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

        Repudiationof 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

        Proximatedifficulties. 
        Able men as A corporation of state officials

        How are the men fittest for posts of industrial power to be
        selected from the less fit?

        This problem solved automatically by the existing system of
        private and separate capitals.

The fusion of all private capitals into a single state capital would make this solution impossible, and would provide no other.  The only machinery by which the more efficient directors of labour could be discriminated from the less efficient would be broken.  Case of the London County Council’s steamboats.

Two forms which the industrial state under socialism might conceivably take:  The official directors of industry might be either an autocratic bureaucracy, or they might else be subject to elected politicians representing the knowledge and opinions prevalent among the majority.

        Estimate of the results which would arise in the former case. 
        Illustrations from actual bureaucratic enterprise.