Overview
The Marxian analysis begins with an analysis of material conditions, taking at its starting point the necessary economic activities required by human society to provide for its material needs. The form of economic organization, or mode of production, is understood to be the basis from which the majority of other social phenomena — including social relations, political and legal systems, morality and ideology — arise (or at the least by which they are directly influenced). These social relations base the economic system and the economic system forms the superstructure. As the forces of production, most notably technology, improve, existing forms of social organization become inefficient and stifle further progress. As Karl Marx observed: "At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or_ this merely expresses the same thing in legal terms_ with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution."
These inefficiencies manifest themselves as social contradictions in society in the form of class struggle. Under the capitalist mode of production, this struggle materializes between the minority (the bourgeoisie) who own the means of production, and the vast majority of the population (the proletariat) who produce goods and services. Taking the idea that social change occurs because of the struggle between different classes within society who are under contradiction against each other, leads the Marxist analysis to the conclusion that capitalism exploits and oppresses the proletariat, which leads to a proletarian revolution.
Capitalism (according to Marxist theory) can no longer sustain the living standards of the population due to its need to compensate for falling rates of profit by driving down wages, cutting social benefits and pursuing military aggression. The socialist system would succeed capitalism as humanity's mode of production through workers' revolution. According to Marxism, especially arising from Crisis theory, Socialism is a historical necessity (but not an inevitability).
In a socialist society private property in the means of production would be superseded by co-operative ownership. A socialist economy would not base production on the creation of private profits, but would instead base production and economic activity on the criteria of satisfying human needs — that is, production would be carried out directly for use. As Engels observed: "Then the capitalist mode of appropriation in which the product enslaves first the producer, and then appropriator, is replaced by the mode of appropriation of the product that is based upon the nature of the modern means of production; upon the one hand, direct social appropriation, as means to the maintenance and extension of production_ on the other, direct individual appropriation, as means of subsistence and of enjoyment."'
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