Brian Blaylock
Econ 442 – Dr. Malamud
April 14, 2008
Imperialism
Imperialism refers to both “the forceful extension of a nation’s authority by territorial conquest establishing economic and political domination of other nations” and an “imperialistic attitude of superiority, subordination, and dominion over foreign peoples.” (Wikipedia.org) In this paper, I will confine my research to economists’ attitudes toward the former, especially those of Hobson, Lenin, and Schumpeter. Of these three, Hobson was the first to relate imperialism to capitalism.
John Atkinson Hobson was an accomplished English author, journalist, historian, and economist who lived from 1858 to 1940. Although he taught at the London School of Economics, among other schools, his criticism “of the materialist methodology of both Classical and Neoclassical economics” made him an outsider among his academic contemporaries. (Cepa.newschool.edu/het) “(H)ounded first by the Classical and then the Marshallian orthodoxy, Hobson never attained an academic post, was basically barred from the Political Economy Club and ceaselessly ridiculed in that bastion of Marshallian thought, the EconomicJournal.” (Cepa.newschool.edu/het) In the very late 19th century, Hobson travelled to South Africa to cover the Second Boer War for a British newspaper. It was in the course of reporting on the horrors of this conflict that Hobson first began to draw the conclusions that led him to become one of imperialism’s strongest critics. (Wikipedia.org)
In 1902, Hobson published Imperialism, A Study, which details his criticisms of imperialism, both as an economic and foreign policy. Throughout the book, Hobson is careful to distinguish the imperialism of his day from the nationalist policies of the earlier 19th century, which Hobson regarded as benign, if not idyllic. Contrasting these policies in his introduction, Hobson writes that while “(t)he older nationalism was primarily an inclusive sentiment, … (t)he overflow of nationalism into imperial channels … (has become) a constant agent of menace and of perturbation to the peace and progress of mankind.” (Hobson 11)
Hobson concludes that it is capitalism’s necessary search for additional markets and external opportunities for investment that serve as the root cause of imperialism. Hobson further concludes that while, as an economic policy, imperialism is very much a net negative for Britain, its gains are highly concentrated among certain influential groups within British society. This is summarized in Part 1, Chapter 4, where Hobson writes:
“Although the new Imperialism has been bad business for the nation, it has been good business for certain classes and certain trades within the nation. The vast expenditure on armaments, the costly wars, the grave risks and embarrassments of foreign policy, the checks upon political and social reforms within Great Britain, though fraught with great injury to the nation, have served well the present business interests of certain industries and professions.” (Hobson 46)
Hobson’s assessment of the situation in Britain at the start of the twentieth century may hold particular significance for individuals that question the wisdom of the United States’ current position in the Middle East or the nation’s foreign policy in general. Though it is not within the scope of this paper to fully evaluate any potential relevance of Hobson’s conclusions regarding European imperialism of the very early twentieth century as they may (or may not) apply to American foreign policy of the very early twenty-first century, it is at least interesting to note the potential for comparison.
For his criticism of imperialistic foreign and economic policies, Hobson is often referred to as a Marxist or Socialist, though this may be an oversimplification. ( Actually Marx, for all his writings regarding class struggle as an inescapable feature of economic history, never published a formal theory of imperialism. Marx predicted capitalism’s eventual downfall as the inevitable result of crises stemming from its inherent contradictions. Briefly, Marx recognized that, in order to preserve her capital, the capitalist must continuously seek to expand her capital stock. However, because increased levels of capital lead to falling rates of profit andexacerbate capitalism’s existing class struggles, the ensuing overproduction or underconsumption crises will eventually prove capitalism’s undoing. (Malamud PPT 2-7)
Lenin expanded upon Marx’s framework of class struggle leading to crisis to create a theory of imperialism that he first published in 1916 in a work entitled Imperialism: The Highest Stage of Capitalism. Lenin theorizes that imperialism represents an attempt by capitalism to stave off its inevitable destruction by seeking external markets and sources of profit. Imperialism is said to represent a new, higher stage of capitalism;one wherein “over-ripe” capitalist nations attempt to hold Marx’s predicted crisis of shrinking domestic profits at bay by expanding their operations overseas. In their introduction to a 1996 edition of Lenin’s Imperialism, Norman Lewis and James Malone write that “Lenin grasped how the pronounced internationalization of economic life which ushered in the twentieth stemmed from the inability of capitalism to sustain itself in the old largely national manner. … Lenin argued that the need to export capital arose from the fact that in a ‘few countries’ capitalism has become ‘over-ripe’. As companies could not find a field for ‘profitable’ investment at home, they extended operations abroad.” (Lenin pg. XX)
Lenin goes on to explain that imperialism is capitalism with “five essential features:”
1)“The concentration of production and capital developed to such a high stage that it created monopolies which play a decisive role in economic life.”
2)“The merging of bank capital with industrial capital, and the creation, on the basis of this ‘finance capital’, of a ‘financial oligarchy’.”
3)“The export of capital, which has become extremely important, as distinguished from the export of commodities.”
4)“The formation of international capitalist monopolies which share the world among themselves.”
5)“The territorial division of the whole world among the greatest capitalist powers is completed.” (Lenin 90)
Schumpeter, who published “The Sociology of Imperialism” in 1919, viewed imperialism differently. Rather than the “highest stage” of capitalism, Schumpeter considered imperialism “the clear sign that pre-capitalistic (i.e. feudal) aspects survive in capitalism.” (Panarchy.org) Schumpeter views imperialism as the result of capitalists’ efforts to seek from the state protection from enemies, both foreign and domestic. To gain this protection, capitalists agree to serve the state and its interests; though, initially at least, the state’s interests and the capitalists’ interests do not coincide. The result of capitalists’ subservience to the interests of the state is that “nationalismand militarism, while not creatures of capitalism, become ‘capitalized’ and in the end draw their best energies from capitalism. Capitalism involves them in its working and thereby keeps them alive, politically as well as economically.” (“The Sociology of Imperialism”) Withhis observation regarding the capitalization of nationalism and militarism, Schumpeter could be said to be reinforcing Hobson’s earlier conclusion that imperialism provides substantial economic returns to “certain classes and certain trades within the nation.”
Whichever assessment of imperialism one favors, be it that of Hobson, Lenin, Schumpeter, or some other author, not herein discussed, the subject of imperialism’s causes and effects is one of enduring relevance within the field of economics. And as with all worthwhile subjects of economic inquiry, imperialism is likely to continue to lead very intelligent people to vastly different conclusions for many years to come.
Works Cited
Hobson, John A. Imperialism, A Study. Ann Arbor, MI: University of Michigan Press, 1965.
"John A. Hobson." Wikipedia. 31 Jan 2008 <
"John Atkinson Hobson, 1858-1940." The History of Economic Thought Website. The New School. 27 Mar 2008 <
"Joseph Schumpeter: State, Imperialism and Capitalism (1919)." 08 Mar 2008 <
Lenin, V.I. Imperialism: The Highest Stage of Capitalism. London: Junius Publications Ltd., 1996.
Malamud, Ph.D., Bernard. "Marx - Engels." Economics 442 - History of Economic Thought. University of Nevada, Las Vegas, Las Vegas, NV. Spring 2008.
Schumpeter, Joseph. "The Sociology of Imperialism." 1919.
"Topic: War, Colonialism, and Imperialism." www. econlib.org. The Library of Economics and Liberty. 27 Mar 2008 <