Marx and Engels outline certain stages of world history, each characterised by a distinctive economic formation. It is this economic formation that shapes other social sub-systems, which are termed as superstructure like the political structure, religion, values and culture. In German Ideology, Marx and Engels broadly outline four stages of history. These are: the primitive communal stage, the ancient stage based on slavery , the feudal stage,  the capitalist stage. The study of human history in terms of stages, each with its own distinct mode of production forms the basis of the Marxian theory of historical materialism.

As just mentioned each of these stages has a mode of production peculiar to itself. Each stage follows logically from the previous one. This is because each stage contains certain inner contradictions or tensions. These contradictions eventually break the system down and a new stage emerges from the womb of the old. The stage of capitalism, according to the Marxist interpretation of history, is a natural outcome of the contradictions within the feudal system. The feudal order was marked by the oppression of ‘serfs’ by the feudal lords. The tensions within the system lead to the breakdown of feudalism freeing large numbers of tenants from the feudal lands. The growing towns absorbed these people. A labour force thus became available for product manufacture. The development of new machines, the birth of the factory system and the mass production of goods consolidated the new economic system called ‘capitalism’.

The point that must be stressed is that Marx views capitalism from a historical perspective. Marx does not consider individual members of society as the focus of his theory. He speaks in terms of the whole society. To him, capitalism is a stage in the development of human society, which arises from the contradictions of an earlier: stage. It is a stage that will generate its own contradictions too, as we shall see later. The contradictions inherent in capitalist society will at the stage for the development of Marx’s ideal society-the communist society, which will be free of the contradictions and tensions of the earlier stages.

Main Features of Capitalism

Tom Bottomore (1973) in his ‘Dictionary of Marxist Thought’ sets down some of the mean features of capitalism as understood in Marxian thought

By this it is meant a shift from a subsistence economy to production in a factory with the help of machines and through division of labour. Goods are produced on a mass scale. They are produced for sale in the market.

Marx means that workers are regarded only in terms of their labour-power. Unlike in the earlier stages of human history, workers are not forced to work like slaves or serfs. Sheer economic need forces them to work.

As production is undertaken for sale, and sale is transacted through the use of money. Money is the social bond that ties together the various elements in the capitalist system. Hence the role of banks and financial institutions becomes important in the system.

Not only does the capitalist control the hiring and firing of workers, but also decided how production is to be carried out. Decisions regarding pricing of the product, wages of the workers, the amount of financial investment and so on are taken by the capitalist.

Since the whole idea of capitalism is production for sale, there is bound to be competition between capitalists. The consequences could be innovation or the use of the latest technology. Competition could also result in the formation of ‘monopolies’ or ‘cartels’, where a single producer or group of producers try to dominate the market by pushing or forcing out competitors. This leads to further concentrations and centralization of capital in a few hands.

Capitalism thus is a system, which, according to Marx symbolizes the most acute form of exploitation, inequality and polarization of classes. By this is meant that the social distance between the owners of the means of production (i.e., the bourgeoisie) and the working class (the proletariat) becomes greater and greater. The concept of class conflict is very important in Marx’s understanding of capitalism.

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 difference between what it costs to keep workers alive and what they can produce.

According to Marx, the history of human society is the history of class struggle. Each stage in human history is marked by a division of society into two groups, the ‘haves’ and the ‘have-nots’, those who dominate and those who are oppressed.

The very foundations on which capitalism survives, namely, the existence of private property, mass production of commodities under the factory system for profit and the existence of a working class that is forced to sell its labour-power in the market, leads to polarization of classes.

As capitalism progresses, these class divisions become wider. The interests of the bourgeoisie and proletariat become more and more separate. The proletariat becomes unified. After all, they share the same problems and begin to seek the same solutions. A ‘class in itself’ becomes a ‘class for itself’. The revolution of the proletariat will, according to Marx, bring in a new stage of history, ‘communism’, where the owners of the means of production will be the workers themselves. The contradictions of capitalism will be overcome and a new social order will be born.

Briefly, Karl Marx views capitalism as one of the stages in human history, which emerges out of the contradictions of the previous stage. Capitalism too, is beset with inner contradictions. It is a stage in which class conflict is at its greatest intensity. After all, the mans of production are concentrated in a few hands. The labour force is considered only in terms of its labour-power, which can be bought and sold for a price, namely, wages. The inequalities of the system lead to polarization of classes.

The proletariat comes to realise that they have common interests and common problems and will seek solutions to these problems. The proletariat will not just remain a “class in itself” but become a “class for itself”. Their liberation will be through revolution. The revolution of the proletariat will usher in a new stage, communism, where the means of production will be in the hands of the workers themselves.

One-Dimensional Man: Studies in the Ideology of Advanced Industrial Society is a 1964 book by the philosopher Herbert Marcuse, in which the author offers a wide-ranging critique of both contemporary capitalism and the Communist society of the Soviet Union, documenting the parallel rise of new forms of social repression in both these societies, as well as the decline of revolutionary potential in the West. He argues that "advanced industrial society" created false needs, which integrated individuals into the existing system of production and consumption via mass media, advertising, industrial management, and contemporary modes of thought.

This results in a "one-dimensional" universe of thought and behavior, in which aptitude and ability for critical thought and oppositional behavior wither away. Against this prevailing climate, Marcuse promotes the "great refusal" (described at length in the book) as the only adequate opposition to all-encompassing methods of control. Much of the book is a defense of "negative thinking" as a disrupting force against the prevailing positivism.

Marcuse also analyzes the integration of the industrial working class into capitalist society and new forms of capitalist stabilization, thus questioning the Marxian postulates of the revolutionary proletariat and the inevitability of capitalist crisis. In contrast to orthodox Marxism, Marcuse champions non-integrated forces of minorities, outsiders, and radical intelligentsia, attempting to nourish oppositional thought and behavior through promoting radical thinking and opposition. He considers the trends towards bureaucracy in supposedly Marxist countries to be as oppositional to freedom as those in the capitalist West