economy was crippled by the fall in oil prices on the world market and the Kuwaiti rulers pushed prices even further down in order to increase their sales. Saddam's aim was certainly not to put into question the oil majors' monopoly over the world's oil industry. In fact, the Iraqi regime needed the majors to buy its oil much more than the majors needed the existence of an independent Kuwait.

Nor has Saddam's regime ever been the military threat portrayed here by the media - neither before, nor, of course, since the Gulf War. Leaving aside the scaremongering campaigns about Iraq's so-called "weapons of mass destruction", why should Saddam have sought war with the West? Why would he have taken the risk of losing the lucrative position of being imperialism's favourite partner in the region - a position which he had held for the previous ten years? On the contrary, it was because of this position and his overestimation of the gratitude he could expect from imperialism, that Saddam felt that he would be allowed to get away with invading Kuwait.

For imperialism, Iraq's invasion of Kuwait was a pretext. In other parts of the world and in different contexts, other "friends" of imperialism were allowed to get away with similar "infringements of international law" without Washington or London batting an eyelid - for instance the Indonesian dictator Suharto, when he invaded East Timor in 1975. But Iraq raised different problems for the imperialist powers and they chose to draw the line there.

What was (and remains) at stake was indeed the balance of forces in the Middle East and, therefore, its stability. This region was both strategic from the point of view of the energy requirements of the rich countries and a political minefield, with a host of potentially explosive situations - that of the Palestinians and the Kurdish being the most prominent among these but not the only ones. There was no way the imperialist powers could allow regional strong men to tinker with existing national borders, at the risk of upsetting the fragile stability of the region and, therefore, their economic interests.

On the other hand, imperialism needed strong men to police the region's population, and Saddam Hussein had served this purpose well for a whole decade. His bloody eight-year war against an Iranian regime which had dared to topple the Shah's pro-western monarchy, was welcomed by imperialism because it could only weaken the Iranian leaders, and possibly result in their removal from power. But by 1990, Western governments felt that this strong man had become too big for his boots. With the powerful military machine he had been able to build during the Iran-Iraq war, mostly thanks to Western arms merchants, Saddam had become too strong to remain flexible enough.

So the invasion of Kuwait provided the pretext for a show of strength by imperialism. It was not dictated by short-term economic or military objectives, since under diplomatic pressure Saddam had already agreed to withdraw from Kuwait, but solely by political aims. On a regional level the aim was primarily to weaken Saddam's power against his neighbours, but without destroying it, while justifying an increase of the West's military presence in the region on a permanent basis. But on a broader level, it was to issue a bloody warning to the Third World as a whole - that anyone, any government or any people, standing in the way of the rich powers would take the risk of forfeiting decades of slow and painful economic development and being pushed back into utter deprivation. The world's poor countries had to be convinced that the cost of confronting the will and interests of the rich countries would be just too high for them.

More than eight years on, the imperialist leaders' aims behind the crazy saga of the UN weapons inspectors, the latest US bombing campaign against Iraq, last December, or the regular launching of missiles by US planes over Iraq, are still the same. The only difference, compared to the days of the Gulf War, is that the USA have now dispensed with the thin veneer of legitimacy previously provided by the United Nations. They are the sole arbiter in the region and to retain this position, they take upon themselves the task of enforcing the imperialist world order using their own resources.

British capital and the Gulf

The policy of British governments in the Iraqi conflict has increasingly stood out over the years. While all the rich countries have been, and are still, unanimous in their condemnation of Saddam's feeble resistance to US diktats, all of them, with the exception of Britain, have been increasingly reluctant to participate in Washington's military ventures. Frankfurt and Paris have signalled on several occasions that the time had come to reach a negotiated settlement of the Iraqi crisis so that business with this very significant trading partner could be resumed. Only British governments have shown uncompromising and active support for the hard line adopted by the US leaders.

On the other hand, London's military support for Washington is often symbolic - when it is not purely verbal - although this does not make the missiles and bombs launched by the dozen or so Tornadoes involved in last December's bombings any less lethal for the Iraqi population than the much more numerous US equivalents. By now, in any case, the sole purpose of London's support seems to be to prevent the USA from being left totally on its own - which resulted in Blair being accused, in December, of acting as Clinton's "lapdog".

For the British bourgeoisie, however, there were particular reasons to favour a hard line against Saddam Hussein. Indeed, the invasion of Kuwait affected British capital more than any other, since it put into question a status quo which had given British companies the edge over their rivals for decades.

Kuwait was a former British protectorate, which had been carved out of Iraq artificially, because of its oil resources and deep-sea harbour. Between the time of Iraq's independence, in 1932, and that of Kuwait, in 1961, Kuwait existed, to all intents and purposes, as a joint venture between the Royal Navy and the largest British oil company, the forerunner of BP. In 1961, the Royal Navy left, but BP stayed on as the dominant oil major in Kuwait. Then came the early 70s and the sudden increase of oil prices. Thereafter the enormous oil income of Kuwait's ruling Al-Sabah family quite naturally flowed into the City of London, thereby providing a regular income to British bankers and brokers. The Al-Sabah's investment arm, the Kuwaiti Investment Office, became one of the main players in the City, and a prominent shareholder in some of Britain's largest companies, including the then Midland Bank (now HSBC) and, of course, BP itself. And while British companies were forced to give more and more ground to their US and European rivals in the Middle-East, specially in the lucrative fields of military procurement and construction, by the time the Iraqi conflict broke out, Kuwait was still British capital's last outpost in the region.

So, in addition to the general reasons that all imperialist countries had to join in with the US in the Gulf War, Britain had a specific one - to protect, as much as possible, its dominant position in Kuwait, not against Saddam Hussein but against rival imperialisms. And its only possible ally in this attempt was the US, since the American leaders would be presiding over the final settlement.

On the other hand, American companies were waiting on the sidelines to cash in on the dividends of Washington's policy. And, of course, the US leaders could be trusted to give these companies the best of the spoils, including at the expense of their British rivals. This was already visible during the military build-up prior to the Gulf War when Saudi Arabia signed a £12bn order for US tanks while at the same time cancelling an order for a further 48 Tornadoes from Britain. Later on, in the aftermath of the war, the Kuwaiti Investment Office moved to the premises of the World Bank, in Washington, where all reconstruction contracts were negotiated. Needless to say US companies won the lion's share of these contracts, while British construction and engineering firms had to be content with the crumbs. Furthermore, since then, the Kuwaiti Investment Office has moved a large part of its financial activity to New York, to the great benefit of Wall Street banks.

In the end, therefore, despite supporting Washington until the bitter end in the Gulf, British imperialism has lost out to its US rival. But there was very little British governments could do about this anyway, once the US leaders had decided to move against Iraq. In that sense Blair's - or Thatcher's, for that matter - "lapdog" policy reflects the weakness of British imperialism in front of its US rival. On the other hand, by adopting this "lapdog" policy, British capital hoped that this would give it a larger share of the remaining spoils, thereby minimising its losses. And this is the real content of the "special relationship" between British and US imperialism, in the context of Iraqi crisis.

Born out of World War II

The Anglo-American "special relationship" is, therefore, an unequal alliance between two imperialist thieves, each bent on defending its own interests against everybody else, including at times against his own chosen partner in crime. This alliance came out of the repartitioning of the world market between the main imperialist powers during and after World War II.

World War I had already established the USA as the world's largest industrial power. However, thanks to its colonial empire and virtual monopoly of many raw materials, Britain had still more or less retained its leading position in finance and trade. In the competition for the domination of the world market, the US and Britain were the two main contenders, followed far behind by France, and even further behind by Germany and Italy, which both lacked significant colonial backyards. However, as the drastic reduction of the world market caused by the Depression of the 1930s intensified the competition between rival imperialisms, the march toward another world war and repartitioning of the world market began.

The alliances in this coming war were not written in stone. In any case certainly not along the "democracy versus fascism" divide, which became the official line later on. The colonial powers - Britain and France - had every reason to seek a compromise, even if this meant granting Hitler control over most of Central Europe and possibly more. In Britain, this resulted in the Foreign Office discussing a possible repartitioning of colonial Africa with Germany - of course not to give away British or French colonies but to propose a German takeover of those of Belgium or Portugal. But the German bourgeoisie wanted more than that - a real stake in the oil fields of the Middle East for a start, proper access to the British empire and so on.

The American bourgeoisie, on the other hand, was prepared to wait and see. Underneath the dominant "isolationalist" doctrine was the memory of World War I, when Europe's soldiers had pulled the chestnuts out of the fire for the benefit of US companies. Because despite its late involvement, the USA had emerged as the major beneficiary of this war. Initially US business had made huge profits by selling goods to both camps while their European rivals were being sidelined by the war. Then US troops had been sent in to ensure that the US bourgeoisie would be in a strategic bargaining position in the final settlement.

In 1939, the US "isolationists" merely aimed at repeating the same winning game. But for them there was no question as to the necessity for the US to intervene militarily at some point in order to oversee the sharing of the spoils. The only question was which side to choose.

Ultimately, the subsequent events determined the alliances. For military as well as political reasons, Hitler chose not to overstretch his forces and made no serious attempt at invading Britain. But the occupation of most of continental Europe meant an enormous boost for the German industrial machine. In the long term, this also meant German control over the majority of Africa and part of the Middle East, thanks to the French and Belgian spheres of influence, while the Japanese bourgeoisie was busy turning China and the whole of South East Asia into their backyard. The successful emergence of such formidable rivals would have made the USA's ambition to become the world's leading power unachievable.

So once Europe was under Hitler's control, the US bourgeoisie's choice was made - to reduce Germany at all costs. When they were to step in was only a tactical matter. The USSR's entry into the war, in June 1941, gave the US leaders the military advantage they needed. Then, in December, the bombing of Pearl Harbour by the Japanese gave them a political pretext to impose the war effort on a reluctant American population.

As to the British bourgeoisie, its main problem was to retain its empire. Despite Churchill's rhetoric, there was always a part of the British establishment which was in favour of seeking an early separate peace with Hitler. However, even a separate peace, if it was to be favourable to the interests of British capital, required a sustained war effort - not so much in Britain itself, but in the Middle East where the British sphere of influence had to be defended against a simultaneous attack by German and Italian troops. Yet Britain's industry and finances were much too weak to sustain such a war effort, even with the additional resources squeezed from the colonial empire - only the USA had the economic leverage required.

This was the basis on which the Anglo-American alliance was built - a contradictory alliance between an ageing bourgeoisie, which was fighting to retain its imperialist status by hanging on to its old colonial empire, and its main rival, a rising bourgeoisie which was seeking to become the world's leading power, inevitably at the expense of all the old colonial empires.

So, for most of the year 1941, between the adoption of the US Lend-Lease Act in March - which gave Britain an open line of credit to import a wide range of US goods and weapons - and the USA's entry into the war in December, the British leaders acted as the semi-covert agents of US interests in the conflict, in order to preserve those of British capital. Of course, this did not prevent US companies from doing business with Germany, until the very last minute, and in some cases even after.

The US aid came at a price, of course. In exchange for the lend-lease system, the British government had to allow the country's exchange reserves and exports to be scrutinised by US inspectors. Many British assets abroad, specially in North and South America, had to be sold first, at bargain basement prices, before the US authorities would grant further credit. Export capacities had to be reduced to avoid "unfriendly" competition with similar US goods, etc...

In fact, it was during this period that the US authorities spelled out their long-term demands. They wanted US goods to be granted free access to the British and imperial markets and US companies to have access to the empire's raw materials. Moreover, they wanted the Sterling Area to be dismantled, at least in its present form. Since the Sterling Area, whose member countries used the pound as a common trading and reserve currency, was in effect the very basis of Britain's finances, this amounted to a demand that British capital should renounce its past financial prominence.

On the other hand, if the USA exacted a high price from Britain - that is mostly from British working people rather than the wealthy classes - the British bourgeoisie exacted an even higher price from the countries within its sphere of influence. While Washington forced London to keep its dollar and gold reserves below a certain level, London just took all the gold and dollars available across the empire and associated countries. These compulsory loans to the British Treasury known as "Sterling balances", increased to reach seven times Britain's total currency reserves by 1945. Needless to say, only a small fraction of these loans was actually paid back.

In the case of Canada, Australia and New Zealand, however, the British government was unable to prevent the US bourgeoisie from making inroads into its backyard. Regardless of London's views on the matter, all three granted US companies economic advantages in exchange for a guarantee of military protection by the American fleet. The "special relationship" with US imperialism was therefore already bearing unwanted fruit by causing the first major cracks in the British sphere of influence!

The war had devastating economic consequences in Britain. But in the USA, it resulted in formidable industrial growth. By 1944, US overall armament production was six times that of Britain - when it had been just about equal only two years before. And yet US output in non-armament sectors continued to grow, allowing US companies to capture many markets formally controlled by the European bourgeoisie. Whereas Britain's industry was virtually overwhelmed by the requirements of arms production and its other exports were just about half of their pre-war level.

By the end of the war it was reckoned that the USA held at least half the world's wealth. By contrast, Britain had lost about one quarter of its pre-war wealth and had become, by far, the world's largest debtor - in fact the British state was virtually bankrupt. But the British bourgeoisie still had its empire, or so it hoped.

Policing the postwar order

At the end of the war, the US bourgeoisie wasted no time in implementing their objectives. The Bretton Woods conference, in July 1944, overthrew the pound as the world's leading currency. A new system was agreed by the participating industrial countries whereby a vastly overvalued dollar would become the world's reserve currency, with all other currencies being required to stick closely to a fixed exchange rate against the dollar. This ensured that investing abroad would be cheap for US companies, thereby giving them a virtual monopoly over foreign investment for the foreseeable future, while the US Treasury would be able to print more or less as much money as it wanted without having to worry about inflation.

Politically, however, the relationship of forces between the US and British allies, and therefore the content of the postwar settlement, was to be determined ultimately by their respective military strength on the ground. And of course, overall this was overwhelmingly in favour of the US bourgeoisie. Moreover, sustaining a significant British military presence in Europe, the Middle East, South East Asia and parts of Africa was impossible without «a greater degree of austerity.. than we have experienced at any time during the war» according to a report circulated by JM Keynes, then a governor of the Bank of England. In this sphere as well, the end of the war increased rather than decreased the dependence of the British bourgeoisie on its American rival.

Fortunately for British capital, the US leaders were confronted with political problems that they could not resolve entirely with their own resources. The memories of the revolutionary wave after World War I in Europe were still vivid enough to scare the US bourgeoisie. It was these fears which had prompted the terrorist bombings of Germany's largest working class centres in the last two years of the war and the dropping of two atomic bombs over Japan. And in Eastern Europe, the US leaders knew that they could rely on Stalin's repressive machinery to crush any revolutionary threat. But they still did not feel confident enough to take any chances in Western and Southern Europe, nor in Japan for that matter. So a large part of the US military resources had to be devoted to occupying the so-called "liberated" industrialised countries as well as the defeated powers, in order to maintain order among the proletarian masses there and oversee the return to political stability.

Nor was this threat considered as solely limited to the rich countries. In the Far East, the defeat of the colonial powers at the hands of Japan had been a major boost for nationalist movements. In China, Indonesia, Indochina, Malaya, among others, radical nationalist movements based on large sections of the poor populations held the upper hand. Likewise the nationalist ferment was rife in the Middle East thanks to the power vacuum created by the war. And although these nationalist movements were respectful of capitalism, the mere fact that they claimed a larger share of their countries' wealth for the local bourgeoisie was in itself an intolerable threat for the future profits of imperialist companies. So they had to be contained.

Effectively, the US leaders were confronted with the task of policing physically more than half of the planet. The US army on its own could not fulfill this role, all the more so as, in the Far East in particular, militancy was growing among US soldiers who wanted to go back home. This situation led Washington to change tack with regard to the old colonial powers. Instead of being instructed to loosen their control over their empires, they were invited, for the time being at least, to resume and tighten their policing of colonial peoples. So France and Belgium sent most of their meagre troops to Africa while Holland sent theirs to Indonesia, and Britain was able to set foot again in the lost parts of its empire with US approval.

This left the British army, with its colonial adjuncts, as the only sizeable military force capable of backing up the US efforts to police the rest of the world, in addition to taking care of its own colonies. And the US bourgeoisie was willing to pay for this help. Although the lend-lease system was terminated immediately after Japan's surrender, Britain's lend-lease debts were virtually cancelled and a large loan was made available to the British Treasury, equivalent to about three quarters of Britain's annual imports.

As a result, British troops were able to do some of the dirty work of the postwar imperialist order in Europe. Greece was the most dramatic case of British policing in Europe. In 1944, British troops moved in, in the wake of the retreating German army. They were faced with a large popular urban uprising led by the Communist Party, which they dutifully crushed in blood with the help of the Greek army cadre which had remained in place throughout the Nazi occupation of the country. Thus the pre-war Greek monarchy, which had been closely associated with Mussolini's fascist regime in Italy, was allowed back into power thanks to the heavy weapons of the so-called "democratic" camp.

However, this first defeat was not the end of the uprising. Under the leadership of communist activists, a partisan army was formed in the north of Greece. This time, the task was beyond the means of the British army. In February 1947, London warned Washington that British troops were unable to cope with the situation in Greece and would have to be recalled from Greece and Turkey. This led to the so-called "Truman doctrine", which involved direct aid in finance and military equipment to help «free peoples who are resisting attempted subjugation by armed minorities or by outside pressures» - in other words to come to the rescue of dictatorship threatened, like the Greek monarchy, by a popular revolt. An aid package to Greece was quickly set up which amounted to around $1bn over the succeeding three years and British troops remained as America's "mercenaries" until the partisans had been defeated, at the cost of over 150,000 dead among the population.

As it turned out, the reward for having done this filthy job in Greece was disappointing for British capital. After the thousands of tons of US military equipment which were poured into the country (including napalm which played a major role in decimating the partisans), the major foreign investors allowed in after the defeat of the uprising were not brand names from the City of London but companies like Exxon, Dow Chemical, Chrysler, etc.. And in 1953, following a military pact between Washington and Athens, Greece became officially part of the US backyard in the Mediterranean. In exchange, however, Britain was allowed to retain its foothold in Cyprus.

Meanwhile, in another part of the world, in the former Dutch colony of Indonesia, the British bourgeoisie suffered a similar misadventure. Under the US Supreme Commander's General Order No 1, the Japanese were to surrender to the British South East Asia Command led by Lord Mountbatten. But before this had been achieved, Indonesian nationalists had declared the country a republic under the presidency of Sukarno. The role of the British then became one of hanging on until they were relieved by Dutch forces, which proved incapable of defeating the nationalist forces. Finally, in 1949, the US government stepped in to preside over a negotiated settlement which recognised Sukarno's regime. Thereafter, Shell and Unilever, the large Anglo-Dutch conglomerates, which so far had dominated Indonesian raw materials, had to share the spoils with a host of US companies. Once again, the lesser imperialisms, including Britain, had pulled the chestnuts out of the fire for US capital.

The Cold War killing fields

The Truman doctrine marked the beginning of the Cold War and the "special relationship" followed suit. Once the risk of a postwar backlash seemed over in Western Europe and order had been restored in Eastern Europe thanks to Stalin's help, the imperialist camp resumed its offensive against the Soviet camp.

Not that there was anything for imperialism to fear on that side. Stalin was still desperately seeking to establish a lasting status quo with imperialism. But creating the bogeyman of a so-called "Communist threat" for the benefit of Western public opinion was a convenient way for the leaders of imperialism both to step up their pressure on the Soviet Union and to justify military ventures in defence of their imperialist order against nationalist currents in the Third World. Thus, in Britain, the same Labour leaders who had celebrated the Anglo-Soviet "friendship" for so many years turned into rabid anti-communists.

The first of these Cold War ventures was the 3-year Korean war, which began in June 1950. Since the collapse of Japan, this former Japanese colony had been partitioned in two by US strategists. The Northern part had been left to a coalition of nationalist groups including the Korean Communist Party while the South had been occupied by US troops and power handed over to an anti-communist party, which had been formed during the Japanese occupation to represent the interests of the wealthy classes. This led to an uprising in the South, brutally repressed by US troops. Following the collapse of the underground opposition in the South, the US staged a provocation against the North in order to get the UN to endorse a military expedition under the pretext of "fighting a Communist threat". The British government immediately obliged by sending the second-largest contingent of troops to join a sixteen-nation intervention.

However, Mao Tse Tung chose to intervene militarily on the side of the North Koreans. On this occasion, the British government was caught in a dilemma, because of its "special relationship" with the USA on the one hand and the immediate interests of its empire on the other. A section of the US military establishment, led by the regional Commander-in-Chief, McArthur, was known to favour a direct confrontation with the new Chinese government. This did not suit British business at all. Such a confrontation would have immediately threatened the very existence of Hong-Kong, Britain's semi-official trading post with China, which Mao Tse Tung had so far been careful to protect against the nationalist enthusiasm of his own troops. As it happened, the US military failed to convince Washington. But in weighing the odds, the British government chose to risk the survival of Hong-Kong rather than to jeopardise its "special relationship" with US imperialism.

However, in the following decade, when the USA embarked on its next major Cold War venture - the Vietnam war - the British bourgeoisie was no longer in a position to offer any real military aid. The British economy was in dire straits; British forces were facing various regional problems in what was left of the British empire, and ultimately it would have been difficult to convince the British public that there was any justification for risking the lives of soldiers in a country which had not even the slightest historic tie with Britain.

Enforcing the imperialist order in the empire

In the early 50s, the question of the old colonial empires was still not entirely resolved, particularly in Asia, where Indochina, Burma and Malaysia were still controlled by nationalist guerilla forces. In all these countries, one of the paradoxical consequences of imperialism's new Cold War policy had been to boost the profile of the Communist parties and push bourgeois nationalist movements into the fold of the Soviet Union, in the hope of getting at least some military help from that quarter.

In any case, the balance of forces on the ground meant that the US bourgeoisie had no choice but to suspend once again its demand for access to the natural resources and markets of these former colonies. The most urgent task was for imperialism to resume control. The question of the relationship between these countries and the world market would come later, in due time. Such was the background to the so-called "Malaysian emergency", which despite its name was a genuine colonial war.

After India, Malaysia was the biggest source of profits (and dollars) in the British empire, thanks to its being one of the world's leading producers of rubber, tin and several other metals. Since Japanese troops had left, the country had been the scene of a continuous wave of strikes in all the main industries - the docks, transport, electricity, the mines and the rubber plantations. By August 1947, British planters were telling London that they could no longer control their workers and that as a result they could not guarantee that rubber production would continue. The repression was scaled up and shooting incidents in the plantations became daily events. But the wave of resistance did not abate. In May 1948, all the rubber estates in the colony were at a standstill. Eventually, in June 1948, on the pretext that three white foremen had been killed in a riot, (but how many hundreds of strikers had been killed by the British army since 1945?) the British authorities declared a state emergency in the whole colony.

The leading force in this working-class protest was the Malaysian Communist Party. It was immediately singled out and driven to armed guerilla warfare for survival, while its members and supporters were branded Communist "terrorists" in London's propaganda.

By the end of 1948, the only year for which official figures were published, over 6000 people were in jail without charge or conviction. Within two years there were 130,000 British soldiers operating in the colony, to implement the massive resettlement of half-a-million mainly Chinese farmhands and labourers into so-called "New Villages", in other words barbed-wire military-controlled camps. This new policy met with such a hostile response that the following year, in 1951, faced with a full-blown uprising, Britain shipped in even more troops, bringing the total to 380,000, over three times the number that had been mobilised to oppose the Japanese armies in 1942! And this was in addition to a police force which included 73,000 full-time officers and no less than a quarter of a million part-time auxiliaries, all in a country where the population numbered only around six million! Between 1948 and 1953, the RAF made no less than 4,500 bombing raids, without the number of casualties ever being officially disclosed. What did become official, however, was the policy of starving out the guerilla jungle camps before "exterminating" them - the word used by the British High Commissioner.

This enormous military might, whose only purpose in the last analysis was to defend the interests of a handful of British mining and rubber companies together with those of a dollar-hungry Exchequer, eventually managed to overwhelm the resistance of the Malaysian Communist-led forces. However, the "Emergency" remained in force until 1960 when it was finally ended, three years after the setting up of an independent Malaysian constitutional monarchy entirely manufactured by British colonial strategists.

US imperialism applauded Britain's dirty war in Malaysia in the name of "the fight against communism for democracy". There were also spin-offs for the US military, such as full-scale experiments with chemicals, defoliants and crop destroyers, which were to be used later in Vietnam. Likewise, in the 1960s, US, Vietnamese and Thai troops were to be trained at Britain's jungle warfare school in Malaysia. In the longer term, the setting up of Singapore, with its deep-water port facilities, first as an autonomous city and then, in 1965, as an independent city-state, was a common asset for both British and US imperialism. It provided US imperialism with a welcome base for its Pacific fleet, a large modern financial centre and a dependable trading post with direct access to Malaysia's market and natural resources.

Tensions in the Middle East

The tensions between two close allies who were at the same time ruthless competitors manifested themselves most obviously in the Middle East and in particular in the oilfields of Iraq and Iran. In a comparatively short period of time, the British bourgeoisie lost to its US ally many of the positions it had taken so long to occupy in the oilfields of the Middle East.

First, there was the case of Palestine. London wanted to take opportunity of the war to bring a larger part of this area into its own sphere of influence, at the expense of France's past influence over Lebanon and Syria. In particular, this would have allowed London to link its oil operations in Iran and Iraq to the Mediterranean under its own direct control. The Labour government hoped to have the support of their US allies in this venture. Instead, Washington backed the setting up of the state of Israel, thereby changing completely the balance of power in Palestine and weakening the local Arab feudal leaders on whose support Britain had built its strategy. Not only did French influence remain where it had existed before, although significantly weakened, but Britain's post-war sphere of influence was reduced to today's Jordan, without any access to the Mediterranean, while the new Israeli state became a Trojan horse for US interests in the region.

Then came the crisis of the early 1950s in Iran. At the time, Iran was the private backyard of the Anglo-Iranian Oil Company - the predecessor of BP - which was owned jointly by the British government and private shareholders. Whereas oil-buying contracts were being updated throughout the Middle East, on the basis of a fifty-fifty sharing out of the proceeds of oil sales between US oil companies and the governments, AIOC insisted on sticking to the more drastic pre-war arrangements. This turned the ownership of oil resources into a political issue in Iran. A month after the election to office of moderate nationalists led by Mohammed Mossadeq, in 1951, the government announced a plan to nationalise Iran's oil industry.

In response to Mossadeq's offer of reasonable compensation, the British government immediately claimed additional compensation for future profits lost or new oil concessions. However, even though the Foreign Secretary and Defence Minister were in favour of a military intervention, the British government balked at this prospect, especially after US president Truman made it absolutely clear that the US government would not support it. So, instead, more subtle tactics were used. For a start, a worldwide boycott of Iranian oil was organised, Iranian assets abroad were frozen and vital exports to Iran, such as sugar for instance, were stopped. This blockade was supported by all Western governments and oil companies, which all had vested interests in demonstrating that such unilateral decisions would be extremely costly for any oil-producing country.

The next move was the setting up of a team bringing together the British Foreign Office, MI6 and the CIA, with the aim of overthrowing Mossadeq's regime and imposing a military regime under the rule of the Shah. The Islamic clergy was used to bribe large numbers of marginal urban poor to stage demonstrations in the streets of the main towns in favour of the Shah. These were then used by the Iranian high command as a pretext to overthrow Mossadeq and impose a military regime under the Shah's authority.

A new arrangement for Iran's oil was then reached. The US government intervened to ensure that all five US oil majors would be part of it. For good measure, the French state-owned oil company CFP and Anglo-Dutch Shell, which had had no assets in Iran so far, were involved. The Iranian government retained the ownership of the oil fields and the old AOIC refinery. In return, it would sell its oil only to the newly-formed consortium made up by the oil majors. In this consortium, BP got 40%, Shell 14%, and the others 8% each. In addition both the government and the majors would pay BP some compensation spread over several years. For BP this was certainly not a bad deal in the short-term, far from it. But it was nonetheless the end of Britain's 40-year old monopoly over Iranian oil, to the advantage of its US ally.

Only three years later, in Egypt, the British bourgeoisie yet more ground to the USA. In 1954, Colonel Nasser - the leader of a group of nationalist officers who had staged a coup against King Farouk in 1952 - took power. This implied a likely reduction of British control over Egypt. But it was assumed that the Suez canal, which links the Mediterranean with the Red Sea, would remain in Anglo-French hands together with the canal's profits.

In July 1956, however, Nasser announced the nationalisation of the canal. Soon a plot was being hatched which involved British and French expeditionary forces invading Suez, allegedly to act as "peacekeepers" in response to a pre-arranged Israeli "invasion". It also involved lies on a grand scale to parliament and the world in general. In fact, though the fighting was over when the expeditionary forces arrived, there was much gratuitous killing of innocent civilians and Cairo was heavily bombed, nonetheless.

Protests against this manoeuvre were led - outside the Arab world itself - by the United States. When a run on sterling started, the USA refused to bale out the British government. Although it was totally hypocritical on the part of the US leaders, they were keen to win some credit for themselves, at Britain's expense, in order to counteract their negative image as Israel's protector. For the time being they had nothing in particular to complain about as far as Nasser's regime was concerned and were happy to appear as honest peace brokers in the Middle East.

Despite the Suez debacle, just two years later, Britain was cooperating again with the USA in the region for mutual benefit. This new cooperation was brought about by a shift in the balance of power to Britain's disadvantage in Iraq. Although Iraq had ceased to be a British mandate in 1932, Britain had remained dominant with its oil interests (dominated by Shell and BP) secured by military and air bases. The British had also occupied Iraq during and after World War II and Iraq's monarch and leading politicians had long-standing British connections. This relationship ended abruptly in 1958 with the overthrow of the monarchy by a section of the military which, in the context of a popular mobilisation of the Iraqi population, proceeded to make demagogic threats against Iraq's pro-Western neighbours - Jordan and Lebanon.

This was merely political posturing. But Britain and the USA had their own reasons for making a show of strength in response. On the one hand they wanted to reassure their client regimes in the region that they could count on imperialist aid if it was needed to keep them in power. On the other hand, it was also a warning to the Iraqi regime not to tamper with the flow of oil. So for both "threatened" countries a possible coup was used to justify military intervention - British troops being sent to Jordan and American troops to Lebanon.

A very similar tactic was pursued three years later in Kuwait. In July 1961 Kuwait received its nominal "independence" from Britain. Within ten days of it being declared, in response to territorial claims over Kuwait by Baghdad officials, 7,000 British troops had arrived in a show of strength designed to spell out to the Iraqi leaders that no efforts would be spared to protect Britain's enormous oil interests in what was, at the time, the third-largest oil producing country in the world, supplying 40% of Britain's needs. By the same token, British troops were also defending the interests of the US oil majors which shared Kuwait's oil with BP.

In the other oil-rich states the reverses for British capital were less visible but the long-term erosion of Britain's influence, almost exclusively by the USA, has been continuous. In Saudi Arabia, which was a virtual construction of British imperialism in the 1920s, British companies had already been excluded in the 1930s by the US majors. Even in the much smaller Gulf states on the Arabian peninsula like Bahrein, Oman, Qatar and the United Arab Emirates, where for many decades Britain made and deposed rulers at will and ex-British military personnel ran the armed forces, the police and even government ministries, space has had to be made for US imperialism and even lesser rivals like French imperialism.

By 1968, however, the formal decision of the British government to withdraw the army from the Middle East implied that British influence would no longer be exercised in the region by force of arms. But the Gulf War and the subsequent eight years of on-going crisis showed what this commitment was worth when Britain's "special ally" demanded assistance.

Inter-imperialist rivalries in Africa

Part of the post-war settlement between the USA and its wartime allies, Britain and France, concerned the so-called "Open Door" policy. Thus US imperialism had no objection to the European colonial powers resuming their pre-war empires in the short term at least, provided US firms had equal access to raw materials on the same terms as British and French companies. But in Africa, as elsewhere, this did not mean that nothing had changed as a result of the war.

True, during the war British and French imperialism in Africa had not been humiliated as in Asia at the hands of the Japanese. But the word of the white man's crushing defeat spread and it was not long before strikes and rebellions - in West Africa in particular - indicated the sort of long-term problems that the old imperialist powers were likely to face. Due to the pressure of the USA and the need to avoid recurrent rebellions, a process of decolonisation was carried out almost simultaneously in all African colonies, in the late 50s and early 60s, although for Britain's colonies this dragged on much longer in the particular cases of today's Zimbabwe and Kenya.

It was after decolonisation that the two colonial powers chose different routes for safeguarding their interests. The French kept standing armies in their former colonies and intervened directly where the problems arose. This was not the preferred policy of the USA. However as sub-Saharan Africa was not a market large enough to attract the appetite of US conglomerates, the US leaders did not oppose the de facto survival of the French empire. Occasionally, even, French troops stationed in Central Africa were used to carry out the policing tasks which were considered necessary in Washington. They were considered as a factor of political stability, something which was of great value as long as the Soviet Union remained in existence as a possible source of support for anti-imperialist movements.

By contrast, the post-decolonisation policy of British governments was closer to that favoured by the US. The links maintained by the British bourgeoisie with its former African colonies were looser, being based on economic dependency, individual loyalties and the development of small local wealthy classes whose interests were interlinked with those of British companies, rather than through a military presence. But as a result these links were also less effective in maintaining regional stability.

In any case, the main cause for regional instability, as it turned out, was not the possible development of a new wave of nationalist movements, but the conflict between the rival imperialisms operating in Africa.

This was illustrated very early on, with the Biafran war in Nigeria. The vast oil wealth of the country was concentrated in the south-eastern province of Biafra. Its Ibo population was led by degrees to opt for secession after widespread and repeated massacres of Ibos working in the north of the country had heightened tensions. The long drawn-out and bloody war which followed was greatly aggravated by imperialist rivalries. Britain and the USA supported the Nigerian federation; France backed Biafra behind the scenes. Of course the only reason they all became involved was because of the oil. The real winners were the arms traders (from all sides) and the Anglo-US oil concerns - in particular Shell, which was able to expand its operations even while war raged only a few miles away.

The conflict between Anglo-American and French interests, which emerged during the Biafran war, has been on-going ever since, in Sub-Saharan Africa. For a long time it was hidden by the fact that the front stage of the African scene was occupied by the wars raging in the so-called "frontline states" - Angola and Mozambique. In both conflicts imperialism intervened by proxy (through the Rhodesian and South African regimes) to contain nationalist movements (or, once they were in power, to undermine them) which were considered not flexible enough to the imperialist order and therefore inclined to seek help from the Eastern bloc. In that sense these conflicts were still rooted in the Cold War era.

But since the early 1990s and the collapse of the Soviet Union, the old inter-imperialist rivalries have re-emerged, front-stage. From Rwanda to Zaire, Liberia, Gabon and Sudan, bloody civil wars have been, or are still taking place, which are really wars by proxy between French imperialism and the Anglo-American block. In this on-going conflict, the Anglo-American block has been the most successful so far, absorbing Rwanda and Burundi into their sphere of influence and loosening France's grip over Zaire. But in the process, one can be sure that US interests will be served first, and then, maybe, those of British companies, provided there is enough left for them.

However, victories are not always so clearcut on the ground. Kabila, the Anglo-American's preferred candidate for the post of dictator of Zaire, has turned out to be something of a loose cannon and no-one can say for sure in what direction he will turn next. France, on the other hand, seems to have made some gains in Liberia when the US leaders finally endorsed the balance of forces between the local warlords by supporting Charles Taylor, whose links with France's top politicians are well-known. But the country has been destroyed by the war and there is no certainty that Taylor will stick to his past allegiances should the US lure him with an attractive aid package. Likewise, for Kabbah, recently restored by Blair and Clinton in Sierra-Leone. Judging from the latest developments, despite this considerable backing, he just does not have the support to remain in office.

What is at stake in this domino game is, in fact, the destruction of the past spheres of influence. In any case, this is the aim of US imperialism, which never had a colonial empire in Africa, so that the whole African continent can become a playground for US multinationals. This puts the British bourgeoisie in a contradictory situation. They needs US support to reduce the influence of their main regional rival, French imperialism, and boost the profits of British companies in Africa. But as a result, London is obliged to open up its own sphere of influence even more to US penetration, at the expense of British companies. Once again, US capital takes the largest share of the spoils while British capital is left with the crumbs.

But whichever way it goes, it is in millions of lives that the cost of this African domino game should be measured.

The military connection

The Anglo-US "special relationship" has always involved a military connection between the two imperialisms, in terms of armaments and in terms of military cooperation on the ground.

Since 1949 the USSR, armed with nuclear missiles, had faced NATO (the North Atlantic Treaty Organisation) which was under the nuclear shield of the USA. In theory the USA had pledged itself to use nuclear weapons in defence of NATO members if the situation so required. But what if vital British or French interests were threatened by the USSR in a non-NATO context? However unlikely the prospect of nuclear retaliation, this was the justification for the two European powers with imperialist pretensions to develop their own "independent" nuclear capabilities in the 1950s. The real reasons, of course, were somewhat different. Not only did this nuclear capability allow these powers to be seen as a serious threat by the Third World countries in their respective spheres of influence, but it implied an enormous bounty for a whole section of their capitalist classes, through the guarantee of a regular flow of army procurement.

When the British-made missile, Blue Streak, turned out to be defective, the "special relationship" came to the rescue. Britain was the first, and is still the only country, to have been given US nuclear capability. The then US president promised the British prime minister America's Skybolt missile, but it was never produced because of escalating costs.

At the time though, there were two options for Britain. Either it could have pooled its nuclear resources with France or could have asked for access to America's Polaris technology. The former option might have been one way for Britain to lessen its dependence on the USA at a point - in the early 60s - when Britain's worldwide role was in any case shrinking. In the end President Kennedy agreed to provide Britain with Polaris missiles - at vast expense Britain would build its own submarines and warheads. By contrast, Prime Minister MacMillan never had serious discussions with French President de Gaulle and subsequently de Gaulle turned down the possibility of similar weapons for France on the grounds that the USA would want to say when they could be used. And the following year de Gaulle vetoed Britain's application to join the Common Market on the grounds that Britain would be acting as a Trojan horse for America to dominate Europe.

As to the military cooperation within the "special relationship", Britain must be one of the largest US aircraft carriers in the world, with nearly 10,000 US airmen and 1,700 naval personnel. True, this is much less than ten or fifteen years ago. But US military forces as a whole have shrunk by over a third in the interim. In Europe, only Germany is more important as a "home" for US forces and then only for the army and airforce. London is the headquarters of the US Navy in Europe. Moreover, Scotland continues to provide a base for US submarines armed with nuclear missiles, the destination and purpose of which are "top secret" and to this day - ten years after the end of the Cold War - remain shrouded in mystery. So too are the activities of spy stations like GCHQ, Cheltenham, where US personnel are also employed.

In addition, Britain provides the US army with military facility abroad. One of the most important is the Indian Ocean island of Diego Garcia, from which the population was forcibly removed to Mauritius between 1965 and 1973. Diego Garcia was the airbase used by the US B-52s which bombed Iraq last December. The US also has a small naval presence in Kuwait and Qatar - facilities available, thanks to the British.

But Britain also still has military resources located overseas which can be put to the service of the "special relationship". In a war situation British soldiers could be sent to fight alongside their US counterparts from their bases in Cyprus, Nepal and Brunei. Alternatively, the bases or facilities themselves could be made available to US military. In this latter connection the naval and air facilities of both Gibraltar and the Falkland Isles could be extremely useful.

The "special relationship" today

By the time of the return of Hong Kong to China in 1997, exactly fifty overseas colonies and possessions had been returned by Britain to local rule in the previous half century. The process of dissolving the empire which began with independence for India in 1947 was virtually complete. Having said that, the so-called "Commonwealth" exists; it meets each year, has a permanent secretariat in London and is a useful vehicle for maintaining British influence in part of the "English-speaking" world. Or even Portuguese-speaking, for that matter... Because, with the ending of apartheid and the return of some sort of peace in southern Africa a former Portuguese colony like Mozambique, which is part of South Africa's economic orbit, has joined the Commonwealth following South Africa's own return to the fold.

By and large, though, the Commonwealth operates more often as an instrument of US policy than as an instrument of the British bourgeoisie's political influence. In Africa, for instance, the most prominent initiative sponsored by the Commonwealth has been - under the cover of the regional organisation of West African states, which brings together both English and French-speaking countries - the setting up of ECOMOG, an intervention force led by Nigerian generals and staffed mostly by Nigerian and Ghanaian soldiers. The objective of ECOMOG was to restore order in Liberia, that is, in the US backyard in Africa. Needless to say, the real sponsors behind this were the strategists in Washington who had already burnt their fingers in Liberia with a failed rescue expedition in the capital.

The other function of the Commonwealth is, of course, as a pompous organisation which maintains personal ties between political leaders across the former British empire. Except that nowadays these leaders are more often than not likely to have been schooled in US academies rather than at Oxbridge. So that it is not even a reliable training ground for cadres loyal to the interests of the British bourgeoisie.

In any case, the Commonwealth is no longer a machinery capable of enforcing the rule of the British bourgeoisie over the Third World. In fact in those areas of the old empire where Britain formerly had a substantial economic presence and where the stakes are relatively high - say in India - British business may still dominate the tea plantations and have a significant presence in the areas of banking and insurance but economically, their share of Indian wealth has been falling for decades and is outstripped by Japan, not to mention the USA itself.

In Hong Kong the British bourgeoisie has only recently relinquished its privileged position and in the pre-independence negotiations with Peking was able to ensure future privileges for its banks for several decades at least. On the other hand, with the HK dollar already tied to the US dollar since 1983 and with Americans making up the largest and most prominent section of the foreign community, British capital's control over the colony had already virtually been taken over by US and Japanese capital before the handover to China.

On the other hand, although the US bourgeoisie may be the most powerful in the world, it is not all-powerful. It is certainly less powerful and capable of imposing its will on the rest of the world than it was, say, twenty years ago. It needs partners and allies to share the cost, both political and material, of its great power games, or to facilitate its efforts to push aside economic rivals. And there is no shortage of lesser imperialist rivals who are prepared to challenge the might of the US leaders - even if only on secondary issues. But these can still represent very large contracts, for instance. In that sense, there is a space for the British bourgeoisie to fill, in the shadow of US capital.

The reality of the situation is that the USA still has what the British bourgeoisie has no longer - a relatively dynamic industrial machinery. The US bourgeoisie can win new markets for its goods, even in a context of crisis and stagnation on the world market. The British bourgeoisie cannot. But what it can do is act as an intermediary between its debtors and US companies, offer insurance cover and all sorts of financial and commercial services. If British capital remains a major player, it is due to the strength of its financial sector, which can only exist as a parasite on a large productive sector - and for the time being that is mostly that of the USA.

This focused parasitism is illustrated in particular by the fact that Britain has, for most of the past two decades, been the largest single foreign investor in the USA - despite having less capital to invest than say Germany, not to mention Japan. Likewise, many British companies have developed extensive links with US companies, rather than their European counterparts. Some have even gone as far as taking steps to move their financial headquarters to the USA, and getting their shares quoted in Wall Street rather than the City - without this changing anything to the fact that British shareholders still control these companies.

This situation could change, of course, although it is difficult to imagine the links created over the past half-century between British and US companies just disappearing overnight. But these links could remain while the nature of the "special relationship" changes. This is what is at the heart of the discussion over whether Britain should join the euro or not. Although Europe has been the most important trading partner of Britain for over three decades, the British bourgeoisie continues to be ambivalent towards the euro and the prospects of closer European links. Partly this is recognition of the fact that a single Europe is likely to be dominated by German and, possibly, French capital. But partly it reflects Britain's economic and political links with the USA which may be put at risk if the euro becomes a weapon in the rivalry between the European and US bourgeoisies. But is this contradiction in itself unviable? Is it more contradictory, for example, than other aspects of the "special relationship" which often meant that the British bourgeoisie was ripped off by its chosen ally?

What is sure, is that for the time being there is no escape for the British bourgeoisie from their dilemma. On the one hand the stagnation of the world market means no escape from closer integration with Europe with its enlarged market and growing joint projects and mega-mergers, not least to offer the possibility of resistance to US rivals. On the other hand the British state clings to the "special relationship", where it can, in theatres like the Middle East and Africa, to try and maintain Britain's dwindling economic and political influence outside Europe.

If the world economic crisis intensifies, this contradictory position of British capital is likely to become increasingly untenable. Whether it likes it or not, Britain, along with the rest of Europe, will be drawn into trade wars with North America. Meanwhile, and for the foreseeable future, there is nothing "peaceful" or "democratic" about the "special relationship". It remains an alliance between sharks to devour the world's resources, and the smaller shark is not necessarily less voracious!