Profile Major Works Resources

John Atkinson Hobson,  1858-1940.

Portrait of J.A. Hobson

English historicist economist, underconsumption theorist and apostle of the "New Liberal" movement.

The son of a Liberal newspaper publisher in Derby, John A. Hobson was educated in the classics at Lincoln College, Oxford.  After graduating, he became a schoolteacher and a journalist. After moving to London in 1887, Hobson came into the circle of the Fabian socialists in London.  Although he contributed a couple of volumes (e.g. 1891, 1896) to the Fabians, he was too unenthused by Marxian theory and socialist schemes to remain a subscribing member.   

John A. Hobson, like his friend L.T. Hobhouse, was part of the "New Liberal" generation that recognized the deficiencies of laissez faire in addressing social problems.  At root, Hobson was still a liberal, to the end still a believer in free markets, a solid defender of free trade and highly suspicious of governments, but recognized that markets could not solve problems like poverty, education, and, most pertinently, general overproduction.  Hobson was thus a strange concoction, a market liberal associated to socialist schools, who managed to be simultaneously fond of both Richard Cobden and John Ruskin.  Hobson articulated an "organic" view of society, which saw free and realized individuals as essential to a healthy social organism.  In his memoirs, Hobson recalls reading Herbert Spencer's works in his youth as being the formative influence on his outlook.

Hobson was an accomplished author, journalist, historian, economist and critic of the materialist methodology of both Classical and Neoclassical economics.  In some ways, he is the closest thing to the American iconoclast Thorstein Veblen that the British Isles produced (Hobson would later write a panegyric volume on Veblen).  Professionally speaking, however, Hobson was ostracized.  Hounded by the Classical and then the Marshallian orthodoxy, Hobson never attained an academic post, living perennially on the margins of journalism and extension lecturing, and was basically barred from the Political Economy Club and ceaselessly ridiculed in that bastion of Marshallian thought, the Economic Journal.  Reputedly, the editor F.Y. Edgeworth regarded Hobson's works as on the same level as flat earth babble.

Hobson's fame today rests n his development of a theory of underconsumption (1889, with the businessman and mountaineer A.F. Mummery). Hobson rejected Say's Law - to an extent; he recognized that savings translated into investment, but investment spending itself contributed to future overproduction, so that capitalism would be gripped by chronic overproduction.   Hobson was one of the first economists since Malthus to articulate and defend an undercomponsumption theory of the trade cycle. John Maynard Keynes would later acknowledge Hobson as a precursor.  Hobson expanded upon this in his 1909 treatise on the Industrial System, probably his best economic treatise, where Hobson advocated practical schemes like redistributive taxation, welfare spending and nationalization of industry to deal with the problem.  Hobson's tract was reputedly influential upon Lloyd George's "people's budget" of 1909 - or certainly helped sell it.   His principal economic ideas were distilled in his slimmer Science of Wealth (1911).

Other significant economic contributions include Hobson's famous 1891 critique of the Classical theory of rent in the QJE.  His proposed generalization anticipated the Neoclassical "Marginal Productivity" theory of distribution by a couple of years. However, Hobson later (1909) disputed the "product exhaustion" thesis of that theory, a criticism which several contemporaries (such as Marshall) answered with difficulty.  Hobson's work on social welfare (e.g. 1901) was slightly better received in his day.  Hobson's stock has since risen, not only for the afore-mentioned contributions, but also for his "evolutionist" outlook on economy and society, from its early statements (e.g. 1894) to its later elaborations (esp. his 1914  Work and Wealth 1914 and its 1929 "update").

Hobson also extended his underconsumption thesis to his theory of imperialism.  . Hobson had worked as a journalist in South Africa for the Manchester Guardian on the eve of the Boer War, and upon his return published several a series of articles and books on imperialism and militarism.  Imperialism (1902) is perhaps his most famous book.  Its economic thesis on capitalism's search for new markets for overproduction (anticipating Rosa Luxemburg and Vladimir Lenin) is only part of it.  The bulk of it deals with the politics of it - in particular, to tackle the apparent anomaly that any produced surpluses can be easier gotten rid of by free trade than by the expense of imperialism.  Hobson concludes the impetus comes not from business as a whole, but more narrowly from the financial sector, from the managers of the oversaved fortunes.  They're not looking for markets for goods, but for outlets for speculative investment overseas, and that is facilitated by extending the political jurisdiction on the ground.  It is the financiers, Hobson accuses, by direct control of the press and indirect control of government, that whip up nations into jingoism and imperialist adventures. 

Hobson opposed World War I, but also opposed the post-war settlement, and was critical of both the Treaty of Versailles and the League of Nations.  Like many of the New Liberal generation, Hobson eventually abandoned the Liberals (over their abandonment of free trade principles), and, holding his nose, joined the Labour Party in 1919. After this period, that Hobson's reputation had a lift. Although his general underconsumptionist thesis remained unchanged, his audience has had changed their opinions in the post-war years and his works were reviewed more favorably than before.

John A. Hobson lived long enough to see the advent of the Keynesian Revolution, and wrote his memoirs (1938) with some satisfaction in vindication.

 

  


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Major Works of John A. Hobson

  • The Physiology of Industry, being an exposure of certain fallacies in existing theories of economics, with A.F. Mummery, 1889. [bk, av]
  • Problems of Poverty, an inquiry into the industrial condition of the poor, 1891 [bk]
  • "The Law of the Three Rents", 1891, QJE, (Apr)  p.263-88 [js] [mrx]
  • "The Element of Monopoly in Prices", 1891, QJE (Oct)  p.1-24 [js, av] [mrx]
  • "The Influence of Machinery on Employment", 1893, PSQ [mrx]
  • The Evolution of Modern Capitalism: A study of machine production, 1894. [bk] [gut]
  • (Editor) Cooperative Labour upon Land, 1895 [av]
  • The Problem of the Unemployed: An enquiry and an economic policy, 1896 [bk] [1911 ed]
  • "Mr Kidd's Social Evolution", 1896, AJES [mrx]
  • "Collectivism in Industry", 1896, Progressive Review [mrx]
  • ["Nemo"] "The Ethics of Imperialism", 1897, Progressive Review
  • "Free trade and foreign policy", 1898, Contemporary Review (vol. 74, Aug), p.167
  • John Ruskin: Social Reformer. 1898. [bk, av]
  • The Economics of Distribution, 1900 [bk, av], [1903 repr, 1907 repr]
  • The War in South Africa: Its causes and effects, 1900 [bk]
  • "Capitalism and Imperialism in South Africa", 1900, Contemporary Review (Jan), p.1 [offpr]
  • The Psychology of Jingoism, 1901 [bk]
  • The Social Problem: Life and work, 1901 [bk, av]. [1902 repr]
  • "Compulsory Arbitration: A half-way house to socialism", 1902, North American Review, p.597
  • "Socialistic Imperialism", 1901, Intl Journal of Ethics, (v.12, Oct), p.44 [mrx]
  • "Ruskin and Democracy", 1902, Contemporary Review  (v.81, Jan) p.103
  • "A Re-statement of Democracy" 1902, Contemporary Review, (v.81, Feb) p.262
  • "Economic Taproot of Imperialism", 1902, Contemporary Review, (v.82, Aug) p.219
  • "The Scientific Basis of Imperialism", 1902, PSQ (Sep) [av] [mrx]
  • Imperialism: A study, 1902. [bk] [av] [mrx]
  • "The Inner Meaning of Protection", 1903, Contemporary Review, (v.84), p.365
  • "The Dynamics of Wages - Discussion", 1903, Pub AEA [mrx]
  • "The Mystery of Dumping", 1904, Contemporary Review, (v.85), p.186
  • International Trade: An application of economic theory, 1904 [bk]
  • "The American Trust", 1904, Econ Review, p.1
  • "Marginal Units in the Theory of Distribution", 1904, JPE, p.429 [av] [mrx]
  • "The Marginal Theory of Distribution: A reply to Professor Carver", 1905, JPE, p.587 [av] [mrx]
  • "The Fruits of American Protection : the effects of the Dingley tariff upon the industries of the country, and especially upon the well being of the people" [av]
  • Canada To-Day, 1906 [bk]
  • "The Ethics of Internationalism", 1906, Intl Journal of Ethics (Oct), p.16 [av]
  • The Industrial System: An inquiry into earned and unearned income, 1909. [1910 new ed, av]
  • The Crisis of Liberalism, new issues of democracy, 1909. [av]
  • "Marginal Productivity", 1910, Economic Review.
  • A Modern Outlook: studies of English and American tendencies, 1910 [av]
  • Science of Wealth, 1911. [bk]
  • An Economic Interpretation of Investment, 1911 [av]
  • Industrial Unrest, 1912
  • The German Panic, 1913 [av]
  • Gold, Prices and Wages, with an examination of the quantity theory, 1913. [av]
  • Work and Wealth: A human valuation, 1914. [bk, av], [1921 repr], [McM]
  • Traffic in Treason, A Study in Political Parties, 1914
  • Towards International Government, 1915 [bk, av]
  • Western Civilization, 1915
  • The New Protectionism, 1916 [bk, av]
  • Labour and the Costs of War, 1916
  • The Fight for Democracy, 1917 [av]
  • Democracy After the War, 1917.  [av]
  • ['Lucian'] 1920: Dips into the near future, 1920 [txt]
  • Richard Cobden, the international man,  1919 [bk] [av]
  • Taxation in the New State, 1919 [1920 repr]
  • "Why the War Came as a Surprise", 1920, PSQ, p.337 [offpr] [mrx]
  • The Morals of Economic Internationalism, 1920 [bk] [av]
  • The Obstacles to Economic Recovery in Europe, 1920
  • The Economics of Reparation, 1921 [av]
  • Problems of a New World, 1921 [bk, av]
  • The Economics of Unemployment, 1922 [av]
  • Incentives in the New Industrial Order, 1922 [av]
  • "Britain's Economic Outlook on Europe", 1922, JPE [mrx]
  • "Neo-Classical Economics in Britain", 1925, PSQ [mrx]
  • Free Thought in the Social Sciences, 1926.
  • The Living Wage, with H. N. Brailsford, A. Creech Jones, E.F. Wise, 1926.
  • Wealth and Life, 1929.
  • Rationalisation and Unemployment: An Economic Dilemma, 1930
  • God and Mammon, 1931
  • Poverty in Plenty: the ethics of income, 1931 [av]
  • L.T. Hobhouse: His life and work, with M. Ginsberg, 1931.
  • Saving and Spending: Why production is clogged, 1932
  • From Capitalism to Socialism, 1932
  • "Undercomsumption: An exposition", 1933, Economica [mrx]
  • Rationalism and Humanism, 1933
  • Democracy in a Changing Civilization, 1934
  • Veblen, 1936
  • "The Economics of Thorstein Veblen", 1937, PSQ [mrx]
  • Property and Improperty, 1937
  • Confessions of an Economic Heretic, 1938.

HET

 

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Resources on John A. Hobson

  • "Review of Howell's Trade Unionism and Hobson's Problems of Poverty" by SF Weston, 1892, PSQ (Jun), p.347 [js]
  • "Review of Hobson's Industrial System", by Alvin S. Johnson, 1911, AER, p.315 [js]
  • "Review of Hobson's Science of Wealth",  by Alvin S. Johnson, 1912, AER, p.605 [js]
  • "Review Hobson's Work and Wealth", by J.M. Clark, 1914, QJE  p.177 [js]
  • "Review of Hobson's Gold, Prices and Wealth" by Walter M. Adriance, 1914, AER p.667 [js]
  • "Review of Hobson's Work and Wealth" by Max Sylvius Handman, 1915, AER, p.314 [js]
  • "Review of Hobson's New Protectionism" by John Bruce McPherson, 1917, AER, p.885 [js]
  • "Review of Hobson's Democracy After the War", by H. G. Moulton, 1919, AER p.90 [js]
  • "The Douglas Theory: A reply to Mr. J.A. Hobson", by C.H. Douglas, 1921, Socialist Review [offp: av]
  • Hobson Page at McMaster
  • John A. Hobson Archive at Marxists.org
  • Hobson page at Spartacus
  • Hobson Page at Fordham.
  • Hobson page at Liberal International
  • Wikipedia

 

 
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