Editor’s note: As President Obama’s state visit with British Prime Minister David Cameron grabs headlines, we recommend reading Roosevelt Institute Senior Fellow David Woolner’s column on how the Special Relationship was forged in the fires of World War II. This post was originally published on May 26, 2011.
The bond between the U.S. and the U.K. runs deep, especially when it comes to their economies.
In an historic speech before both houses of the British Parliament yesterday, President Obama reaffirmed the “special relationship” between Great Britain and the United States. He made reference to the joint sacrifices both countries have made on the battlefield in defense of freedom, taking special note of the wartime alliance and friendship between Winston Churchill and Franklin Roosevelt that helped give birth to the relationship as the two nations fought “side by side to free a continent from the march of tyranny.”
References to the alliance between Great Britain and the United States in World War II are of course entirely appropriate, as the “special relationship” as we know it began in the dark days of 1939-40. But the president also made reference to the two countries’ strong economic ties and the fact that today we “live in a global economy that is largely of our own making.”
Here, too, the president is correct. Yet most Americans remain largely unaware of this economic aspect of the “special relationship.” Much of the global economy we operate in today does indeed have its origins not in the 1980s or 90s, but the 1940s, as Great Britain and the United States struggled to defeat fascism in Europe and Asia.
To understand this, let’s take a look at the link between the Great Depression and World War II — especially from the American perspective. For Franklin Roosevelt and his Secretary of State Cordell Hull, this link was not only obvious, but tragic. The two men, in fact, were absolutely convinced that the cause of the Second World War lay in the economic depravity and dislocation of trade and commerce that were the hallmarks of the Great Depression. Near the end of the war, for example, in his State of the Union address of January 1944, FDR observed that we “had come to a clear realization…that true individual freedom cannot exist without economic security and independence. Necessitous men are not free men. People who are hungry and out of a job are the stuff of which dictatorships are made.” And as early as the early 1930s, Cordell Hull was frequently quoted as saying, “If goods cannot cross borders, armies will.”
As a consequence of these beliefs, the Roosevelt administration committed itself to the concept of freer trade, beginning with the passage of Hull’s Reciprocal Trade Agreements Act in 1934 and continuing right up through the war. Hull’s policies took the United States in a new direction away from the high tariff policies of the Hoover years, and in many respects laid the foundation for the opening up of the world’s trade immediately after the end of the Second World War. This was best exemplified by the establishment of the General Agreement on Tariff and Trade (GATT) in 1947.
Ironically, in response to the high tariffs of the Hoover administration, the British had established an intra-Empire trading system called “Imperial Preference” in 1932 that allowed most goods within the British Commonwealth to be traded with little or no tariff while keeping US goods out. This was an anathema to Hull, and during the war he used the leverage of Lend-Lease aid to try to get the British to drop it. Hull was never able to get the sort of rock solid commitment to ending Imperial Preference he would have liked, but under Article VII of the 1942 Lend Lease Consideration Agreement (governing Lend-Lease aid), the British did agree to take “joint action directed towards the creation of a liberalized international economic order in the postwar world.”
By 1944, U.S. military and economic preponderance was such that there was little doubt the Roosevelt administration had the upper hand in the “special relationship.” As such, the agreements that were negotiated and signed at Bretton Woods and Dumbarton Oaks that year (establishing the International Monetary Fund, the World Bank, and laying the groundwork for the United Nations) largely reflected the American, as opposed to the British, negotiating positions. The same was true a few years later when the GATT was signed in Geneva.
Viewed from this perspective, the Second World War was as much about the re-ordering of the world’s economic system along American — and away from British — lines as it was about defeating fascism in Europe and Asia. Still, there is no question that during these years the United States considered British cooperation in this effort not only vital, but essential, for without it they doubted their plans for a new world order could succeed. While it may true that Great Britain has always been America’s junior in the transatlantic partnership, President Obama is correct when he says that the Anglo-American relationship is not merely “special” but “essential” to the development of “a world that is more peaceful, more prosperous, and more just.”
David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.