In his famous study of imperialism in 1902, John Hobson argued that British foreign policy had been oriented toward securing markets for British manufactured goods. This had taken on a new urgency, he argued, with the increasingly imperialistic policies of the United States and Germany, who had elbowed their way into markets even within the British Empire itself.
It was this sudden demand for foreign markets for manufactures and for investments which was avowedly responsible for the adoption of Imperialism as a political policy.... They needed Imperialism because they desired to use the public resources of their country to find profitable employment for their capital which otherwise would be superfluous....
The crucial point is that Hobson, arguing along lines that Lenin would later echo, believed that imperialism advanced hand-in-hand with industrial capitalism. Moreover, it was only going to get worse, because there were more industrialized countries springing up and also looking for markets. Hobson believed that the competition that this obviously engendered would lead to armed conflicts, driven by the interests of a class of industrialists and financiers. He proposed instead that nations manufacturers fearful of surpluses could avoid them by raising wages, thus creating more domestic demand and improving national standards of living. Comparing the process to "extensive" agriculture which encouraged farmers to secure new lands instead of improving the ones they already occupied, Hobson argued that it was short-sighted and destructive, but not inevitable.
Hobson believed that British foreign policy was not designed to serve the interests of the entire nation but rather those belonging to certain classes (more specifically, the wealthy, privileged, and those with vested interests) who imposed the policy upon the nation for their own advantage.
The primary thrust of such a policy was, therefore, greed. Hobson believed that the parties mentioned above used the state to assist them when they ventured into foreign territories for their own pleasure and profit. They did this under the pretext that they were acting in the interests of the home country. The state, therefore, had a duty to protect or avenge its citizens, wherever they may have found themselves, if their person or property was damaged by either the government or others from such a foreign territory.
Hobson believed that such a policy placed Britain in peril since it allowed these privileged individuals, as either leaders or members of, for example, missionary societies, or as adventurers undertaking risky expeditions, to call upon the country's military, political, and financial resources to attack foreign nations, supposedly to protect its own citizens. He believed that such nations would be unable to defend themselves against such a great power as Britain since they would be unaware of its might.
Hobson stated, furthermore, that such an approach allowed opportunistic mining magnates and risk traders the chance to set their sights on exploiting dangerous and unexplored countries from which they would profit substantially. Furthermore, these individuals or groups acted selfishly. They were interested only in benefiting themselves. They were prepared to call upon the nation's resources to defend them against risks that they exposed themselves to. Hobson contended that many unscrupulous politicians also jumped on the bandwagon in such ventures by pretending that exercising punitive measures was in the interests of the country and ensured British expansion.
In the end, Hobson believed, such policies diverted attention from domestic turmoil and focused on what he called "external employment."