Marxism uses a methodology known as historical materialism to analyze and critique the development of capitalism and the role of class struggles in systemic economic change. According to Marxian theory, class conflict arises in capitalist societies due to contradictions between the material interests of the oppressed proletariat—a class of wage labourers employed by the bourgeoisie to produce goods and services—and the bourgeoisie—the ruling class who own the means of production and extract their wealth through appropriation of the surplus product (profit) produced by the proletariat. This class struggle that is commonly expressed as the revolt of a society's productive forces against its relations of production, results in a period of short-term crises as the bourgeoisie struggle to manage the intensifying alienation of labor experienced by the proletariat, albeit with varying degrees of class consciousness. This crisis culminates in a proletarian revolution and eventually leads to the establishment of socialism—a socioeconomic system based on social ownership of the means of production, distribution based on one's contribution and production organized directly for use. As the productive forces continued to advance, Marx hypothesized that socialism would ultimately transform into a communist society; a classless, stateless, humane society based on common ownership and the underlying principle: "From each according to his ability, to each according to his needs".
Marxism has developed into many different branches and schools of thought, though now there is no single definitive Marxist theory. Different Marxian schools place a greater emphasis on certain aspects of classical Marxism while rejecting or modifying other aspects. Many schools of thought have sought to combine Marxian concepts and non-Marxian concepts, which has often lead to contradictory conclusions. However, lately there is movement toward the recognition that historical materialism and dialectical materialism remains the fundamental aspect of all Marxist schools of thought, which should result in more agreement between different schools. Marxism has had a profound and influential impact on global academia and has enjoyed expansion into many fields such as archaeology, anthropology, media studies, political science, theater, history, sociology, art history and theory, cultural studies, education, economics, ethics, criminology, geography, literary criticism, aesthetics, film theory, critical psychology and philosophy.
The term "Marxism" was popularized by Karl Kautsky, who considered himself an "orthodox" Marxist during the dispute between the orthodox and revisionist followers of Marx. Kautsky's revisionist rival Eduard Bernstein also later adopted use of the term. Engels did not support the use of the term "Marxism" to describe either Marx's or his views. Engels claimed that the term was being abusively used as a rhetorical qualifier by those attempting to cast themselves as "real" followers of Marx while casting others in different terms, such as "Lassallians". In 1882, Engels claimed that Marx had criticized self-proclaimed "Marxist" Paul Lafargue, by saying that if Lafargue's views were considered "Marxist", then "one thing is certain and that is that I am not a Marxist".
Marxism analyzes the material conditions and the economic activities required to fulfill human material needs to explain social phenomena within any given society. It assumes that the form of economic organization, or mode of production, influences all other social phenomena—including social relations, political institutions, legal systems, cultural systems, aesthetics, and ideologies. The economic system and these social relations form a base and superstructure. As forces of production, i.e., technology, improve, existing forms of social organization become obsolete and hinder 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. Starting with the conjectural premise that social change occurs because of the struggle between different classes within society who are under contradiction against each other, a Marxist would conclude that capitalism exploits and oppresses the proletariat, therefore capitalism will inevitably lead to a proletarian revolution.
Marxian economics and its proponents view capitalism as economically unsustainable and incapable of improving the living standards of the population due to its need to compensate for falling rates of profit by cutting employee's wages, social benefits and pursuing military aggression. The socialist system would succeed capitalism as humanity's mode of production through workers' revolution. According to Marxian crisis theory, socialism is not an inevitability, but an economic necessity.