A Critical Examination of Socialism | Page 2

for the
introduction of a few additional notes, and for the translation of dollars
and cents into pounds and shillings, the English and the American
editions are the same.
W. H. M.
_January, 1908._

CONTENTS
CHAPTER I
THE HISTORICAL BEGINNING OF SOCIALISM AS AN
OSTENSIBLY SCIENTIFIC THEORY
Socialism an unrealised theory. In order to discuss it, it must be
defined.
Being of no general interest except as a nucleus of some general
movement, we must identify it as a theory which has united large
numbers of men in a common demand for change.
As the definite theoretical nucleus of a party or movement, socialism
dates from the middle of the nineteenth century, when it was erected
into a formal system by Karl Marx.
We must begin our examination of it by taking it in this, its earliest,
systematic form.
CHAPTER II
THE THEORY OF MARX AND THE EARLIER SOCIALISTS
SUMMARISED
The doctrine of Marx that all wealth is produced by labour.

His recognition that the possibilities of distribution rest on the facts of
production.
His theory of labour as the sole producer of wealth avowedly derived
from Ricardo's theory of value.
His theory of capital as consisting of implements of production, which
are embodiments of past labour, and his theory of modern capitalism as
representing nothing but a gradual abstraction by a wholly
unproductive class, of these implements from the men who made them,
and who alone contribute anything to their present productive use.
His theory that wages could never rise, but must, under capitalism, sink
all over the world to the amount which would just keep the labourers
from starvation, when, driven by necessity, they will rebel, and,
repossessing themselves of their own implements, will be rich forever
afterwards by using them for their own benefit.
CHAPTER III
THE ROOT 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
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 socialism of the

more ignorant classes, and also of the popular agitator.
It is, moreover, still used as an instrument of agitation by many who
personally repudiate it. The case of Mr. Hillquit.
The doctrine of Marx, therefore, still requires exposure.
Further, it is necessary to understand this earlier form of socialistic
theory in order to understand the later.
CHAPTER VI
REPUDIATION OF MARX BY MODERN SOCIALISTS,
CONTINUED. THEIR RECOGNITION OF CAPITAL AS THE
IMPLEMENT OF DIRECTIVE ABILITY. THEIR NEW POSITION,
AND THEIR NEW THEORETICAL DIFFICULTIES
The more educated socialists of to-day, besides virtually accepting the
argument of the preceding chapters with regard to labour, virtually
accept the argument set forth in them with regard to capital.
Mr. Sidney Webb, for example, recognises it as an implement of
direction,