Imperialism

"A classic on imperialism, published a hundred years ago. It shows how unequal distribution of income in the metropole implied a high concentration of free (investable) financial capital in the hands of few people, and a drift toward imperialism. The rich who own these free financial resources are in a search of more profitable opportunities than the domestic markets can offer, and they gradually invest more abroad. They have to invest outside home. By doing this they also provide the political underpinnings of colonial expansion because safety of their capital requires political control of these new markets. Thus colonies are born. You have to explain that the logic of expansion is always internally driven. Hobson combines the issues of domestic inequality, lack of domestic aggregate demand (because of insufficient ‘trickle down’ among middle and lower classes) and shows how an aggressive external policy develops to respond to these financial needs. Get the weekly Five Books newsletter It’s interesting today because we do seem to have a similar constellation of forces to those that existed in 1902 when Hobson’s book was published. You need control over raw materials, oil and other things – so in that sense aggression is internally driven. External decisions are made in response to internal need. The similarities between these two periods are uncanny. We have a huge concentration of financial assets in the hands of relatively few people. As we know, few people dominate politics because they fund the politicians. The system is driven by the people with money because you cannot do politics unless somebody pays for you to do it. These people contribute millions to the campaigns of both parties and they aren’t doing it out of charity. They want something. When we look at the aggressive policies in Afghanistan or Iraq we must remember that there are people who are benefiting from them – the most obvious are the arms contractors who have made billions of dollars. Hopefully the sequel which Hobson foreshadowed – the struggle of various imperial powers for world dominance – will not lead the world to a repeat of 1914-18. Yes. The people who go and fight wars, if you look at the US, are often not even US citizens but are trying to get citizenship or good pay, and you have taxpayers funding the war and the rich are benefiting. So the burdens are interestingly distributed. One group of people dies, another group funds it and a third group makes money. It’s a simplification, but it is true that some rich people have become even richer because of a war. Hobson is the first to explain the dynamic of imperialism a hundred years ago and I think his book is very topical still now."