Retreat from Globalization: Britain and the Renewal of Imperial Trade between the Two World Wars

Abstract

The great economic and human disaster of the slump of the 1930s was associated with a sharp retreat from the internationalism of the prewar years. As the dominant economic power of the nineteenth century, Great Britain had played a central role in the liberalization of international trade. An open world system suited Britain’s interests, enabling its industrialists to capitalize on their technical and industrial leadership and facilitating access to cheap food and raw materials. Demolishing the protectionist walls that had shielded its own early industrialization, from the 1840s the Corn Laws were scrapped, the Navigation Laws governing shipping were abolished and Britain embarked on a mission of tearing down barriers to global trade. Many duties were scrapped unilaterally, but trade treaties incorporating the most-favoured-nation clause (MFN) were a powerful tool and, when necessary and possible, coercion could be used as a last resort. As an inevitable corollary preferences for empire trade disappeared. The movement reached its zenith during the third quarter of the century before, in a time of intensified competition and rising international tensions, its progress was halted by a globalization backlash.