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, the only alternative to which is a system of legal coercion. Other socialists advocate the continued use of wage-capital as the implement of direction, but they imagine that the situation would be radically changed by making the "state" the sole capitalist. But the "state," as some of them are beginning to realise, would be merely the private men of ability--the existing employers--turned into state officials, and deprived of most of their present inducements to exert themselves. A socialistic state theoretically could always command labour, for labour can be exacted by force; but the exercise of ability must be voluntary, and can only be secured by a system of adequate rewards and inducements. Two problems with which modern socialism is confronted: How would it test its able men so as to select the best of them for places of power? What rewards could it offer them which would induce them systematically to develop, and be willing to exercise, their exceptional faculties? CHAPTER VII PROXIMATE DIFFICULTIES. ABLE MEN AS A CORPORATION OF STATE OFFICIALS