Hobson with a Keynesian twist
In this article, Hamilton notes that while John Maynard Keynes respectfully referred to John A. Hobson’s contributions to economic thought, subsequent postKeynesians have largely ignored his contribution. Hamilton ascribes this neglect to two major factors. The first is Hobson’s supposed theoretical inelegance. This Hamilton dismisses as a result of the second factor, which is that Hobson’s underconsumption theory is best understood when it is put into Hobson’s entire theoretical system. Hamilton argues that Hobson’s theory of unearned surplus which leads to excess savings and overinvestment leads directly to his theory of underconsumption and his theory of imperialism. The article then undertakes an even-handed assessment of the strengths and weaknesses of Hobson’s argument. Especially important here is Hobson’s continued adherence to the classical position on the relationship between savings and investment. Hamilton also clearly articulated the differences between Hobson’s and Keynes’s views on consumption and investment, and notes the policy differences that emerge from their respective positions.