2010
It is believed that the word “imperialism” is derived from “imperium” which is a Roman concept of “power and control” in brief. It became a widespread word starting in the late 19th century with European Monarchs and their colonial actions until their collapses at the end of the World War I. What defines a state as imperial is her ability and capability to dominate other territories and lands. The term is used not only for the colonial or territorial policies but also military and economic influence and not necessarily a legal one. In this paper, you will find two similar but also different explanations of imperialism by two prominent thinkers of early 19th century: J. A. Hobson and V. I. Lenin. It is usually said that Lenin was influenced by Hobson but the motives they underline for imperialism are significantly different.
In his article, “The Economic Taproot of Imperialism”, J. A. Hobson discusses the driving force of imperialism which is, in brief, the seek for new markets as a result of unequal distribution of wealth and underconsumption. To explain the link between capitalism and imperialism, he shows the historical process of United Kingdom and other colonialists in 19th century. Until 1870, UK had great impact over a large part of the world, which are generally the Commonwealth countries, and she found it unnecessary to be “more imperial” before the entrance of United States, Belgium and Germany to the competition of external trade. These three countries made economic relations even with Commonwealth countries and as a result of decreasing number of trade numbers, there appeared a need for new markets for UK.
But the question is why these economically (and also militarily) powerful nations needed to trade abroad and sell their goods to foreign people instead of the using them in the domestic market? The answer lies in the accumulation of wealth among a few people and poverty among the rest as a result of the fundamentals of capitalism. As the surplus value made bourgeoisie wealthier, the concept of underconsumption occurred due to the fact that goods were not as purchasable as before for the masses. He writes: “The power of production far outstripped the actual rate of consumption, and, contrary to the older economic theory, was unable to force a corresponding increase of consumption by lowering prices”. So the motivation to sell their goods abroad makes capitalist countries act imperially to further their cycle of production.
Comparatively low wages of workers, accumulation of surplus capital and underconsumption as a result seem to be reasons for imperial powers but was not there any options other than influencing other territories with diplomacy or annexation? According to Hobson, in the imperialist view, the necessity of capturing foreign markets is a fatal one as if they do not, some other will do to export its goods. “Imperialism is thus seen to be, not a choice, but a necessity” he claims. It is a very simple definition: If your domestic market is not wealthy enough to purchase your goods, you are obliged to sell them abroad by annexing territories that are undeveloped and in need of your goods.
V. I. Lenin, who is said to be influenced by Hobson, explains the motives of imperialism with moving finance capital to other countries that are not among the richest. According to him, imperialism is the highest stage of capitalism and world’s leading countries are dominating others with the help of trusts and loans. Thanks to the support of the governments, capitalists invest abroad to escape the declining rates of profit in national territories. To conceptualize his arguments, he divides the history of capitalism into two: First one is exporting goods which characterizes the old type of capitalism and the second one is exporting capital which signifies the modern capitalism or imperialism in other words.
He argues that the roots for the movement of finance capital lies in the monopolies of the capitalist system. Free competition is the first rule of capitalism where individuals can compete with one another. But the result of free competition is an environment that makes rich people richer and poor people poorer due to mostly the surplus value of workers. Therefore, according to Lenin, free competition transforms into a monopoly of few which are looking for new markets instead of a drained domestic market. But instead of direct military or political control to sell goods or to create new markets, Lenin claims that new capitalism brings the movement of finance capital. Thus one monopoly gives loans to a poor country and make it granted that loaned money will be used for railways, coaling stations etc to be constructed by the monopoly. Lenin underlines that this is imperialism, the last and highest stage of capitalism where banking system and industrial capital merge together for more and more domination.
Both thinkers argue that the accumulation of wealth and power is the reason for imperialism but they differ in the way it is done. Hobson claims that great powers dominate the others to export their goods in new and untouched markets. The motive of selling goods, which are not purchased due to the low level of wealth, shapes a suitable ground for imperialism. On the other hand, Lenin’s arguments on imperialism is based on the flow of the finance capital. According to him, when the monopolies cannot find any space to invest in domestic realm, they look for other territories to loan money in exchange for granting the money to be spent in their favor such as a construction work of a railway. In addition to Hobson’s colonial assumption, Lenin underlines that these monopolies of great powers compete and divide the world into territories in the sake of their own imperial aims. “Monopoly has grown out of colonial policy. To the numerous “old” motives of colonial policy, finance capital has added the struggle for the sources of raw materials, for the export of capital, for spheres of influence” he summarizes.
There are two critical points, one for each, that I can present. First one is for Hobson, who thinks that the growing surplus value and accumulation of wealth is the reason for colonial intentions. Unlike countries like United Kingdom, United States or Germany, countries that are not industrially developed such as Italy can also have colonial purposes. It is clear that Italy did not have the same amount of surplus value like US or UK had and still they did colonization with other motives. My second point will not be like a critic but more an observation of process which Lenin discussed. As Lenin explains the mentioned process is a race between monopolies to financially dominate poor countries but in the recent decades his ideas are replaced by the relation between developed and underdeveloped countries or core and periphery which is a argument that conflict between developed countries are disappearing.
To sum up, both Hobson and Lenin draw a conception of imperialism with similar bases but different tools. They both claim that accumulation of power and wealth is the base. However, Hobson insists that imperialism is the way for great powers to sell their products which are not purchased in national territories. On the other hand, Lenin also sees imperialism as the next chapter of capitalism but in a different perspective. According to him, imperialism comes into life with the flow of finance capital into other countries that are not in monopoly class. Lenin emphasizes that merge of banking and industrial sectors helps monopolistic powers to invest in places other than impoverished national ones.
It is believed that the word “imperialism” is derived from “imperium” which is a Roman concept of “power and control” in brief. It became a widespread word starting in the late 19th century with European Monarchs and their colonial actions until their collapses at the end of the World War I. What defines a state as imperial is her ability and capability to dominate other territories and lands. The term is used not only for the colonial or territorial policies but also military and economic influence and not necessarily a legal one. In this paper, you will find two similar but also different explanations of imperialism by two prominent thinkers of early 19th century: J. A. Hobson and V. I. Lenin. It is usually said that Lenin was influenced by Hobson but the motives they underline for imperialism are significantly different.
In his article, “The Economic Taproot of Imperialism”, J. A. Hobson discusses the driving force of imperialism which is, in brief, the seek for new markets as a result of unequal distribution of wealth and underconsumption. To explain the link between capitalism and imperialism, he shows the historical process of United Kingdom and other colonialists in 19th century. Until 1870, UK had great impact over a large part of the world, which are generally the Commonwealth countries, and she found it unnecessary to be “more imperial” before the entrance of United States, Belgium and Germany to the competition of external trade. These three countries made economic relations even with Commonwealth countries and as a result of decreasing number of trade numbers, there appeared a need for new markets for UK.
But the question is why these economically (and also militarily) powerful nations needed to trade abroad and sell their goods to foreign people instead of the using them in the domestic market? The answer lies in the accumulation of wealth among a few people and poverty among the rest as a result of the fundamentals of capitalism. As the surplus value made bourgeoisie wealthier, the concept of underconsumption occurred due to the fact that goods were not as purchasable as before for the masses. He writes: “The power of production far outstripped the actual rate of consumption, and, contrary to the older economic theory, was unable to force a corresponding increase of consumption by lowering prices”. So the motivation to sell their goods abroad makes capitalist countries act imperially to further their cycle of production.
Comparatively low wages of workers, accumulation of surplus capital and underconsumption as a result seem to be reasons for imperial powers but was not there any options other than influencing other territories with diplomacy or annexation? According to Hobson, in the imperialist view, the necessity of capturing foreign markets is a fatal one as if they do not, some other will do to export its goods. “Imperialism is thus seen to be, not a choice, but a necessity” he claims. It is a very simple definition: If your domestic market is not wealthy enough to purchase your goods, you are obliged to sell them abroad by annexing territories that are undeveloped and in need of your goods.
V. I. Lenin, who is said to be influenced by Hobson, explains the motives of imperialism with moving finance capital to other countries that are not among the richest. According to him, imperialism is the highest stage of capitalism and world’s leading countries are dominating others with the help of trusts and loans. Thanks to the support of the governments, capitalists invest abroad to escape the declining rates of profit in national territories. To conceptualize his arguments, he divides the history of capitalism into two: First one is exporting goods which characterizes the old type of capitalism and the second one is exporting capital which signifies the modern capitalism or imperialism in other words.
He argues that the roots for the movement of finance capital lies in the monopolies of the capitalist system. Free competition is the first rule of capitalism where individuals can compete with one another. But the result of free competition is an environment that makes rich people richer and poor people poorer due to mostly the surplus value of workers. Therefore, according to Lenin, free competition transforms into a monopoly of few which are looking for new markets instead of a drained domestic market. But instead of direct military or political control to sell goods or to create new markets, Lenin claims that new capitalism brings the movement of finance capital. Thus one monopoly gives loans to a poor country and make it granted that loaned money will be used for railways, coaling stations etc to be constructed by the monopoly. Lenin underlines that this is imperialism, the last and highest stage of capitalism where banking system and industrial capital merge together for more and more domination.
Both thinkers argue that the accumulation of wealth and power is the reason for imperialism but they differ in the way it is done. Hobson claims that great powers dominate the others to export their goods in new and untouched markets. The motive of selling goods, which are not purchased due to the low level of wealth, shapes a suitable ground for imperialism. On the other hand, Lenin’s arguments on imperialism is based on the flow of the finance capital. According to him, when the monopolies cannot find any space to invest in domestic realm, they look for other territories to loan money in exchange for granting the money to be spent in their favor such as a construction work of a railway. In addition to Hobson’s colonial assumption, Lenin underlines that these monopolies of great powers compete and divide the world into territories in the sake of their own imperial aims. “Monopoly has grown out of colonial policy. To the numerous “old” motives of colonial policy, finance capital has added the struggle for the sources of raw materials, for the export of capital, for spheres of influence” he summarizes.
There are two critical points, one for each, that I can present. First one is for Hobson, who thinks that the growing surplus value and accumulation of wealth is the reason for colonial intentions. Unlike countries like United Kingdom, United States or Germany, countries that are not industrially developed such as Italy can also have colonial purposes. It is clear that Italy did not have the same amount of surplus value like US or UK had and still they did colonization with other motives. My second point will not be like a critic but more an observation of process which Lenin discussed. As Lenin explains the mentioned process is a race between monopolies to financially dominate poor countries but in the recent decades his ideas are replaced by the relation between developed and underdeveloped countries or core and periphery which is a argument that conflict between developed countries are disappearing.
To sum up, both Hobson and Lenin draw a conception of imperialism with similar bases but different tools. They both claim that accumulation of power and wealth is the base. However, Hobson insists that imperialism is the way for great powers to sell their products which are not purchased in national territories. On the other hand, Lenin also sees imperialism as the next chapter of capitalism but in a different perspective. According to him, imperialism comes into life with the flow of finance capital into other countries that are not in monopoly class. Lenin emphasizes that merge of banking and industrial sectors helps monopolistic powers to invest in places other than impoverished national ones.
