This chapter explores the apparent contradiction in Hobson's writings on economic internationalism between his defence of free trade and his advocacy of international economic government. The way in which he did or did not face this apparent contradiction is important because Hobson's arguments became the basis for the transformation of liberal internationalism that is reflected in the difference between the nineteenth-century radical Richard Cobden, on the one hand, and twentieth-century liberals, John Maynard Keynes and David Mitrany, on the other. Hobson himself did not consider his opinions on free trade and his advocacy of a redistributive international government to be in contradiction. On the face of it, though, his ideal vision of an international economic government directing capital, labour and natural resources as well as his proposals to restore the European economies after the Great War through inter-governmental co-operation compromises the central tenets of free trade doctrine.

The chapter deals with the underlying themes and theory in Hobson's economic internationalism rather than his specific policy proposals and his constantly changing outlook on international economic issues. Hobson's free trade internationalism is set out first. The second section looks at the rules and institutions that Hobson felt were needed to maintain free trade.