Tom Goldstein, "Economic Manipulation:
J.A. Hobson's Theory on the
Role of Economic and Other Forces in Imperialism"

7

capitalistic greed, Hobson says that these financiers refuse to allow their savings to be left at low rates of interest in Britain, so they begin searching abroad for places to invest. Finding that foreign markets in industrialized nations are suffering from a similar under-consumption, Hobson concludes that the financiers seek new, lucrative, yet risky areas of investment - Africa and Asia.13

Investing in Africa and Asia can be very lucrative, but it is also very risky, so the financiers seek to minimize their risks in any way possible. There is always the threat of native unrest, native refusal to cooperate, or the interference in those investments by other European powers. Hobson states that the main way that investors protect their investments is by manipulating the governments of their home nations. The financiers in all industrial nations have established a powerful and even controlling influence upon their governments, and they subsequently induce these governments to use their power to mitigate the risks to the investors. Hobson explains:

[The investors] secure the active co-operation of statesmen and of political cliques who wield the power of "parties," partly by associating them directly in their business schemes, partly by appealing to the conservative instincts of members of the possessing classes, whose vested interest and class dominance are best preserved by diverting the currents of political energy from domestic on to foreign politics.14
Governmental involvement often begins as military intervention to protect industrial sites in Africa or Asia, but eventually investors realize that the only true way to protect their investments from the native inhabitants and from other capitalist nations is to annex those territories. The result is imperialism, caused by the economic forces of over-production and under-consumption at home, which are in turn by-products of an overzealous modern


13. Ibid., 85.
14. Ibid., 212.
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