Of Winston Churchill's Contribution to the Modern (Postwar) World

Jun. 29, 2010 11:50 AM ET1 Comment
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Value, Long Only, Contrarian

Seeking Alpha Analyst Since 2009

In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s.

Like the little Dutch boy with his finger in the dike, some people are positioned where they can singlehandedly make the difference between disaster and safety. One of these people was Britain's Winston Churchill. Since he was the subject of "adult" world leadership on another thread, I will take this opportunity to demonstrate what he achieved for the world.

By June 1940, Britain appeared to be all that stood between the Nazis and world domination. Britain was too weak to defeat the Nazis by herself. But if she took the easy way out, she could virtually have guaranteed that the Nazis would succeed. Here were three scenarios Churchill may have been looking at:

!) Britain Survives.

2) Britain Goes Down in a MAD (Mutually Assured Destruction) Scenario

3) Britain Collaborates (with the Nazis)

1) Britain Survives. This was the "happy ending" scenario. Britain was just strong enougn to fight off the German air assault. Given this fact, the Navy stood in the way of invasion. The United States, initially an onlooker, eventually mobilized and re-armed. Thwarted by Britain, Hitler turned elsewhere, invading the Soviet Union, and overextending German power, thereby bringing about his defeat.

2) The "MAD" scenario. This is the most critical of the three scenarios. The Nazis do invade and occupy Britain, but the effort leaves Germany too weak to pursue her further aims.

The German Luftwaffe is crippled in a fight to the death with the Royal Air Force. The German surface fleet losses EVERY SHIP convoying troops across the English Channel. Ten German divisions end up on the bottom of the English Channel. The ones that make it across have to be reinforced and resupplied by air, before Germany finally overwhelms the undermanned British army. Some 50 German divisions garrison a restive and sullen population.

What's left of the fleet heads off to Canada. Meanwhile, "our Empire beyond the seas, armed and guarded by the British fleet, will carry on the struggle, until in God's good time, the New World, with all its power and might, steps forward to the rescue and liberation of the old."

Germany attacks the Soviet Union the following year with two-thirds of the force she actually committed in 1941, and is defeated after initial success. 

3) Britain Collaborates

This is the disaster scenario. The British fleet (the equal of the American fleet) goes over the Germans intact. The Royal Air Force (RAF) also goes over to the other side.

The Germans invade the Soviet Union in1941 with TWICE the airpower (counting the RAF and RAF-inflicted casualties), that she actually deployed (this was the crucial military arm). Without fear of invasion, 25 more German divisions are taken from France to the Russian front. Twenty-five British divisions help the Germans crush last-ditch resistance in Leningrad (today's St. Petersburg) and Moscow. (This is a swing of 100 divisions from scenario 2, 50 divisions from the actual war).

Convoyed by the British Navy, Rommel's Afrika Korps invades Brazil in 1942, instead of Eisenhower's Americans invading North Africa. The Japanese Navy (also the equivalent of the WHOLE American navy), convoys a mixed, and victorious German-Japanese force from Siberia to British Columbia.

American war production rises ten-fold between 1941 and 1943 (as in real life) thereby matching the combined output of Germany, Japan, and Britain. But the friendless country can't stand up to the combined manpower of Germany, Japan, Britain, and newly recruited troops from the former Soviet Union and South America while surrounded on three sides. It takes almost a decade, but the American nation, and democracy, goes down in flames.

Churchill himself warned, "If we fail, the whole world, including the United States, including all that we have known and cared for, will fall into the abyss of a New Dark Age, made more sinister, and more protracted, by the light of perverted science."

This scenario was favored by the upper crust "Cliveden Set," which included Lady Astor, formerly Nancy Langdon of Virginia. It would have represented "failure."

Scenario 2 would not have been a failure, the Allies would (probably) have won. This was Churchill's fallback position "which I do not for a moment believe."

The moral was not that Britain had to win. It was that Britain had to FIGHT.

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