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According to Karl Marx in all stratified societies there are

two major social groups: a ruling class and a subject
class. The ruling class derives its power from its
ownership and control of the forces of production. The
ruling class exploits and oppresses the subject class. As a
result there is a basic conflict of interest between the two
classes. The various institutions of society such as the
legal and political system are instruments of ruling class
domination and serve to further its interests.
Marx believed that western society
communism, ancient society, feudal society and capitalist
society. Primitive communism is represented by the
societies of pre-history and provides the only example of
the classless society. From then all societies are divided
into two major classes - master and slaves in ancient
society, lords and serfs in feudal society and capitalist
and wage labourers in capitalist society. Weber sees class
in economic terms. He argues that classes develop in
market economies in which individuals compete for
economic gain. He defines a class as a group of
individuals who share a similar position in market
economy and by virtue of that fact receive similar
economic rewards. Thus a person's class situation is
basically his market situation. Those who share a similar
class situation also share similar life chances. Their
economic position will directly affect their chances of
obtaining those things defined as desirable in their
society. Weber argues that the major class division is
between those who own the forces of production and

those who do not. He distinguished the following class

grouping in capitalist society:
The propertied upper class
The property less white collar workers
The petty bourgeoisie
The manual working class.
Talcott Parsons believe that order,
stability and cooperation in society are based on value
consensus that is a general agreement by members of
society concerning what is good and worthwhile.
Stratification system derives from common values it
follows from the existence of values that individuals will
be evaluated and therefore placed in some form of rank
order. Stratification is the ranking of units in a social
system in accordance with the common value system.
Those who perform successfully in terms of society's
values will be ranked highly and they will be likely to
receive a variety of rewards and will be accorded high
prestige since they exemplify and personify common
According to Kingsley Davis and Moore
stratification exists in every known human society. All
social system shares certain functional prerequisites
which must be met if the system is to survive and
operate efficiently. One such prerequisite is role allocation
and performance. This means that all roles must be filled.

They will be filled by those best able to perform them.

The necessary training for them is undertaken and that
the roles are performed conscientiously. Davis and Moore
argue that all societies need some mechanism for
insuring effective role allocation and performance. This
mechanism is social stratification which they see as a
system which attaches unequal rewards and privileges to
the positions in society. They concluded that social
stratification is a device by which societies insure that the
most important positions are conscientiously filled by the
most qualified persons.

Caste is closely connected with the Hindu philosophy and
religion, custom and tradition .It is believed to have had a
divine origin and sanction. It is deeply rooted social
institution in India. There are more than 2800 castes and
sub-castes with all their peculiarities. The term caste is
derived from the Spanish word caste meaning breed or
lineage. The word caste also signifies race or kind. The
Sanskrit word for caste is varna which means colour.The
caste stratification of the Indian society had its origin in
the chaturvarna system. According to this doctrine the
Hindu society was divided into four main varnas Brahmins, Kashtriyas, Vaishyas and Shudras.The Varna
system prevalent during the Vedic period was mainly
based on division of labour and occupation. The caste
system owns its origin to the Varna system. Ghurye says
any attempt to define caste is bound to fail because of
the complexity of the phenomenon. According to Risely
caste is a collection of families bearing a common name

claiming a common descent from a mythical ancestor

professing to follow the same hereditary calling and
regarded by those who are competent to give an opinion
as forming a single homogeneous community. According
to Maclver and Page when status is wholly predetermined
so that men are born to their lot without any hope of
changing it, then the class takes the extreme form of
caste. Cooley says that when a class is somewhat strictly
hereditary we may call it caste.M.NSrinivas sees caste as
a segmentary system. Every caste for him divided into
sub castes which are the units of endogamy whose
members follow a common occupation, social and ritual
life and common culture and whose members are
governed by the same authoritative body viz the
panchayat.According to Bailey caste groups are united
into a system through two principles of segregation and
hierarchy. For Dumont caste is not a form of stratification
but as a special form of inequality. The major attributes of
caste are the hierarchy, the separation and the division of
labour.Weber sees caste as the enhancement and
transformation of social distance into religious or strictly a
magical principle. For Adrian Mayer caste hierarchy is not
just determined by economic and political factors
although these are important.
Main features of caste system
Functions of the caste system
Dominant caste
Purity and Pollution

Main features of caste system

Caste system hierarchically divides the society. A
sense of highness and lowness or superiority and
inferiority is associated with this gradation or
ranking. The Brahmins are placed at the top of the
hierarchy and are regarded as pure or supreme. The
degraded caste or the untouchables have occupied
the other end of the hierarchy. The status of an
individual is determined by his birth and not by
selection nor by accomplishments. Each caste has its
own customs, traditions practices and rituals.It has
its own informal rules, regulations and procedures.
The caste panchayats or the caste councils regulate
the conduct of members. The caste system has
imposed certain restrictions on the food habitats of
the members these differ from caste to caste. In
North India Brahmin would accept pakka food only
from some castes lower than his own. But he would
not accept kachcha food prepared with the use of
water at the hands of no other caste except his own.
As a matter of rule and practice no individual would
accept kachcha food prepared by an inferior
casteman.The caste system put restriction on the
range of social relations also. The idea of pollution
means a touch of lower caste man would pollute or
defile a man of higher caste. Even his shadow is
considered enough to pollute a higher caste man.
The lower caste people suffered from certain socioreligious disabilities. The impure castes are made to
live on the outskirts of the city and they are not

allowed to draw water from the public wells. In earlier

times entrance to temples and other places of
religious importance were forbidden to them.
Educational facilities, legal rights and political
representation were denied to them for a very long
time. If the lower castes suffer from certain
disabilities some higher caste like the Brahmins enjoy
certain privileges like conducting prayers in the
temples etc.There is gradation of occupations also.
Some occupations are considered superior and
sacred while certain others degrading and inferior.
For a long time occupations were very much
associated with the caste system. Each caste had its
own specific occupations which were almost
hereditary. There was no scope for individual talent,
aptitude, enterprise or abilities. The caste system
imposes restrictions on marriage also. Caste is an
endogamous group. Each caste is subdivided into
certain sub castes which are again
endogamous.Intercaste marriages are still looked
down upon in the traditional Indian society.
Functions of the caste system
The caste system is credited to ensure the continuity of
the traditional social organization of India. It has
accommodated multiple communities including invading
tribes in the Indian society. The knowledge and skills of
the occupations have passed down from one generation
to the next. Through subsystems like Jajmani system the
caste system promoted interdependent interaction
between various castes and communities with in a

village. The rituals and traditions promoted cooperation

and unity between members of the different castes.
The dysfunctions
Caste system promoted untouchability and discrimination
against certain members of the society. It hindered both
horizontal and vertical social mobility forcing an
individual to carry on the traditional occupation against
his or her will and capacity. The status of women was
affected and they were relegated to the background. The
caste system divided the society into mutually hostile and
conflicting groups and subgroups.
Dominant caste
This concept given by M.N Srinivas holds that a caste is
dominant when it is numerically higher than the other
castes. In the Mysore village he described the peasant
Okkalinga composed of nearly half of the population
made up of nineteenth jati group. The Okkalinga were the
biggest land owner. The chief criteria of domination of a
caste are
1. Economic strength
2. Political power
3. Ritual purity
4. Numerical strength
The dominant caste also wields economic and political
power over the other caste groups. It also enjoys a high
ritual status in the local caste hierarchy. The dominant
caste may not be ritually high but enjoy high status
because of wealth, political power and numerical

strength. The presence of educated persons and high

occupation rate also play an important role in deciding its
dominance over other caste groupings. Sometimes a
single clan of dominant caste controls a number of
villages in areas. The dominant caste settle dispute
between persons belonging to their own and other
jati.The power of the dominant caste is supported by a
norm discouraging village from seeking justice from
area,govt official, court or police located outside the
village. The members of the dominant caste particularly
those from the wealthy and powerful families are
representative of this village in dealing with the officials.
Purity and Pollution
The notions of purity and pollution are critical for defining
and understanding caste hierarchy. According to these
concepts, Brahmins hold the highest rank and Shudras
the lowest in the caste hierarchy. The Varna System
represents a social stratification which includes four
varnas namely- Brahmans, Kshatriyas, Vaisyas and
Shudras.TheShudras were allocated the lowest rank of
social ladder and their responsibilities included service of
the three Varnas. The superior castes tried to maintain
their ceremonial purity
Dumont holds the notion of purity and pollution
interlinked with the caste system and untouchability.The
hierarchy of caste is decided according to the degree of
purity and pollution. It plays a very crucial role in
maintaining the required distance between different
castes. But the pollution distance varies from caste to
caste and from place to place.
Dipankar Gupta observes that the notion of purity and
pollution as Dumont observed is integrally linked with the

institution of untouchability .But unlike untouchability the

notion of purity and pollution is also a historical accretion.
Over time this notion freed itself from its specific and
original task of separating untouchables from the others
and began to be operative at different planes of the caste
The concept of purity and pollution plays a very crucial
role in maintaining the required distance between
different castes. But the pollution distance varies from
caste to caste and from place to place.
Prof M.N Srinivas introduced the term sanskritization to
Indian Sociology. The term refers to a process whereby
people of lower castes collectively try to adopt upper
caste practices and beliefs to acquire higher status. It
indicates a process of cultural mobility that is taking
place in the traditional social system of India.M.NSrinivas
in his study of the Coorg in Karnataka found that lower
castes in order to raise their position in the caste
hierarchy adopted some customs and practices of the
Brahmins and gave up some of their own which were
considered to be impure by the higher castes. For
example they gave up meat eating, drinking liquor and
animal sacrifice to their deities. They imitiated Brahmins
in matters of dress, food and rituals. By this they could
claim higher positions in the hierarchy of castes within a
generation. The reference group in this process is not
always Brahmins but may be the dominant caste of the
locality.Sanskritization has occurred usually in groups who
have enjoyed political and economic power but were not
ranked high in ritual ranking. According to Yogendra Singh
the process of sanskritization is an endogenous source of

social change .Mackim Marriot observes that sanskritic

rites are often added on to non-sanskritic rites without
replacing them. Harold Gould writes, often the motive
force behind sanskritisation is not of cultural imitation per
se but an expression of challenge and revolt against the
socioeconomic deprivations.
Class System
The class system is universal phenomenon denoting a
category or group of persons having a definite status in
society which permanently determines their relation to
other groups. The social classes are de facto groups (not
legally or religiously defined and sanctioned) they are
relatively open not closed. Their basis is indisputably
economic but they are more than economic groups. They
are characteristic groups of the industrial societies which
have developed since 17th century. The relative
importance and definition of membership in a particular
class differs greatly over time and between societies,
particularly in societies that have a legal differentiation of
groups of people by birth or occupation. In the wellknown example of socioeconomic class, many scholars
view societies as stratifying into a hierarchical system
based on occupation,economic status, wealth, or
income.According to Ogburn and Nimkoff a social class is
the aggregate of persons having essentially the same
social status in a given society. Marx defined class in
terms of the extent to which an individual or social group
has control over the means of production.In Marxist terms
a class is a group of people defined by their relationship
to the means of production.Classes are seen to have their
origin in the division of the social product into a

necessary product and a surplus product. Marxists explain

history in terms of a war of classes between those who
control production and those who actually produce the
goods or services in society (and also developments in
technology and the like). In the Marxist view of capitalism
this is a conflict between capitalists (bourgeoisie) and
wage workers (proletariat). Class antagonism is rooted in
the situation that control over social production
necessarily entails control over the class which produces
goods -- in capitalism this is the exploitation of workers
by the bourgeoisie. Marx saw class categories as defined
by continuing historical processes. Classes, in Marxism,
are not static entities, but are regenerated daily through
the productive process. Marxism views classes as human
social relationships which change over time, with
historical commonality created through shared productive
processes. A 17th-century farm labourer who worked for
day wages shares a similar relationship to production as
an average office worker of the 21st century. In this
example it is the shared structure of wage labour that
makes both of these individuals "working class."Maclver
and Page defines social class as any portion of the
community marked off from the rest by social status.Max
Weber suggest that social classes are aggregates of
individuals who have the same opportunities of acquiring
goods, the same exhibited standard of living. He
formulated a three component theory of stratification
with social, status and party classes (or politics) as
conceptually distinct elements.
Social class is based on economic relationship to the
market (owner, renter, employee, etc.)

Status class has to do with non-economic qualities

such as education, honour and prestige
Party class refers to factors having to do with
affiliations in the political domain
According to Weber a more complex division of labour
made the class more heterogeneous.In contrast to simple
income--property hierarchies, and to structural class
schemes like Weber's or Marx's, there are theories of
class based on other distinctions, such as culture or
educational attainment. At times, social class can be
related to elitism and those in the higher class are usually
known as the "social elite".For example, Bourdieu seems
to have a notion of high and low classes comparable to
that of Marxism, insofar as their conditions are defined by
different habitus, which is in turn defined by different
objectively classifiable conditions of existence. In fact,
one of the principal distinctions Bourdieu makes is a
distinction between bourgeoisie taste and the working
class taste.Social class is a segment of society with all the
members of all ages and both the sexes who share the
same general status.Maclver says whenever social
intercourse is limited by the consideration of social status
by distinctions between higher and lower there exists a
social class.
Characteristics of Social Class
Jajmani system
Characteristics of Social Class
A social class is essentially a status group. Class is related
to status. Different statuses arise in a society as people
do different things, engage in different activities and

pursue different vocations. Status in the case of class

system is achieved and not ascribed. Birth is not the
criterion of status. Achievements of an individual mostly
decide his status. Class is almost universal phenomenon.
It occurs in all the modern complex societies of the world.
Each social class has its own status in the society. Status
is associated with prestige. The relative position of the
class in the social set up arises from the degree of
prestige attached to the status. A social class is relatively
a stable group. A social class is distinguished from other
classes by its customary modes of behaviour.This is often
referred to as the life-styles of a particular class. It
includes mode of dress, kind of living the means of
recreation and cultural products one is able to enjoy, the
relationship between parent and children. Life-styles
reflect the specialty in preferences, tastes and values of a
class. Social classes are open- groups. They represent an
open social system. An open class system is one in which
vertical social mobility is possible. The basis of social
classes is mostly economic but they are not mere
economic groups or divisions. Subjective criteria such as
class- consciousness, class solidarity and class
identification on the on hand and the objective criteria
such as wealth, property, income, education and
occupation on the other hand are equally important in the
class system. Class system is associated with class
consciousness. It is a sentiment that characterizes the
relations of men towards the members of their own and
other classes. It consists in the realization of a similarity
of attitude and behavior with members of other classes.
Sociologists have given three-fold classification of classes
which consists of - upper class, middle class and lower
class.Sorokin has spoken of three major types of class

occupational classes. Lloyd Warner shows how class
distinctions contribute to social stability.Veblen analyzed
the consumption pattern of the rich class by the concept
of conspicuous consumption. Warner has classified
classes into six types- upper-upper class, upper-middle
class, upper-lower class, lower-upper class, the lower
middle class and lower class. Anthony Giddens's three
class model is the upper, middle and lower (working)
Jajmani system
William H Wiser introduced the term Jajmani system in
the vocabulary of Indian sociology through his book The
Hindu Jajmani system where he described in detail how
different caste group interact with each other in the
production and exchange of goods and services. In
different parts of India different terms are used to
describe this economic interaction among the castes for
example in Maharashtra the term Balutedar is used.
However in sociological literature jajmani system has
come to be accepted as a general term to describe the
economic interaction between the castes at the village
level. This system is also a ritual system concerned with
the aspects of purity and pollution as with economic
aspects. It functions so that the highest caste remains
pure while the lowest castes absorb pollution from them.
Villages are composed of number of jatis each having its
occupational speciality.Jajmani system is essentially an
agriculture based system of production and distribution of
goods and services. Through jajmani relations these
occupational jatis get linked with the land owning
dominant caste. The jajmani system operates around the
families belonging to the land owning dominant caste the

numbers of which are called jajmans.The land owning

caste occupy a privileged position in the jajmani relations.
The interaction between occupational castes and the land
owning castes take place within the framework of nonreciprocal and asymmetrical type of relations. The land
owning castes maintain a paternalistic attitude of
superiority towards their occupational castes that are
called Kamins in North India. The term Kamin means one
who works for somebody or serves him.
In terms of Karl Polanyi's classification of exchange
system -Jajmani exchange can be termed as
redistributive system of exchange. The Functionalist view
of jajmani system regards it as the basis of selfsufficiency, unity, harmony and stability in the village
community. However the Marxist scholars hold a very
different opinion. They regard the jajmani system as
essentially exploitative, characterized by a latent conflict
of interest which could not crystallize due to the
prevalent social setup. Thus if in future the conditions of
the lower caste improve an open conflict between the
lower and upper caste is inevitable. Oscar Lewis who
studied Rampur village near Delhi and Biedelmn has been
critical of the Jajmani system which they regard as
exploitative. According to them the members of
occupational jatis are largely landless labourers and have
no resources to wage a struggle against the dominant
caste out of the compulsion of the need for survival. They
succumb to all injustice perpetuated by the landowning
dominant caste who enjoy both economic and political
power. Scholars like Berreman, Harold Gould and Pauline
Kolendaetc accept that there is an element of truth in
both the functionalist and Marxist views of the jajmani
system. They believe that consensus and harmony as

well as conflict and exploitation are prevalent in the

village society. According to Dumont jajmani system
makes use of hereditary personal relationships to express
the division of labour.This system is a ritual expression
rather than just an economic arrangement.S.CDube refers
to the system as corresponding to the presentation and
counter presentation by which castes as a whole are
bound together in a village which is more or less
universal in nature. Leach believes that the system
maintains and regulates the division of labour and
economic interdependence of castes.
Karl Marx's
influenced by:

Karl Marx
(1818- 1883) thought



The dialectical method and historical orientation of

Georg Wilhelm Friedrich Hegel;
The classical political economy of Adam Smith and
David Ricardo;
French socialist and sociological thought, in particular
the thought of Jean-Jacques Rousseau.
The most important concepts of Karl Marx
The following concepts of Marx have aided sociological
thought significantly;
Dialectical Materialism

Materialistic Interpretation
Historical Materialism
Class and Class conflict




Marx believed that he could study history and society

scientifically and discern tendencies of history and the
resulting outcome of social conflicts. Some followers of
Marx concluded, therefore, that a communist revolution is
inevitable. However, Marx famously asserted in the
eleventh of his Theses on Feuerbach that "philosophers
have only interpreted the world, in various ways; the
point however is to change it", and he clearly dedicated
himself to trying to alter the world. Consequently, most
followers of Marx are not fatalists, but activists who
believe that revolutionaries must organize social change.
Marx's view of history, which came to be called the
materialist conception of history (and which was
developed further as the philosophy of dialectical
materialism) is certainly influenced by Hegel's claim
that reality (and history) should be viewed dialectically.
Hegel believed that the direction of human history is
characterized in the movement from the fragmentary
toward the complete and the real (which was also a
movement towards greater and greater rationality).
Sometimes, Hegel explained, this progressive unfolding of
the Absolute involves gradual, evolutionary accretion but
at other times requires discontinuous, revolutionary leaps
- episodal upheavals against the existing status quo. For
example, Hegel strongly opposed the ancient institution
of legal slavery that was practiced in the United States
during his lifetime, and he envisioned a time when
Christian nations would radically eliminate it from their
civilization. While Marx accepted this broad conception of
history, Hegel was an idealist, and Marx sought to rewrite
dialectics in materialist terms. He wrote that Hegelianism
stood the movement of reality on its head, and that it was
necessary to set it upon its feet. (Hegel's philosophy

remained and remains in direct opposition to Marxism on

this key point.)
Marx's acceptance of this notion of materialist dialectics
which rejected Hegel's idealism was greatly influenced by
Ludwig Feuerbach. In The Essence of Christianity,
Feuerbach argued that God is really a creation of man
and that the qualities people attribute to God are really
qualities of humanity. Accordingly, Marx argued that it is
the material world that is real and that our ideas of it are
consequences, not causes, of the world. Thus, like Hegel
and other philosophers, Marx distinguished between
appearances and reality. But he did not believe that the
material world hides from us the "real" world of the ideal;
on the contrary, he thought that historically and socially
specific ideologies prevented people from seeing the
material conditions of their lives clearly.
The other important contribution to Marx's revision of
Hegelianism was Engels' book, The Condition of the
Working Class in England in 1844, which led Marx to
conceive of the historical dialectic in terms of class
conflict and to see the modern working class as the most
progressive force for revolution.The notion of labour is
fundamental in Marx's thought. Basically, Marx argued
that it is human nature to transform nature, and he calls
this process of transformation "labour" and the capacity
to transform nature labour power. For Marx, this is a
natural capacity for a physical activity, but it is intimately
tied to the human mind and human imagination:A spider
conducts operations that resemble those of a weaver,
and a bee puts to shame many an architect in the
construction of her cells. But what distinguishes the worst
architect from the best of bees is this, that the architect
raises his structure in imagination before he erects it in

reality. (Capital, Vol. I, Chap. 7, Pt. 1) Karl Marx inherits

that Hegelian dialectic and, with it, a disdain for the
notion of an underlying invariant human nature.
Sometimes Marxists express their views by contrasting
"nature" with "history". Sometimes they use the phrase
"existence precedes consciousness". The point, in either
case, is that who a person is, is determined by where and
when he is - social context takes precedence over innate
behavior; or, in other words, one of the main features of
human nature is adaptability. Marx did not believe that all
people worked the same way, or that how one works is
entirely personal and individual. Instead, he argued that
work is a social activity and that the conditions and forms
under and through which people work are socially
determined and change over time.Marx's analysis of
history is based on his distinction between the means /
forces of production, literally those things, such as land,
natural resources, and technology, that are necessary for
the production of material goods, and the relations of
production, in other words, the social and technical
relationships people enter into as they acquire and use
the means of production. Together these comprise the
mode of production; Marx observed that within any given
society the mode of production changes, and that
European societies had progressed from a feudal mode of
production to a capitalist mode of production. In general,
Marx believed that the means of production change more
rapidly than the relations of production (for example, we
develop a new technology, such as the Internet, and only
later do we develop laws to regulate that technology). For
Marx this mismatch between (economic) base and
(social) superstructure is a major source of social
disruption and conflict. Marx understood the "social
relations of production" to comprise not only relations

among individuals, but between or among groups of

people, or classes. As a scientist and materialist, Marx did
not understand classes as purely subjective (in other
words, groups of people who consciously identified with
one another). He sought to define classes in terms of
objective criteria, such as their access to resources. For
Marx, different classes have divergent interests, which is
another source of social disruption and conflict. Conflict
between social classes being something which is inherent
in all human history:The history of all hitherto existing
society is the history of class struggles. (The Communist
Manifesto, Chap. 1)
Marx was especially concerned with how people relate to
that most fundamental resource of all, their own labourpower. Marx wrote extensively about this in terms of the
problem of alienation. As with the dialectic, Marx began
with a Hegelian notion of alienation but developed a more
materialist conception. For Marx, the possibility that one
may give up ownership of one's own labour - one's
capacity to transform the world - is tantamount to being
alienated from one's own nature; it is a spiritual loss.
Marx described this loss in terms of commodity fetishism,
in which the things that people produce, commodities,
appear to have a life and movement of their own to which
humans and their behavior merely adapt. This disguises
the fact that the exchange and circulation of commodities
really are the product and reflection of social relationships
among people. Under capitalism, social relationships of
production, such as among workers or between workers
and capitalists, are mediated through commodities,
including labor, that are bought and sold on the market.
Commodity fetishism is an example of what Engels
called false consciousness, which is closely related to the

understanding of ideology. By ideology they meant ideas

that reflect the interests of a particular class at a
particular time in history, but which are presented as
universal and eternal. Marx and Engels' point was not
only that such beliefs are at best half-truths; they serve
an important political function. Put another way, the
control that one class exercises over the means of
production includes not only the production of food or
manufactured goods; it includes the production of ideas
as well (this provides one possible explanation for why
members of a subordinate class may hold ideas contrary
to their own interests). Thus, while such ideas may be
false, they also reveal in coded form some truth about
political relations. For example, although the belief that
the things people produce are actually more productive
than the people who produce them is literally absurd, it
does reflect the fact (according to Marx and Engels) that
people under capitalism are alienated from their own
labour-power. Another example of this sort of analysis is
Marx's understanding of religion, summed up in a
passage from the preface to his 1843 Contribution to the
Critique of Hegel's Philosophy of Right: Religious
suffering is, at one and the same time, the expression of
real suffering and a protest against real suffering. Religion
is the sigh of the oppressed creature, the heart of a
heartless world, and the soul of soulless conditions. It is
the opium of the people. Whereas his Gymnasium senior
thesis argued that the primary social function of religion
was to promote solidarity, here Marx sees the social
function as a way of expressing and coping with social
inequality, thereby maintaining the status quo. Marx
argued that this alienation of human work (and resulting
commodity fetishism) is precisely the defining feature of
capitalism. Prior to capitalism, markets existed in Europe

where producers and merchants bought and sold

commodities. According to Marx, a capitalist mode of
production developed in Europe when labor itself became
a commodity - when peasants became free to sell their
own labor-power, and needed to do so because they no
longer possessed their own land or tools necessary to
produce. People sell their labor-power when they accept
compensation in return for whatever work they do in a
given period of time (in other words, they are not selling
the product of their labor, but their capacity to work). In
return for selling their labor power they receive money,
which allows them to survive. Those who must sell their
labor power to live are "proletarians." The person who
buys the labor power, generally someone who does own
the land and technology to produce, is a "capitalist" or
"bourgeois." (Marx considered this an objective
description of capitalism, distinct from any one of a
variety of ideological claims of or about capitalism). The
proletarians inevitably outnumber the capitalists.
Marx distinguished industrial capitalists from merchant
capitalists. Merchants buy goods in one place and sell
them in another; more precisely, they buy things in one
market and sell them in another. Since the laws of supply
and demand operate within given markets, there is often
a difference between the price of a commodity in one
market and another. Merchants, then, practice arbitrage,
and hope to capture the difference between these two
markets. According to Marx, capitalists, on the other
hand, take advantage of the difference between the labor
market and the market for whatever commodity is
produced by the capitalist. Marx observed that in
practically every successful industry input unit-costs are
lower than output unit-prices. Marx called the difference

"surplus value" and argued that this surplus value had its
source in surplus labour.
The capitalist mode of production is capable of
tremendous growth because the capitalist can, and has
an incentive to, reinvest profits in new technologies. Marx
considered the capitalist class to be the most
revolutionized the means of production. But Marx argued
that capitalism was prone to periodic crises. He
suggested that over time, capitalists would invest more
and more in new technologies, and less and less in labor.
Since Marx believed that surplus value appropriated from
labor is the source of profits, he concluded that the rate
of profit would fall even as the economy grew. When the
rate of profit falls below a certain point, the result would
be a recession or depression in which certain sectors of
the economy would collapse. Marx understood that
during such a crisis the price of labor would also fall, and
eventually make possible the investment in new
technologies and the growth of new sectors of the
Marx believed that this cycle of growth, collapse, and
growth would be punctuated by increasingly severe
crises. Moreover, he believed that the long-term
consequence of this process was necessarily the
enrichment and empowerment of the capitalist class and
the impoverishment of the proletariat. He believed that
were the proletariat to seize the means of production,
they would encourage social relations that would benefit
everyone equally, and a system of production less
vulnerable to periodic crises. In general, Marx thought
that peaceful negotiation of this problem was
impracticable, and that a massive, well-organized and

violent revolution would in general be required, because

the ruling class would not give up power without violence.
He theorized that to establish the socialist system, a
dictatorship of the proletariat - a period where the needs
of the working-class, not of capital, will be the common
deciding factor - must be created on a temporary basis.
As he wrote in his "Critique of the Gotha Program",
"between capitalist and communist society there lies the
period of the revolutionary transformation of the one into
the other. Corresponding to this is also a political
transition period in which the state can be nothing but
the revolutionary dictatorship of the proletariat."
In the 1920s and '30s, a group of dissident Marxists
founded the Institute for Social Research in Germany,
among them Max Horkheimer, Theodor Adorno, Erich
Fromm, and Herbert Marcuse. As a group, these
authors are often called the Frankfurt School. Their work
is known as Critical Theory, a type of Marxist philosophy
and cultural criticism heavily influenced by Hegel, Freud,
Nietzsche, and Max Weber.The Frankfurt School broke
with earlier Marxists, including Lenin and Bolshevism in
several key ways. First, writing at the time of the
ascendance of Stalinism and Fascism, they had grave
doubts as to the traditional Marxist concept of proletarian
class consciousness. Second, unlike earlier Marxists,
especially Lenin, they rejected economic determinism.
While highly influential, their work has been criticized by
both orthodox Marxists and some Marxists involved in
political practice for divorcing Marxist theory from
practical struggle and turning Marxism into a purely
academic enterprise.Other influential non-Bolshevik
Marxists at that time include Georg Lukacs, Walter
Benjamin and Antonio Gramsci, who along with the

Frankfurt School are often known by the term Western

Marxism. Henryk Grossman, who elaborated the
mathematical basis of Marx's 'law of capitalist
breakdown', was another affiliate of the Frankfurt School.
Also prominent during this period was the Polish
revolutionary Rosa Luxemburg.In 1949 Paul Sweezy and
Leo Huberman founded Monthly Review, a journal and
press, to provide an outlet for Marxist thought in the
United States independent of the Communist Party.In
1978, G. A. Cohen attempted to defend Marx's thought as
a coherent and scientific theory of history by
reconstructing it through the lens of analytic philosophy.
This gave birth to Analytical Marxism, an academic
movement which also included Jon Elster, Adam
Przeworski and John Roemer. BertellOllman is another
Anglophone champion of Marx within the academy