In Imperialism: A Study, John Atkinson Hobson identified unique features of imperialism, noted its damaging impact on participants, and traced its cause to the efforts of Western governments to facilitate the flow of capital into less developed regions.
John Atkinson Hobson’s Imperialism: A Study (1902), a collection of previously published magazine articles, was inspired by Hobson’s observations of British participation in the South African Boer War. He was highly critical of the pattern of “new imperialism” that began around 1870, in which Britain and other European powers seized control of less developed areas of the world, particularly in Africa and Asia. By 1902, this imperialism had become a highly competitive activity among the major powers, aggravating international tensions and causing the strengthening of military forces.
Hobson was distressed that the newly acquired British territories were not allowed to govern themselves. Often, these territories were in areas that were unlikely to receive substantial numbers of European settlers because of tropical climates or unfavorable cultural conditions. British authority was put in place by violence and maintained by an expensive military establishment that governed densely populated ethnic groups regarded as “inferior.” Hobson denounced such racist attitudes; in his view, imperialism undermined democracy and civil liberty at home and abroad. British citizens who gained wealth and power in colonial activities returned home to lives of conspicuous opulence, contemptuous of democratic processes in both Britain and the overseas domains. In colonial areas, the repressive atmosphere spawned liberation movements that sometimes resorted to violent means. Treatment of indigenous peoples was sometimes tantamount to slavery, as in the Belgian Congo (now Democratic Republic of the Congo), where Belgium’s extremely paternalistic government ruled from 1908 to 1960.
Hobson was distressed that a British subject in some foreign land could call for help and provoke an armed British intervention, and so he examined several of imperialism’s most common economic justifications. He found that the extension of British control was not accompanied by substantial increase in British colonial trade, and he emphasized that the net economic value of such trade was far smaller than the measured volume of imports or exports. Instead, Hobson noted that imperialism was closely linked to protectionism. While Britain was operating under a free trade regime, with no significant restrictions or taxes on imports or exports, there was a strong political move to create an empirewide tariff system. Hobson also dismissed the argument that the newly acquired areas provided a suitable outlet for “surplus population.” The British population was not outgrowing its food supplies, and very few persons migrated to such locations.
Why, then, had Britain undergone so much violence and expense? Wealthy families sought overseas positions, civil or military, for younger sons who had been displaced by primogeniture. Missionaries needed protection to bring the prospect of salvation. Hobson, however, highlighted pressures from specific, well-organized sectors of the world of business and finance, such as manufacturers of armaments and other export specialties. His chief focus was on the flow of British capital into overseas investments, which had reached a high level in the nineteenth century. British military power was often used to force foreign borrowers to pay their debts, and in the Opium Wars (1839-1841), the Chinese were forced to permit the importation of opium from British territories. Relying on such backing, a powerful investment banking community had grown and was profiting from securities issued to finance overseas projects. Hobson recognized that Britain’s overseas investments could play a valuable role in promoting economic growth in low-income areas. However, he felt that this process should give more influence to the local population, and so he suggested creating some kind of international supervisory agency.
He admitted there were noneconomic motives for imperialism, from desire for military glory to the wish to save souls. He was convinced, however, that finance capital was able to influence the news media (with which he had considerable personal experience) to whip up nationalistic fervor.
Why should there be such an outflow of capital? Why not invest the funds domestically to enlarge production? Here Hobson linked imperialism to a process he had emphasized in previous writings. Because of the severe inequality among levels of incomes and wealth, domestic consumption could not grow fast enough to keep pace with the rise of output needed to make domestic investment profitable. The process was made more severe by industrial mergers that created monopoly power and monopoly profits. Rapid technological innovation added to the potential surplus supply of consumption goods.
Here Hobson entered the debate over a question that had engaged mainstream economists for a century: Can there be too much saving? Hobson’s answer was in the affirmative. Too much saving periodically showed up in the form of business depressions and unemployment, which in turn added to political pressures to promote exports and foreign investment through imperialism. This analysis led Hobson to plead for social reform measures that would reduce the inequality of incomes and wealth and stimulate domestic consumption. Ironically, the heavy government expenditures associated with imperialism acted to crowd out such attempts at reform.
The fear that excess saving could lead to business depression was an old one. It was common in eighteenth century mercantilism and had been prominent in the writings of Thomas R. Malthus. Still, Hobson’s analysis did not allow for the possibility that some saving could “get lost.” He explicitly assumed (as did most contemporary economists) that saving would embody itself in expanded facilities of production, but that these would be redundant or misplaced.
Hobson was a prolific writer, lecturer, and political activist. His was one of many voices (others included Henry George and the Fabian Socialists) deploring the many harsh features of contemporary economic conditions. His work, however, did not impress the professional economists of the times because his theoretical analysis was superficial, and he did not go far enough in presenting empirical evidence for his positions. Still, his work did influence some very powerful people. Bolshevik leader Vladimir Ilich Lenin read and praised Hobson’s book in his own Imperializm, kak noveyshy etap kapitalizma (1917; Imperialism: The Latest Stage in the Development of Capitalism, 1924).
Hobson’s book was a startlingly perceptive anticipation of many major developments that came later in the twentieth century. The imperialism he deplored was a major factor in the unfolding of World War I, and the spirit of benevolent internationalism that he consistently displayed led to the creation of the League of Nations, the United Nations, and the internationalization of foreign economic aid and investment. He foresaw the difficulties that colonial territories would face when liberated, and he wrote an especially sensitive and perceptive analysis of imperialism in Asia, anticipating the types of conditions that would appear in daily headlines in the twenty-first century:
China might turn the tables upon the Western industrial nations, and, either by adopting their capital and organizers or . . . by substituting her own, might flood their markets with her cheaper manufactures, and refusing their imports in exchange might take her payment in liens upon their capital, reversing the earlier process of investment until she gradually obtained financial control over her [former] patrons and civilizers.
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Allett, John. New Liberalism: The Political Economy of J. A. Hobson. Toronto: University of Toronto Press, 1981. Gives a broad view of Hobson, discussing his social and political philosophy as well as his narrowly focused economic ideas. -
Cain, P. J. Hobson and Imperialism: Radicalism, New Liberalism, and Finance 1887-1938. New York: Oxford University Press, 2002. Brings the subject up to date, documenting the renewed interest in Hobson’s work in the early years of the twenty-first century. In chapter 6, Cain argues that the 1902 book was only a small and transitory part of Hobson’s views on imperialism, and he struggled with contradictory attitudes toward it. -
Hobson, John A. Imperialism: A Study. 1902. Reprint. London: Unwin Hyman, 1988. Reprint by the original publisher, with an excellent introduction by J. Townshend placing this book in the context of Hobson’s life and enormous published output. -
Lutz, Mark A. Economics for the Common Good: Two Centuries of Social Economic Thought in the Humanistic Tradition. New York: Routledge, 1999. Chapter 4 is on Hobson, and it leads into a wide-ranging analysis of the interplay between narrow economics and broad social and psychological dimensions of human welfare. -
Porter, Bernard. Critics of Empire: British Radical Attitudes to Colonialism in Africa, 1895-1914. New York: Cambridge University Press, 1968. Places Hobson’s critique of British policy in the context of the times. -
Schneider, Michael. J. A. Hobson. New York: St. Martin’s Press, 1996. A concise study focused on Hobson as an economist. Valuable in describing reactions to his work and subsequent empirical studies of aspects of imperialism. The economic analysis is sometimes overly technical.
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