The historiography of British rearmament in the 1930s is worthy of an essay itself but here is neither the time nor place. Briefly, the so-called "failure" of the British to adequately and properly rearm before World War II must be placed on the British government. A conventional interpretation is that the pace of British rearmament was restrained by the ability to adequately finance it without resort to debt. Robert Paul Shay's "British Rearmament in the Thirties: Politics and Profits" (1977) is an admirable history of the British government's struggles to balance the numerous considerations and within this conventional approach. According to Mr. Shay, Cabinet considerations included the competing needs of the services and their rivalry, the urgency and nature of perceived foreign threats (Germany, Japan and Italy), the eventual failure of disarmament initiatives, the progress of British diplomacy, some nod to public opinion, opposition parties, private industry and the risk of profiteering (which did occur in the aircraft industry), disruptions to trade and industry that might jeopardize the recovering economy, labor, and the all-important financial limits voiced by the Treasury which had considerable weight until late 1938. I recently read Shay's book and I immediately recognized suggestions of Price's argument in its later chapters. Note that Shay's book was published in 1977 and Price's in 2001. Conventional historiographical placement would have you believe that Shay and Price are in opposing camps but I find them splendidly complementary.
Christopher Price in this important and excellent book lays out a convincing case that it could have been otherwise. It is a near daunting challenge to neatly summarize his argument in a few paragraphs. Price asserts that the orthodox liberal trade and finance positions of a core group within the British government in the interwar period led them to squander a potential source of financial resources, notably gold reserves, and not fully exploit and mobilize the potential of the sterling bloc countries. This foregone path might well have provided the resources with which to pursue quicker and greater rearmament than did occur. Whether this might actually have deterred German aggression is beside the point, however, it might well have strengthened the diplomatic resolve to oppose the Germans earlier than 1939.
The relationships and dependencies of the sterling bloc trading countries existed before the Imperial preference system arising from Ottawa Conference (1932) but the agreement and tariffs sought to protect and increase those economic and financial relationships, an example of the prevalent economic nationalism which was inimical to liberal free trade orthodoxies. Naturally the Americans, eager to advance their country's interests, recognized the opportunity and dangers in the course of British decision-making. Essentially a series of British cabinets, especially that under the leadership of Prime Minister Neville Chamberlain, pursued two paths of appeasement after 1936: political and territorial appeasement with Nazi Germany and, importantly, economic appeasement with the United States, for U.S. support was perceived to be critical to British success in any future war with Germany or Japan!
It took some hard study and thinking to wrap my mind around Price's argument. In the end I am impressed by his perceptive intelligence and scholarship and I believe he got it mostly right though my brief summary does not do his argument justice. It does not necessarily follow that the work of other, earlier historians is wrong and I hope some of those historians who have covered this ground offer their evaluation of Mr. Price's book.
The deficiencies I perceive in this book do not compromise the basic argument. Whether his marshaling of the evidence fully supports the argument will require the test of time and evaluation of his peers. Mr. Price's book is drawn from his doctoral dissertation completed a few years earlier and it is a good start for a young historian. My own research has been on the economic and financial history of the interwar period, and one strand of this history is the rivalry between the United States and Britain and these countries with others. In short I advanced my understanding of these relationships by reading "Britain, America, and Rearmament in the 1930s: The Cost of Failure" and I strongly recommend it to all those interested in this subject.