• one was a table showing a tremendous growth in the value of British overseas investments after 1870 (he gave no geographical breakdowns however);
  
• the second showed the increases in the area and population of additions to the British Empire in the same period.

1. if they invested in foreign areas and their investments became endangered by instability or bankruptcy, investors usually demanded that the government step in to save their investments (e.g., Egypt). This is the ‘Cat’s Paw’ argument. Financiers and capitalists were using gov’ts to pull their investment chestnuts out of the fire.
   
   
2. many areas did not provide many profitable opportunities for investments unless annexed as colonies; then, after annexation, the new colonies required railways, ports, etc. (Hobson pointed out that railway investments in India were guaranteed 5% interest by the Indian and British gov’ts while investments and British government bonds at home paid 2-2 l/2 %).
   
   

1. raise wages of workers; this would increase consumption (because workers had lots of needs and would spend the extra wages) and reduce overproduction. This might also reduce the incomes of the rich somewhat and relieve the pressure of excess savings.
   
   
2. raise taxes; this would again reduce excess savings and would allow increased services and social reform (education, etc.) which would provide employment and increased consumption.
   
   
3. as consumption rises, overproduction would disappear, more workers would be hired, etc.; companies would become profitable again and as they needed to expand, profitable investment opportunities would again arise at home. A ‘virtuous’ circle would be created. Imperialism would no longer be necessary.
   
   

1. almost all foreign investment was controlled by a very small number of financiers and capitalists; Hobson argued that almost every area of life and of the nation was being manipulated by this group for its own benefit.
   
   
2. the financiers (the engineers on the imperialist train) were assisted (aided and abetted) by a number of ‘harpies’ (arms manufacturers, the military, aristocratic families who provided governors and colonial officials) who also benefited and had careers from imperialism.
   
   
3. many groups and institutions were bought and corrupted by the above groups into supporting imperialism—the press, the schools, the churches, the gullible missionaries, professors, politicians.
   
   
4. Hobson even argued that imperialism tended to revive deep-seated and primitive urges (“blood-lust”) which centuries of civilisation had been reducing. He compared imperialism to the Roman circuses. The newspapers wallowed in colonial wars and imperial ventures.
   
   - imperialism encouraged ‘jingoistic’ nationalism which provoked wars (Hobson was bitterly opposed to the South African War).
   
   
5. all the nation was required to pay the very heavy costs of imperialism (wasted resources, higher taxes, lower standards of living, wars and lost lives) while only a few reaped the profits or the benefits.
   
   

• Hobson failed to break down the investment statistics geographically. When that is done, results are similar to trade statistics; i.e., most foreign investments were made in other European countries, in the U.S.A. and in the ‘white’ dominions—very little in the newly acquired colonies of the ‘new imperialism’.
  
  
• a relatively recent study of British overseas investments in the 1870-1914 period has contradicted Hobson’s assertions. This study claims that there were not huge amounts of savings being sent abroad. A substantial pool of overseas investment had built up by 1870; most of the increase in the value of overseas investments in the next 40 years or so was simply the effects of compounding, reinvestment of profits and increase in the value of assets held—not new savings.
  
  

1. Concentration of production and of capital developed to such a high stage that it created monopolies which became decisive in economic life.
   
2. The merging of bank capital with industrial capital and the creation, on the basis of this ‘finance capital’, of a ‘financial oligarchy’.
   
3. The export of capital as the most characteristic feature as distinguished from export of commodities.
   
4. The formation of international capitalist monopolies which share the world among themselves.
   
5. The territorial division of the whole world among the greatest capitalist powers is completed.
   
   

1. Investment capital did not in fact go in large quantities to colonies annexed in the ‘new imperialism’.
   
   
2. ‘Cat’s paw’ Argument (i.e., that capitalist investors used governments to salvage endangered investments; thus governments were tools of the capitalist imperialists). There are cases where this argument is plausible (Egypt is the best example). However, there are other examples where the opposite is true; governments sometimes encouraged (almost coerced) bankers and capitalists to make investments in order to give the government an excuse and justification for intervention (both France and Germany were doing this in Morocco during the period of the two Moroccan crises in the first decade of the 20th C).
   
   
3. ‘Monopoly Stage’—many Marxist arguments emphasise the development of monopolies, cartels, trusts, and tariffs. These developments arose primarily in Germany and the U.S.A.; they were not a prominent feature in France and were almost totally absent from Britain, the two most vigorous imperialist powers in the period! In fact, the amount of colonies acquired is almost opposite to the degree of these ‘monopoly’ elements.
   
   
4. Lenin and later Marxists redefined ‘imperialism’ to make it a further and unique stage of capitalism. This carries the assertion that the late 19th century empire expansionism was entirely different from any previous forms of expansionism (there had never been imperialism before); i.e., late 19th century expansionism had nothing in common with earlier empires or empire building. But, is the ‘new imperialism’ really so totally new and different from all other empires and expansionism?
   
   
5. Relative interest rates—Hobson argued that higher foreign investment returns were a proof of the push of capitalist investors for profitable investment returns. This argument can be turned around; the higher rates represent the need for incentives to persuade investors to send their money abroad. Thus, rather than investors pushing for overseas investments, they in fact had to be cajoled and bribed into making such investments.
   
   
6. Theoretical overkill—Marxist determinism insists that everything must be explained by economic factors; usually they start with the explanation (‘hypothesis’) and their ‘studies’ are not genuine attempts to test the hypothesis against the facts but merely to find the facts which fit their hypothesis (contrary facts frequently are ignored or dismissed as ‘illusory’). This is like Cinderella’s stepsisters who cut their feet to fit the shoe! Even when they do have valid evidence, they frequently tend to demand too much; thus, the economic element cannot be a factor, it must be the factor. While investments may have been a factor in some instances, it does not seem, in most cases, to be the only factor or even the most important factor.
   
   
7. Link between imperialism and World War I—Lenin especially argued that the war was a direct and logical outcome of imperialism. As we noted, Bukharin and others had argued that the war would come as a result of attempts to ‘repartition’ the world. Most non-Marxist historians reject this connection and argue that the ‘new’ imperialism had always been a peripheral matter; although passions had sometimes been very high, in the final analysis, Europeans had not been willing to go to war with each other over colonies. Also, the two nations which had shown the most hostility to one another in the imperialist scramble and which had come closest to war (the Fashoda incident in 1896), were Britain and France; yet by 1903, these two had begun to compose their differences and when war came, they fought as allies. The colonies were not a significant issue in the outbreak of war in 1914.
   
   

or

1. Rhodes was not interested in money for itself (he lived simply; he frequently had to borrow cash); he was not interested in a financial economic empire (he left financial aspects and running of his companies to other people). He was very late in getting into gold mining; in fact, he had only a relatively modest role in gold-mining in the Transvaal.
   
   
2. See this statement of Rhodes’ motives in 1877 (John Flint, Cecil Rhodes:, pp. 32-3)
   
   “At the ripe age of twenty-four Rhodes drafted his first will on September 19, 1877, bequeathing his then nonexistent fortune, according to the first clause
   
   To and for the establishment, promotion and development of a Secret Society, the true aim and object whereof shall be for the extension of British rule throughout the world, the perfecting of a system of emigration from the United Kingdom, and of colonisation by British subjects of all lands where the means of livelihood are attainable by energy, labour and enterprise, and especially the occupation by British settlers of the entire Continent of Africa, the Holly Land, the Valley of the Euphrates, the Islands of Cyprus and Candia, the whole of South America, the Islands of the Pacific not heretofore possessed by Great Britain, the whole of the Malay Archipelago, the seaboard of China and Japan, the ultimate recovery of the United States of America as an integral part of the British Empire, the inauguration of a system of Colonial representation in the Imperial Parliament which may tend to weld together the disjointed members of the Empire and, finally, the foundation of so great a Power as to render wars impossible and promote the best interests of humanity.”