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If only a number of otherwise independent peasants could be forced to give enough of their time to the proprietor of a factory to-day, the entire use of wage-capital would in his case be gone. The same thing is true of slavery.
Such capital we may call wage-capital. Wage-capital, although in practice it disguises itself under the form of money, is essentially a stock of goods which are the daily necessaries of life, but which, instead of being sold to the public, like the goods of the store-keeper, at a profit, are distributed by their possessor among a special group of labourers on conditions.
In order to realise the difficulties which, in this respect, socialism would have to face, let us consider the manner in which the problem is solved now. Under the system of private capitalism it solves itself by an automatic process. In order that any man may direct the labour of other men, he must, under that system, be the possessor or controller of so much wage-capital.
But the moment the divisions between the reservoirs are broken down, and the separate capitals contained in them become, as would be the case under socialism, fused together like the waters of a single lake, the director of labour who so misused any portion of this fluid stock that the products of labour, as directed by him, failed to replace the wages, would not thereby be incapacitated from continuing his misdirections further; for the wage-capital dissipated by his incompetence could, under these conditions, always be replaced, and its loss more or less concealed, by fresh supplies which had a really different origin.
If, on the other hand, the invention turns out to be a failure, the wage-capital is wasted, and, so far as the general welfare is concerned, the state might just as well have thrown the whole of it into the sea.
But under a system of state socialism the situation would be wholly changed. Private capitalism is, in this respect, self-acting, and acts with absolute accuracy, because wage-capital being divided into a multitude of independent reservoirs, its waste at any one point brings about its own remedy.
Now, in proposing to abolish the wage-system, Mr. Webb and his fellow-theorists do not do so without specifying a definite substitute; and when we come to consider what their substitute is, we shall find that it implies, on their part, a full recognition of the function which wage-capital, as the instrument of ability, performs in modern production.
But if the engines, when tried, develop some inherent defect, and he consequently can sell none of them, he may still, perhaps, get back the price of the raw metal a petty sum, insufficient for his own needs but his whole wage-capital will be gone, and with it his power of directing any further labour in the future.
Thus in wage-capital we have the capital of the modern world in what dynamically is its primary and parent form a kind of capital which improved machinery is always tending to augment, but of whose use the machinery itself, its renewal, and its continued improvement, are the consequences. That such is the case might be illustrated by any number of familiar examples.
The reader will remember how, having first elucidated the part which exceptional mental faculties, concentrated on the direction of labour, and here called ability, play in modern production, I proceeded to the question of the means by which this direction is accomplished, and showed that these were supplied by the possession of wage-capital capitalism thus representing no mere passive monopoly, but a system of reins which are attached to innumerable horses, and are useless except as vehicles of the skill with which the coachmen handle them.
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