Alternate History: 1943-A road not taken-1

WASHINGTON, Aug. 9 (UPI) -- This is an essay in alternate history, to suggest how, had random factors fallen differently, Britain's history in the gloomy 1945-79 period could have been very different, and perhaps happier. It looks in particular at what might have happened had Thatcherism (without the leadership of Margaret Thatcher herself, then only 18) been adopted in 1943, in the darkest days of World War II.

Corelli Barnett, writing in July 28's Sunday Times, blames Britain's elite for the country's economic failings in the 1950s, as it frittered away the country's early technological lead in computers, and its position of strength as the only European country whose industrial machine was more or less intact in 1945.

This is in line with his previous books "The collapse of British power" and "The Audit of War" in which he blames the same elite for Britain's poor economic performance after 1870, and her industrial struggles during World War II.

Barnett fails however to explain Britain's successful industrial renaissance in the 1930s, under the leadership of Neville Chamberlain, first as chancellor of the exchequer and then as prime minister. The restructuring of British industry; its move from the old sectors of shipbuilding, railways and textiles to the new sectors of motors, automation, aviation and chemicals/plastics, was already well under way by 1938, after a period of stagnation in the 1920s caused by an overvalued exchange rate.

By adopting Thatcherite policies of free markets and low taxes in 1943, without ditching the country's traditional governing class or their values, Britain could have rebuilt her economy, and her technological lead, before Germany and Japan had recovered, and as a result have avoided her postwar decline into a dependency of Europe. This essay in alternate history shows how it might have happened. It begins with a heart attack that was not fatal, but could have been...

It is March 1943. The big Humber, its tires bald from overuse, slithers through the dark London streets, guided through the sheeting rain by the Foreign Office chauffeur. In the back seat, Foreign Secretary Anthony Eden composes his thoughts for the sad meeting ahead at No 10 Downing Street.

It appeared that the war's strain had finally got to Winston Churchill; according to Dr. Charles Moran's phone call, this heart attack was likely to be fatal. Eden can't help his mind from wandering to his chances of the succession. He was clearly second in the party, and had been chosen by Churchill as his deputy, but at 46, would he be thought too young? Would the late Neville Chamberlain's remaining supporters, or the Imperialists, block him? On the other hand, whoever was chosen would have to work with President Roosevelt, Russian leader Joseph Stalin and the Labor party -- with all three of those constituencies, Eden is clearly first in line.

A truck, ill-lit because of the blackout, shoots across the street at Hyde Park Corner and hurtles towards the Humber. The chauffeur wrenches the steering wheel to the right, but the tires have lost traction, and the Humber spins out of control. Unluckily, a lamppost is in its path.

The double funeral is a huge occasion; in spite of the poor spring weather, and the wartime transportation restrictions, more people turn out to mourn Churchill and Eden than had appeared for Gladstone in 1898.

Deputy Prime Minister Clement Attlee represents the government, of course, but political eyes are turned, not to him but to the Colonial Secretary Oliver Stanley. Attlee, as leader of the Labor Party, is unlikely to become prime minister at the head of a government that depends in Parliament on a huge Conservative majority.

Yes, Lloyd George had done it in 1916, but Lloyd George, like Churchill, had been a man of immense charisma and an obvious war leader. Attlee, to put it mildly, is not.

While Stanley is little known to the wider public, he has a solid base of support in the majority Conservative Party, and has worked well with Attlee and Bevin in the War Cabinet. Moreover he is young -- at 47, only a year older than Eden had been -- and would thus give an image of freshness and vigor to a Conservative party that has dominated the government for 12 years, is besmirched by the Munich failures and is already nervous of the likely outcome of a postwar election, without Churchill, against a Labor Party fortified by the Beveridge Report, published a few months before, that advocated a postwar Welfare State.

Stanley's election, not by democratic vote but by the "normal processes of consultation" of senior party and government figures, is more or less a foregone conclusion.

1943 is not 1940 -- with U.S. and Soviet participation, and the victories of El Alamein, Stalingrad and Midway won, the war is clearly well on the way to a successful conclusion.

Stanley has already called for greater vigor and clarity in Conservative policies at a party meeting in November 1942. Thus he sees no reason why Labor, who has been pulling politics their way for the last couple of years, with the Beveridge Report and Sir Stafford Cripps' mission to Moscow, should be allowed to dictate Conservative Party policy for a postwar world that is fast approaching.

Accordingly, he decides on a Cabinet reshuffle, to bring forward a distinctive Conservative view, based on the successes of the 30s, of how the postwar world should look.

To replace the lost Eden, he promotes the immensely senior but sidelined Leo Amery to the Foreign Office, and gives him primary responsibility for negotiations with our U.S. and Soviet allies. Robert, Lord Cranborne (the future 5th Marquess of Salisbury), who was Eden's deputy at the Foreign Office, is promoted to succeed Stanley at the Colonial Office, with a brief to maintain Britain's close ties with the Dominions.

In economic policy, too, a distinctively Conservative, free-market voice is needed; accordingly the former merchant banker Oliver Lyttleton is promoted to chancellor of the exchequer, to replace the ailing Kingsley Wood, with instructions to design a truly Conservative policy for the postwar world. Attlee protests, but in truth there is little he can do. Labor's own Cabinet posts are not affected, and Labor has the right to promote its own postwar economic policy through the Beveridge Report and otherwise, as they have already been doing.

August 1943. At the Quebec conference, Foreign Secretary Amery proclaims Britain "allied, but not subservient" to the United States, and insists on a Third Front, with six British divisions to be sent to Bulgaria, at Tsar Boris III's secret invitation, to fight alongside Bulgaria against Germany. In spite of Boris' death in suspicious circumstances on Aug. 28, the regent for the young Tsar Simeon confirms the invitation, and the British force lands at Varna in March 1944.

The Anglo-Bulgarian army advances into Serbia, and makes contact with the Chetnik forces under General Draza Mihailovic, ignoring the communist partisans under Josip Broz Tito.

After initial successes, in May 1944 Amery declares Yugoslavia a "witless Wilsonian fantasy" in the House of Commons, and calls for the recognition of Serbia, Croatia and Slovenia as independent democratic countries. The Tito forces accordingly split, with a "Croatia domovino" force led by the young pro-democracy Col. Franjo Tudjman joining the Allies, and the Ustashe government in Zagreb crumbling by December 1944.

Budapest and Vienna are liberated by the Allies, though the Red Army occupies Romania for its oil. After the war, Serbia, Croatia and Bulgaria are successful democratic countries, with only Slovenia remaining locked in Stalinism under its native-son dictator Tito.

December 1943. Having been briefed by the Government Code and Cipher School on the code-breaking activities at Bletchley Park, and its invention of the Colossus, the world's first computer, Lyttleton, a merchant banker, realizes that the machine could have huge commercial potential -- it could enable banks to manage their risk positions in bond and foreign exchange markets! Told that Thomas J. Watson, IBM chairman, thinks there is a world market for maybe five computers, Lyttleton responds, "How wasteful. Why would there ever be a need for more than one?"

Accordingly, he arranges a consortium of merchant banks and insurance companies, backed by a government research contract, to finance the British Electronic Brain.

March 1944. Stanley and Lyttleton reject John Maynard Keynes as British negotiator for the forthcoming Bretton Woods conference. Instead, Lyttleton decides to attend himself, accompanied by the free market economist, London School of Economics' Frederick Hayek, whose "Road to Serfdom" is in publication. At the conference, Hayek refuses to endorse U.S. Deputy Treasury Secretary (and Soviet spy) Harry Dexter White's idea of a World Bank and International Monetary Fund and insists that, after a transition period of no more than five years, world monetary arrangements must be on the basis of a full Gold Standard, with no restrictions on private holdings of gold.

Lyttleton, meanwhile, positively refuses to discuss the abandonment of Imperial Preference tariff protection for the British Empire, and indignantly rejects Treasury Secretary Henry Morgenthau's plan to pastoralize Germany. The conference breaks up in disarray, and Roosevelt, to work off his annoyance, gives Irish Prime Minister Eamonn de Valera the Presidential Medal of Freedom.

At the end of the war the following year, there is no question of an American official loan to Britain (though modest private funding continues to be available through Morgan and other U.S. banks.) Instead, Lyttleton devalues the pound immediately to $2.80, thus making Morris Motors cars highly competitive in the U.S. market, as its Chairman William, Lord Nuffield, wants.

August 1944. Following the Warsaw Uprising, Britain assists the London Poles to mount a Warsaw Airlift, which allows the defenders of Warsaw to hold out until the Germans retreat.

Stalin has to sign an agreement with the London Poles, and the Red Army's advance continues in tandem with Polish forces.

At Yalta, the following February, Amery accuses Roosevelt of being a "stooge of Stalin" and refuses to join the United Nations until the U.S. undertakes to guarantee Polish independence. In late March 1945, Field Marshal Bernard Montgomery conducts a lightning "dash for Berlin" across the North German plain against token German opposition, reaching Berlin well before the Soviet/Polish forces.

The occupation of Germany includes only modest Soviet forces, and the country achieves united independence in 1949 under the staunch British ally and fellow conservative Konrad Adenauer. Poland also remains independent; Soviet occupation in Eastern Europe extends only to the Baltic States, Romania and Slovakia.

July 1945. Campaigning on their foreign policy successes, Labor's alleged friendship with the Soviets, and an aggressive free market program designed by Lyttleton and Hayek, the Conservatives squeak back to power with an overall majority of 26. To preserve bipartisanship in foreign policy, Stanley offers the Foreign Office to Ernest Bevin, who accepts, Amery becoming Viceroy of India.

After the election, Lyttleton brings in a "Budget of Government Austerity" including an immediate scrapping of rationing and controls, reduction in the top rate of income tax to 50 percent, and deep cutbacks in government spending except for the armed forces. Harold Macmillan crosses the floor of the House and joins the Labor Party, as do a number of non-parliamentary figures such as the young Edward Heath.

1947 "Dominion of Palestine and Transjordan" is proclaimed, with a constitution providing for co-dominion rule, with equal representation of Jewish and Arab religious/ethnic groups in top jobs and security forces. Governor-General Montgomery proclaims a "short sharp shock" for perpetrators of terrorist atrocities, which decline rapidly after the execution of convicted terrorists on both sides. The Dominion becomes a regional economic powerhouse, fueled by capital flows from New York and the Middle Eastern oil-producing countries.

August 1948 The "Confederation of Indian Dominions" is proclaimed by retiring Viceroy Leo Amery, Marquis of Birmingham, including 42 independent states of former British India, Ceylon and Burma, all of which separately join the United Nations.

The states are governed by traditional hereditary rulers where they exist, and have parliaments generally elected by limited franchises, often on the basis of household suffrage.

Jawaharlal Nehru, Prime Minister of Bengal, denounces British perfidy, leaves the Confederation and the British Commonwealth, and joins the Soviet-dominated Bucharest Pact. The remaining 41 independent states of the Confederation thereafter adopt free market policies one by one, and in general prosper economically, with only the occasional ethnic unrest or border difficulty.

(Part 2 of this road, taking the story up to 1979, will appear next Friday.)