Systematic theory of imperialism

The systematic theory of imperialism was developed by John A. Hobson whose main objective is to preserve the liberalism of imperialism and pave the way for the implementation of a policy of social reforms within the capitalist system itself. The second objective is the analysis of poverty in the author's own country, Great Britain. Supported by numerous statistics, Hobson claims that the expansion of the British Empire from 1880 onwards is directly linked to the huge increase in British overseas investment. Hence, the author infers that the decisive factor of imperialism was the interest of financial circles to find lucrative investments that would compensate for the reduction of profits within the country itself.

The systematic theory of imperialism considers that the capitalist system does not necessarily have to be linked to imperialism. The problem is not capitalism itself, but social inequality, to the extent that the working classes have only a tiny part of the national wealth. There is, on the one hand, an excess of chronic savings and, on the other, an insufficient demand of the domestic market: underconsumption. From the study of British society, Hobson claims in this theory that the excess capital of power groups results in a search for beneficial investments that are not found in the country itself. The key to the problem, according to this theory, is the discrepancy between the enormous capacity of imperialism to give power to the power groups and the scarce purchasing power of the working classes. For Hobson the ideal would be to equalize the purchasing power of the popular classes with the power of capitalism, so as not to generate an excess of capital and not to incur imperialism by seeking investments in third countries.

Hobson's theory also analyzes Britain's trade with the colonies after 1880 and questions its importance. It considers that the losses, as a result of the maintenance of the colonial empire, outweighed the supposed benefits from the commercial exchanges of the metropolis with its colonies. This theory also argues that it is not the merchant who is the real imperialist, but the main actor of imperialism is the investor, the capitalist in the strict sense.

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