And now we are in a position to sum up in a brief and decisive formula what the difference between the sets of faculties thus contrasted is. It is not essentially a difference between lower and higher, for some forms of labour, such as that of the great painter, may be morally higher than some forms of direction. The difference is one not of degree, but of kind, and includes two different psycho-physical processes. Labour, from the most ordinary up to the rarest kind, is the mind or the brain of one man affecting that man's own hands, and the single task on which his hands happen to be engaged. The directive faculties are the mind or the brain of one man simultaneously affecting the hands of any number of other men, and through their hands the simultaneous tasks of all of them, no matter how various these tasks may be.
CHAPTER IV
THE ERRORS OF MARX, CONTINUED.
CAPITAL AS THE IMPLEMENT OF ABILITY
The human activities and faculties, then, which are involved in the production of modern wealth, are not, as Marx says—and as the orthodox economists said, whom he rightly calls his masters, and as their followers still say—of one kind—namely, those embodied in the individual task-work of the individual, to which Marx, Ricardo, and Mill alike give the name of "labour"; they are of two kinds. And this, indeed, the earlier economists recognised, as we may see by Mill's casual admission that the progress of industrial effort depends before all things on thought and the advance of knowledge. But they recognised the fact in a general way only. How thought and knowledge affected the industrial process they made no attempt to explain, otherwise than by comprehending them on occasion under the common name of labour, which they assigned throughout most of their arguments to manual task-work only.
Now, it is doubtless true that, as a mere matter of verbal propriety, this general sense may be given to the word "labour," if we please; but if in discussing the efforts which produce wealth we admit that these efforts are not of one kind but two, and if the word "labour" is, in nine cases out of ten, employed with the definite intention of designating only one of them, it is impossible to reason about the industrial process intelligibly, so long as we apply also the same name to the other. We might as well use the word "man"—as with reference to some problems we are perfectly right in doing—to designate both men and women, and then attempt to discuss the relations between the two sexes.
For the directive faculties, so essentially distinct from those to which universal custom has allocated the name of labour, it is difficult to find a name equally convenient and satisfying. In default of a better, I have, on former occasions, applied to it the name of Ability; and this will serve our purpose here—especially as it is a name which has been, of recent years, applied by many of the more thoughtful socialists themselves to certain activities of a mental and moral kind, which their conception of labour cannot be made to include, but which they are beginning to recognise as playing some part in production. We must remember, however, that we are using it in a strictly technical sense, which will in some respects be narrower than the ordinary, and in some more comprehensive. It will exclude all kinds of cleverness unapplied to economic production; and will include many powers, in so far as such production is affected by them, to the expression of whose scope and character it may sometimes appear inadequate.[1]
And now when we have come thus far, a quite new question arises. We have seen how ability is, by its direction of labour, the chief agency in that process which produces wealth to-day, and how it makes the amount produced, relatively to the number of the producers, so incomparably greater than it ever was under any previous system. We have now to consider the means by which this faculty of direction is exercised.
In order to understand this, we must turn our attention again to capital, as something distinct and detached from the human efforts that have produced it; and we shall find that the conception of it which dominated the thought of Marx, and that which dominates the thought of the orthodox school of economists, either excludes altogether, or fails to reveal the nature of, that particular force and function of it which, in the modern world, are fundamental.
Capital is divided traditionally into two kinds, technically called "fixed" and "circulating." By fixed capital, which is what Marx had mainly in view, is meant machinery, and the works and structures connected with it; and it is called "fixed" on account of its comparative permanence. By circulating capital is meant, as Adam Smith puts it, any stock of those consumable commodities which, produced by the aid of machinery, the merchant or the store-keeper buys in order to sell them at a profit; and it is called "circulating" because the commodities which are sold to-day are replaced by new ones of an equivalent kind to-morrow.