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

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The theory that we may be compelled to fight for the very existence of our Empire against some combination of European powers, which is now used to scare the nation into a definite and irretrievable reversal of our military and commercial policy, signifies nothing else than the intention of the imperialist interests to continue their reckless career of annexation.31
Thus, investors use both international and domestic political issues to perpetuate their imperialistic policies.

Hobson points to another force, social concerns, but this force actually runs counter to those of economics and its subordinate forces. Hobson states that imperialism often aims to stop social reform because, to the chagrin of the investors, social reform can eliminate their excessive savings at home instead of abroad where they would be more profitably invested. The main social reforms Hobson discusses are raising wages or increasing public taxation - especially of the wealthy - and government expenditure. These reforms destroy the impetus for imperialism by solving the problem of under-consumption and over-production. As aforementioned, Hobson believes that imperialism results from investors wishing to fully employ their excess savings in an area with a high rate of return. By increasing taxation of the wealthy or the buying power of the working class, Hobson believes that the investors' excess savings would be employed at home and under-consumption would disappear. Without excess savings, there is no need to go abroad with investments, and thus no imperialism will occur.32 It is better for society, argues Hobson, if these savings are consumed by social reform. He states:
If, by some economic readjustment, the products which flow from the surplus saving of the rich . . . could be diverted so as to raise the incomes and the standard of consumption of the inefficient fourth [that percentage of the population with a living standard below bare efficiency], there


31. Ibid., 129.
32. Ibid., 89-90.
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