John A. Hobson
The analysis of economic forces in the foregoing chapter explains the character which public finance assumes in States committed to an imperialist policy. Imperialism, as we see, implies the use of the machinery of government by private interests, mainly capitalist, to secure for them economic gains outside their country. The dominance of this factor in public policy imposes a special character alike upon expenditure and taxation.
The accompanying diagram brings into clear light the main features of the national expenditure of Great Britain during the last three decades of the nineteenth century.
The first feature is the rate of growth of national expenditure taken as a whole. This growth has been far faster than the growth of foreign trade. For whereas the average yearly value of our foreign trade for 1870-75 amounting to £636,000,000 increased in the period 1895-98 to £737,000,000, the average public expenditure advanced over the same period from £63,160,000 to £94,450,000. It is faster than the growth of the aggregate national income, which, according to the rough estimates of statisticians, advanced during the same period from about £1,200,000,000 to £1,700,000,000. The rate of growth has greatly quickened during the later half of the period in question, for, leaving out of consideration war expenditure, the rise of ordinary imperial expenditure has been from £87,423,000 in 1888 to £128,600,000 in 1900.
The most salient feature of the diagram is the small proportion of the national revenue expended for what may be regarded as directly