Following philosophical breaks with the past during the eighteenth century, various innovative ideologies emerged: democracy, utilitarianism, transcendentalism, naturalism, pragmatism, and the like. Alongside these philosophical ideas, the Industrial Revolution was born. This moved manufacturing from cottage businesses to a new setting: the factory that employed members of the community, including workers who had migrated from rural to urban areas for employment in industry. Of various attempts to make sense of the resulting economy, none had as great an influence as that of the German Karl Marx (1818–1883), his intellectual partner, Friedrich Engels (1820–1895), and the Russian political revolutionary Vladimir Lenin (1870–1924).

The most visible works by Marx and Engels remain The Communist Manifesto (1848) and the massive three-volume Das Kapital (1867, 1885, 1894), the second and third of which were prepared by Engels from unfinished manuscripts and notes left by Marx at his death. During the post-World War II Cold War, the Soviet Union was considered the inheritor of Marxist principles though no real-world political system has matched the ideal Marx espoused, nor did any society in his time embody the moral sense that motivated his analysis. Nevertheless, the collapse of the Union of Soviet Socialist Republics (USSR) in 1989 discounted the importance of the Marxist analysis. But while history has shown how difficult if not impossible it was to construct a new society on Marxist principles, the analysis of capitalist economy by Marx and Lenin remains one of the most formidable in Western thought.

Marx and Engels brought into common usage the terms bourgeoisie and proletariat, which are a fossilized simplification of a complex societal structure. In their usage, the bourgeoisie were the owners of private property who controlled the means of production while the proletariat were the workers who carried out production. These make up the two great classes of society (another simplification), with the smaller class of bourgeoisie exploiting the much larger proletariat. Conflict between these makes up the fundamental “class struggle” of the system of capitalism. The proletariat does intensive labor to produce “commodities” (the topic of Kapital, Part I).