CHAPTER III

        Theroot error of the Marxian theory. 
        Its omission of directive ability. 
        Ability and labour defined

The theory of Marx analysed.  It is true as applied to primitive communities, where the amount of wealth produced is very small, but it utterly fails to account for the increased wealth of the modern world.

Labour, as Marx conceived of it, can indeed increase in productivity in two ways, but to a small degree only, neither of which explains the vast increase of wealth during the past hundred and fifty years.

The cause of this is the development of a class which, not labouring itself, concentrates exceptional knowledge and energy on the task of directing the labour of others, as an author does when, by means of his manuscript, he directs the labour of compositors.

        Formal definition of the parts played respectively by the
        faculties of the labouring and those of the directing classes.

CHAPTER IV

        Theerrors of Marx, continued.
        Capital as the implement of ability

        Two kinds of human effort being thus involved in modern
        production, it is necessary for all purposes of intelligible
        discussion to distinguish them by different names.

The word “labour” being appropriated by common custom to the manual task-work of the majority, some other technical word must be found to designate the directive faculties as applied to productive industry.  The word here chosen, in default of a better, is “ability.”

        Ability, then, being the faculty which directs labour, by what
        means does it give effect to its directions?

        It gives effect to its directions by means of its control of
        capital, in the form of wage-capital.

Ability, using wage-capital as its implement of direction, gives rise to fixed capital, in the form of the elaborate implements of modern production, which are the material embodiments of the knowledge, ingenuity, and energy of the highest minds.

CHAPTER V

        Repudiationof Marx by modern socialists. 
        Their recognition of directive ability

The more educated socialists of to-day, when the matter is put plainly before them, admit that the argument of the preceding chapters is correct, and repudiate the doctrine of Marx that “labour” is the sole producer.

        Examples of this admission on the part of American socialists.

        The socialism of Marx, however, still remains the socialism of
        the more ignorant classes, and also of the popular agitator.