Throughout the period from 1945 to 1950 the Attlee government worked for the establishment of a world economy in which full employment could be reconciled with multilateral trade . But Anglo-American attempts at the restoration of multilateral trade after 1945 were bedevilled by the dollar shortage . The first attempt broke down in the 1947 convertibility crisis , which revealed a basic connection between the health of the British economy and the viability of the sterling area. The second attempt was centred on the Marshall Plan , which aimed to construct an integrated Europe of which Britain would be the leader. Most histories of post-war European integration , and of British policy towards it , are characterized by two basic assumptions. First , the Marshall Plan not only saved West ern Europe from political and economic ruin after 1947 by helping it to overcome the dollar shortage , but created the conditions for international expansion . Secondly , the British held aloof from the development of an integrated Europe out of an antiquated determination to play an imperial role in the post-war world . 1
This article challenges those assumptions . I t i s true that after 1947 Britain placed the maintenance of its world role at the centre of the sterling area before any irreversible commitment to European integra tion. British imperialism did not perish with decolonization in South Asia : but the invocation of folie de grandeur does not explain its survival . Britain's experience in the convertibility crisis led it to believe that Europe's dollar problem was part of a world-wide disequilibrium with which the Marshall Plan was inadequate to cope . Further, the liberal model of European integration implicit in the Marshall Pla"n threatened sterling area viability . In consequence Britain worked for inter governmental European co-operation and argued that sterling-dollar partnership to stimulate international expansion would be the most effec tive way of restoring multilateralism .