John Atkinson Hobson – Economipedia

John Atkinson Hobson (1858-1940) was a British politician and economist. Hobson is especially known for his work on the relationship between imperialism and economics.

Interestingly, both Hobson and Lenin addressed the phenomenon of imperialism and, consequently, also colonialism. Now, if Hobson proposed a reformist approach, Lenin intended to end capitalism through revolutionary actions.

Training and professional and political career of John Atkinson Hobson

Born in the English town of Derby in 1858, John Atkinson Hobson obtained his degree in Economics from the University of Oxford in 1887. As part of his teaching career, he taught English literature and economics at the university level.

Among his most important works is The Physiology of Industry, where he analyzes the theory of underconsumption. This work would later inspire the British economist John Maynard Keynes when studying unemployment.

Through his work “Imperialism”, Hobson analyzed the economic impact of colonialism and the investment of the surplus. On the other hand, in “The industrial system” he exposed how it was the demand of consumption that marked the production of the industry.

Regarding his political ideas, it should be noted that Hobson was a member of the Independent Labor Party in 1919.

Hobson, capitalism and the workers

Both Hobson and Lenin have been highly critical of imperialism. However, Lenin proposed a socialist revolution to end capitalism. On the contrary, Hobson, of a liberal nature and closer to social democracy, advocated implementing reformist measures.

Contrary to the theses of traditional liberals, Hobson argues that workers are free to sell their work to employers, making it clear that the employer does not hold power unilaterally.

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Furthermore, Hobson was also a staunch supporter of the minimum wage. Thus, Hobson argued that a minimum wage was essential to ensure minimum conditions of subsistence and dignity.

John Atkinson Hobson’s Theory of Underconsumption

Also in relation to wages, Hobson stated that excessively low wages will not allow a response to the offer. This supposes that there are enormous economic resources saved, idle, that do not flow to the economy and that, therefore, cause a situation of underconsumption.

In other words, the economic elites are accumulating large amounts of money that they do not use. This hoarding of wealth generates an unequal distribution and prevents satisfying the consumption needs of the poorest.

To respond to this problem, it is necessary to release idle economic resources. All this leads to a political and military expansionism to overseas territories to dispose of those huge amounts of saved capital.

In conclusion, Hobson explains imperialism by pointing out that the stagnation and excessive savings of the metropolis leads the capitalists to expand into new territories.

imperialism and economy

It is precisely poverty and the unequal distribution of wealth generated in the metropolis that drives colonialism. For this reason, Hobson points out that Great Britain would not have experienced a great colonial expansion if it had better distributed the wealth among its inhabitants.

Nor should we forget that Britain’s trade with its colonies did not offset the high cost of maintaining a large colonial empire. In fact, through statistical studies, Hobson came to determine that Britain’s trade with the colonies was marginal compared to trade with the European states.

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On the contrary, Hobson argued that if the purchasing power of the inhabitants of the metropolis increased, colonial expansion would not be necessary.

Hobson pointed out that some elites take control of national resources and that they subordinate the interests of the country to their personal interests. In this sense, to align the interests of the people with the interests of the privileged, the privileged appealed to national feelings.

In this imperialist drift of expansion to new territories, the groups that concentrate the wealth will convince the ruling classes through a network of common interests.

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