he 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

THE ERRORS 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

REPUDIATION OF 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 s