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J. A. Hobson (1858–1940)

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Economic Exiles

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Abstract

Those economic dissidents who rejoice in their status as heretics are few indeed. One such was John Atkinson Hobson, whose early exclusion from academia neither embittered nor silenced him. Towards the end of a long and immensely productive life, which saw the publication of no fewer than fifty-three books in forty-nine years, Hobson wrote his memoirs. Confessions of an Economic Heretic has been described as ‘perhaps the most reticent autobiography ever written’1 and in some ways its title is its most revealing feature, demonstrating that this modest, friendly and cheerful man, now approaching his eightieth birthday, was still proud to proclaim his heterodoxy.2 Ironically, it was at this late stage (Confessions appeared in 1938) that Hobson was closer to the economic mainstream than ever before — or since.

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Notes

  1. H. N. Brailsford, The Life-Work of J. A. Hobson (London: Oxford University Press, 1948), p. 5.

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  2. G. D. H. Cole, obituary, Economic Journal 50, 1940, pp. 351–60 (this contains the best brief character sketch of Hobson).

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  3. J. Allett, New Liberalism: The Political Economy of J. A. Hobson (Toronto: University of Toronto Press, 1981);

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  4. P. F. Clarke, ‘Introduction’ to J. A. Hobson, The Crisis of Liberalism (Hassocks: Harvester Press, 1974; first published 1909), pp. ix–xxxviii;

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  5. E. E. Nemmers, Hobson and Underconsumptionism (Amsterdam: North-Holland, 1956).

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  6. Brailsford, op. cit., p. 3.

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  7. M. Freeden, ‘J. A. Hobson as a New Liberal Theorist: Some Aspects of His Social Thought Until 1914’, Journal of the History of Ideas 34, 1973, p. 432;

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  8. see also P. F. Clarke, Liberals and Social Democrats (Cambridge: Cambridge University Press, 1978) and

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  9. M. Freeden, The New Liberalism: an Ideology of Social Reform (Oxford: Clarendon Press, 1978).

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  10. J. A. Schumpeter, A History of Economic Analysis (London: Allen & Unwin, 1954), p. 832, n. 5.

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  11. C. Delisle Burns, ‘John A. Hobson’, New Statesman and Nation, 6 April 1940, p. 459.

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  12. A. F. Mummery, My Climbs in the Alps and Caucasus (London: Fisher Unwin, second edn, 1908), which includes an appreciation by Hobson;

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  13. W. Unsworth, Tiger in the Snow: the Life of A. F. Mummery (London: Gollancz, 1967).

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  14. A. F. Mummery and J. A. Hobson, The Physiology of Industry (New York: Kelley, 1971; first published 1889), pp. iii, v.

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  15. Ibid., pp. 45–6, 113, 118–32.

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  16. Ibid., pp. 112–13, 180–2, 186–201; cf.

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  18. Ibid., pp. 98–9;

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  19. a formal Hobsonian model is developed by M. P. Schneider, ‘A Model of Underconsumption Theories’, mimeo., Melbourne, 1982; and

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  20. a. Schneider, ‘Underconsumption and Imperialism: A Study in the Work of J. A. Hobson’, unpublished M.Sc. dissertation, University of Cambridge, 1959, ch.l.

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  21. S. Webb, ‘The Rate of Interest and the Laws of Distribution’, Quarterly Journal of Economics 2, 1888, pp. 188–208;

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  22. see also D. M. Ricci, ‘Fabian Socialism: a Theory of Rent as Exploitation’, Journal of British Studies 9, 1969, pp. 105–21.

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  23. S. Webb, ‘The Rate of Interest’, ibid., p. 472.

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  24. J. A. Hobson, ‘The Law of the Three Rents’, Quarterly Journal of Economics 5, 1891, pp. 263–88;

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  25. ‘The Element of Monopoly in Prices’, ibid., 6, 1891, pp. 1–24.

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  26. J. A. Hobson, The Economics of Distribution (Clifton, N.J.: Kelley, 1972; first published 1900), ch. 4;

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  27. F. Y. Edgeworth, Papers Relating to Political Economy (London: Macmillan for the Royal Economic Society, 1925), I, p. 19, n. 3 and II, pp. 382–4;

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  28. J. A. Hobson, ‘Marginal Units in the Theory of Distribution’, Journal of Political Economy 12, 1904, pp. 449–72;

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  29. T. N. Carver, ‘The Marginal Theory of Distribution’, ibid., 13, 1905, pp. 257–66;

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  30. Hobson, ‘The Marginal Theory of Distribution: a Reply to Professor Carver’, ibid., pp. 587–90.

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  31. See also J. L. Laughlin, ‘Hobson’s Theory of Distribution’, ibid., 12, 1904, pp. 305–26.

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  32. J. A. Hobson, The War in South Africa, Its Causes and Effects (New York: Garland Publishing, Inc., 1972; first published 1900), pp. 189, 197, 231; cf.

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  33. a Hobson, ‘Free Trade and Foreign Policy’, Contemporary Review 74, 1898, pp. 169–76.

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  34. P. J. Cain, ‘Hobson, Wilshire and the Capitalist Theory of Capitalist Imperialism’, History of Political Economy 17, 1985, pp. 455–60.

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  35. J. A. Hobson, Imperialism: a Study (London: Allen & Unwin, 1961; first published 1902), p 38.

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  36. Ibid., pp. 39–40.

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  37. Ibid., pp. 46–51.

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  38. Ibid., pp. 53–4.

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  39. Hobson quotes the American socialist H. Gaylord Wilshire, whose significance is emphasised by N. Etherington, ‘The Capitalist Theory of Capitalist Imperialism’, History of Political Economy 15, 1983, pp. 38–62.

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  40. See also C. P. Parrini and M. J. Sklar, ‘New Thinking About the Market, 1896–1904: Some American Economists On Investment and the Theory of Surplus Capital’, Journal of Economic History 43, 1983, pp. 559–78.

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  41. Imperialism, pp. 74–81. In 1904 Hobson published a technical analysis of dumping which foreshadows the theory of price discrimination in Joan Robinson’s Economics of Imperfect Competition, which appeared in 1933.

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  42. See W. P. Culbertson Jr and R. B. Eklund Jr, ‘John A. Hobson and the Theory of Discriminating Monopoly’, History of Political Economy 9, 1977, pp. 273–82.

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  43. Imperialism, p. 83; cf. a Hobson, The Problem of the Unemployed (London: Methuen, 1896);

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  44. Hobson, ‘Free Trade and Foreign Policy’, Contemporary Review 74, 1898, pp. 167–80.

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  45. The inconsistency is noted but not (perhaps) sufficiently stressed by N. Etherington, Theories of Imperialism: War, Conquest and Capital (Beckenham: Croom Helm, 1984), pp. 69–70;

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  46. H. Mitchell, ‘Hobson Revisited’, Journal of the History of Ideas 26, 1965, p. 409; and

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  47. B. Porter, Critics of Empire: British Radical Attitudes to Colonialism in Africa 1895–1914 (London: Macmillan, 1968), pp. 215–19.

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  48. The first and by far the best Marxist analysis is that of R. Hilferding, Finance Capital (London: Routledge & Kegan Paul, 1981; first published in German in 1910), part V.

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  49. Nemmers, op. cit., p. 49,

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  50. citing J. A. Hobson, The Economic Interpretation of Investment (London: Financial Review of Reviews, 1911).

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  51. See also J. A. Hobson, The Science of Wealth (London: Williams and Norgate, 1911), p. 240.

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  53. P. F. Clarke, ‘Hobson, Free Trade, and Imperialism’, ibid., 34, 1981, pp. 308–12;

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  55. Nemmers, op. cit., p. 50.

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  56. D. K. Fieldhouse, ‘Imperialism: an Historiographical Revision’, Economic History Review n.s. 24, 1961, pp. 187–209; cf. Schneider, ‘Underconsumption and Imperialism,’ chapters 3–4.

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  57. Porter, op. cit., pp. 217–19.

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  58. J. A. Hobson, The Industrial System: an Inquiry Into Earned and Unearned Income (London: Longman, Green & Co., second edn, 1910), ch. IV; cf. The Science of Wealth, ch. V.

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  59. J. A. Hobson, John Ruskin, Social Reformer (London: James Nisbet, 1898).

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  60. J. A. Hobson, ‘Ruskin as Political Economist’, pp. 83–98 of J. H. Whitehouse (ed.), Ruskin the Prophet and Other Centenary Essays (London: Allen & Unwin, 1920).

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  61. Ibid., pp. 88, 93–4.

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  62. J. A. Hobson, Free Thought in the Social Sciences (New York: Macmillan, 1926), p. 64.

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  63. J. A. Hobson, Wealth and Life: a Study in Values (London: Macmillan, 1930), p. xiii.

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  64. Ibid., pp. xiii, xviii, 103, 108–9.

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  65. Ibid., pp. vii–xxi.

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  66. Ibid., pp. 16, 73, 103, 136–7.

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  67. Ibid., p. 108;

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  68. cf. N. Merkowich, ‘The Economics of John A. Hobson’, Indian Journal of Economics 23, 1942, pp. 175–85, who also points to the similarities between Hobson’s views and those of Henry Sidgwick in his Elements of Politics.

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  69. J. A. Hobson, ‘Britain’s Economic Outlook on Europe’, Journal of Political Economy 30, 1922, pp. 469–93.

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  70. J. A. Hobson, The Economics of Unemployment (London: Allen & Unwin, 1922), pp. 14–23, 32, 52–5.

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  71. See his ‘Notes on Over-saving’ (1931), in The Collected Works of John Maynard Keynes, volume XIII (London: Macmillan, 1973), pp. 330–1; and

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  72. Hobson, ‘Underconsumption: an Exposition and a Reply’, Economica 13, 1933, pp. 402–17.

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  73. Economics of Unemployment, pp. 28, 66, 119–27; cf. Hobson, ‘The Douglas Theory’, Socialist Review, February 1922, pp. 70–7, and

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  74. ‘A Rejoinder to Major Douglas’, ibid., April 1922, pp. 194–9.

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  75. H. N. Brailsford, J. A. Hobson, A. Creech Jones and E. F. Wise, The Living Wage (London: Independent Labour Party, 1926).

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  76. Economics of Unemployment, pp. 100–4; cf. Hobson, ‘Can England Keep Her Trade?’ National Review 18, 1891, pp. 1–11.

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  77. Hobson’s early interest in de-industrialisation has been emphasised by P. J. Cain, ‘International Trade and Economic Development in the Work of J. A. Hobson Before 1914’, History of Political Economy 11, 1979, pp. 406–24; and

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  78. ‘J. A. Hobson, Financial Capitalism and Imperialism in Late Victorian and Edwardian England’, Journal of Imperial and Commonwealth History 13, 1985, pp. 1–27.

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  79. J. A. Hobson, Rationalisation and Unemployment: an Economic Dilemma (London: Allen & Unwin 1930), pp. 117–24, 134–5.

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  80. Ibid., pp. 65–81, 92–100.

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  81. Ibid., p. 136.

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  83. Allett, op. cit., pp. 10–11.

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  84. See also F. Y. Edgeworth, Papers Relating to Political Economy (London: Macmillan for the Royal Economic Society, 1925), pp. 19, 382–4. For an explanation of the vehemence of Edgworth’s reaction see Schneider, ‘Underconsumption and Imperialism’, pp. 14–22.

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  85. Allett, op. cit., p. 11.

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  86. Ibid., p. 11n;

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  87. Hobson, Confessions of an Economic Heretic (London: Allen & Unwin, 1938), pp. 30–1.

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  89. A. W. Flux, ibid., 10, 1900, pp. 380–5;

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  90. C. F. Bastable, ibid., 14, 1904, pp. 609–12;

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  91. E. J. Urwick, ibid., 19, 1909, pp. 441–4. The Hobson archive at the University of Hull contains (file no. 22) reviews of The Industrial System by Price, journal unidentified, September 1909, pp. 638–42;

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  92. S. J. Chapman, Manchester Guardian, 24 May 1909;

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  93. E. J. Urwick, Morning Leader, 19 May 1909 (much less critical than his subsequent review in the Economic Journal); and

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  94. A. Landry, Revue d’Économie Politique 1, 1911, p. 134.

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  95. J. M. Keynes, Economic Journal 23, 1913, pp. 393–8;

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  96. E. Cannan, ibid., 26, 1916, pp. 365–8.

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  97. E. B[ernstein], Die Neue Zeit 1893–4, pp. 504–7 and 1896–7, pp. 500–2 (both in the Hobson archive at Hull University).

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  98. V. I. Lenin, Collected Works, volume 4 (London: Lawrence & Wishart, 1960), pp. 100–3.

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  99. Personal communication from Malcolm W. Rutherford; see also A. W. Coats, ‘The American Economic Association 1904–1929’, American Economic Review 54, 1964, pp. 261–85; and

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  100. W. E. Minchinton, ‘Hobson, Veblen and America’, Bulletin of the British Association for American Studies 8, 1959, pp. 29–34.

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  101. Allett, op. cit., pp. 13, 30.

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  102. The former on the grounds that Hobson had confused average and marginal productivity, with the latter accusing him of taking too theoretical an approach to distribution analysis: T. N. Carver, ‘The Marginal Theory of Distribution’, Journal of Political Economy 13, 1905, pp. 257–66;

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  107. cf. Etherington, Theories, op. cit., ch. 6.

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  108. R. P. Dutt, Socialism and the Living Wage (London: Communist Party of Great Britain, 1927).

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  112. See also P. T. Homan, Contemporary Economic Thought (New York: Harper, 1928), pp. 293–374.

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  114. M. Rutherford, ‘Institutionalism, Underconsumptionism and J. A. Hobson’ (mimeo., Victoria, B.C., 1985), who notes that this influence was two-way, Hobson owing more to Veblen (and possibly less to Marshall) than his writings would lead one to expect.

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  117. Keynes to Hobson, 2 October 1931; Hobson to Keynes, 14 October 1931, in ibid., pp. 333–5.

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  118. For a discussion of Hobson and Keynes to the former’s advantage see Clarke, ‘Introduction’, pp. xxvi–xxvii, and

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  1. University of Lancaster, UK

    J. E. King (Senior Lecturer in Economics)

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© 1988 J. E. King

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King, J.E. (1988). J. A. Hobson (1858–1940). In: Economic Exiles. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-07743-4_6

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