been advocated with much specious argument. Essentially it
involves the contention that there is no distinction between wages and
profits, or between capitalists and laborers; that the capitalist is a
worker, and his profits simply wages for his useful and highly important
work of directing industry. It is a bold theory with a very small basis
of fact. Whoever honestly considers it, must, one would think, see that
it is both absurd and untrue. Not only is the larger part of industry
to-day managed by salaried employees who have no part, or only a very
insignificant part, in the ownership of the concerns they manage, but
the profits are distributed among shareholders who, as shareholders,
have never contributed service of any kind to the industries in which
they are shareholders. Whatever services are performed, even by the
figure-head "dummy" directors of companies, are paid for before profits
are considered at all. This is the invincible answer to such criticisms
as that of Mr. Mallock, that Marx and his followers have not recognized
"the functions of the directive ability of the few." When all the
salaries of the directing "few" have been paid, as well as the wages of
the many, and the cost of all materials and maintenance of machinery,
there remains a surplus to be distributed among those who belong neither
to the "laboring many" nor the "directing few." That profit Mr. Mallock
cannot explain away. Marx himself, in "Capital," called attention to the
"directing ability of the few," quite as clearly as Mr. Mallock has
done. He first shows how the "collective power of masses" is really a
new creation; that it involves a special kind of leadership, or
directing authority, just as an orchestra does; then he proceeds to
point out the development of a special class of supervisors and
directors of industry, "a special kind of wage laborer.... The _work of
supervision becomes their established and exclusive function_."[178]
Socialists, contrary to Mr. Mallock, have not overlooked the function
exercised by the directing few, but they have pointed out that when
these have been paid, their salaries being sometimes almost fabulous,
there is still a surplus-value to be distributed among those who have
not shared in the production, either as mental or manual workers. As Mr.
Algernon Lee says:--

"The profits produced in many American mills, factories, mines, and
railway systems go in part to Englishmen or Belgians or Germans who
ne