The Sterling Empire and the International Economy: Frictions with Cosmopolitan Britain, 1958 and Beyond

Abstract

The periphery related in a different way to the international economy under conditions of liberal multilateralism. These changes and Britain’s modified requirements when embarking on the new cosmopolitanism diminished the economic complementarity between Britain and her (former) empire. The situation was aggravated by new policy designs of states on the periphery in view of their economic development and foreign economic relations. The more forceful political manifestation of these new states and some of the old colonies reflected greater differentiation in political organization and social and economic transformations. The drive to peripheral development changed financial institutions on the periphery and undermined British financial control. Britain needed to anticipate damage arising from the imperial legacy. British policy focused on preventing abrupt changes in the familiar areas of currency arrangements and trade policies, on avoiding new claims in development finance, and on securing old political alliances. Ghana became the most delicate case. None the less, this defensive strategy was only partly successful, and the (former) empire’s relevance to Britain decreased. Even so, Britain was able to avoid an emergency that might have resulted from non-cooperation in the sterling area by the periphery. Historical research on the empire has so far given little attention to this important transformation in the late 1950s.