New Liberalism: The Political Economy of J.A. Hobson

288 Pages·1982·15.774 MB·English

by  John Allett

New Liberalism
THE POLITICAL ECONOMY OF J.A. HOBSON
JohnAllett
John A. Hobson was a prominent member of a small band of British
radicals who argued around the turn of the century that the consistent
application of liberal ideas required the reorganization of capitalist
societies along socialist lines. Allett here suggests that their march
toward socialism was marked by a caution not overly to damage the
liberal heritage of their forefathers and yet to provide a philosophical
foundation for the creation of the welfare state, justified on the basis of
right and efficiency.
The author emphasizes Hobson's doctrine of imperialism and the
related theory of under-consumption for which he is best known, while
arguing that the lesser known of Hobson's doctrines - which the author
describes as the 'organic theory of surplus value' - is essential to a full
appreciation of the coherence of Hobson's thought.
Allett compares the analyses of Hobson, Adam Smith, J.S. Mill, the
Webbs, T.H. Green, Bosanquet, Marx, Lenin, Keynes, and Hobson's
comrade-in-arms L.T. Hobhouse and puts in perspective the dismissive
critiques of those contemporary scholars who claim that Hobson's work
is value-laden, simplistic, and contradictory.
This study presents an integral analysis of the life, times, and thought
of a profound and original thinker, whose legacy to social democratic
thought has yet to be fully appreciated.
JohnAllett is assistant professor in Political Studies at Trent University.
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JOHN ALLETT
New Liberalism
The Political Economy
of J.A. Hobson
UNIVERSITY OF TORONTO PRESS
Toronto Buffalo London
© University of Toronto Press 1981
Toronto Buffalo London
Printed in Canada
ISBN 0-8020-5558-3
Canadian Cataloguing in Publication Data
Allett, John, 1947-
New liberalism
Bibliography: p.
Includes index.
ISBN 0-8020-5558-3
1. Hobson, J.A. (John Atkinson), 1858-1940.
I. Title.
HB103.H62A44 330.15'5 C81-094652-1
To my Mother, Father, and Gail
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Preface
Comments passed by modern scholars on the works of John Atkinson Hob-
son often attest, even if only en passant, to the significance of his contribu-
tion to the philosophy of social democracy. J.K. Galbraith, for example, has
written that Hobson was 'the most original of English ... social reformers,' a
view shared by British historians like Robert Skidelsky and Peter Clarke, the
latter finding Hobson to be a profound if somewhat incautious thinker. Simi-
larly, Michael Freeden has recently declared that, despite the better estab-
lished reputations of T.H. Green and L.T. Hobhouse, Hobson was 'by far the
most original and penetrating of the new liberal theorists at the turn of the
century' and deserves 'far greater credit as an outstanding social thinker.'1
Nevertheless, comments such as these have not resulted, to date, in the
publication of any specialized study of the corpus of Hobson's work.
Hobson was a prolific writer of books and articles, the best known of
which, no doubt, are Imperialism: A Study, which received praise from Lenin,
and, to a much lesser extent, The Physiology of Industry, which was com-
mended by Keynes. This remarkable juxtaposition of influences, in itself,
should have secured Hobson from neglect, but it would seem that praise
from high, as it were, obscured the view to Hobson below.
The theme of both these books is the economic theory of underconsump-
tion. This theme is certainly a recurring one in Hobson's works, but in this
study it is not taken as the central motif of his thought. Instead, it is argued
that a lesser known doctrine, which I have labelled 'the theory of organic
surplus value' is the key to Hobson's philosophy. Although other scholars
have drawn attention to this aspect of Hobson's thought, most notably Alan
1 Galbraith, The Age of Uncertainty (1977), 147; Skidelsky, Oswald Mosley (1975), 55;
Clarke, Liberals and Social Democrats (1978), passim; and Freeden, The New Liberalism
(1978), 253
viii Preface
Lee and Michael Freeden, this is the first work fully to explore the organic
nature of Hobson's concept of surplus value, and to utilize it in integrating
both his economic and political thought. What emerges is a surprisingly
coherent philosophy - surprising in the light of Hobson's reputation for
inconsistency - which seeks to show that socialism is a prerequisite for the
consistent application of liberal principles. This is the doctrine of New Liber-
alism in a nutshell.
Chapter 1 attempts to locate Hobson in his time and place; the rest of the
book is thematic rather than chronological. In the thematic sections a con-
scious effort has been made to quote extensively from the wide range of
Hobson's works, partly because much of his work is now long out of print
and it is hoped that the resuscitation of these lost scripts will prove of interest
to the reader, and partly because the relative lack of historical development
in Hobson's thoughts allows a free range in choosing the most apposite pas-
sages for quotation.
It is, of course, the burden of this study to show that Hobson is not deserv-
ing of the neglect he has received in the past. For the most part this task has
been undertaken by indicating the seminal contributions he made to eco-
nomic and political thought, but it also has been necessary, on occasion, to
attempt to reduce some standard, dismissive criticisms of Hobson's thought
to what might be termed justifiable proportions.
Although Hobson was keen to stress that all production was the result of
joint efforts, the one exception he seemed to make was his own works.
Rarely did he acknowledge any intellectual indebtedness. Not wishing to
share in this inconsistency, I am very pleased to acknowledge the help and
encouragement I received from my friends and colleagues, Jim Moran, Sten
Kjellberg, Sally Zerker, Virginia McDonald, John Saul, Helmut Grost,
David J. Bell, and Donald Smiley. Special thanks are due to Professor J.T.
McLeod for leading me to, and R.I.K. Davidson for leading me through,
publication. I also would like to note my appreciation of the efforts of Beryl
Logan who typed the original manuscript. Finally, I would like to thank Nor-
man Higson, Head Archivist at Hull University, S.K. Ellison, House of
Lords Record Office, and C.E. Barralet, the South Place Ethical Society, for
helping make my research visits to England both pleasant and productive.
This book has been published with the help of a grant from the Social
Science Federation of Canada, using funds provided by the Social Sciences
and Humanities Research Council of Canada, and from the Publications
Fund of University of Toronto Press.
J.A.
Contents
PREFACE Vli
1
The Life and Times of J.A. Hobson 3
2
Economics and Ethics: A Human Valuation 47
3
Society as a Maker of Values 70
4
The Theory of Underconsumption 96
5
Hobson's Theory of Imperialism 131
6
The Foundations of a Welfare State 178
7
Democracy and the General Will 208
8
Conclusion: Hobson's Place in the Liberal Tradition 255
Bibliography of Hobson's Writings 263
INDEX 271