Economic determinism is a theory that economic relationships (such as being an owner or capitalist, or being a worker or proletarian) are the foundation upon which all other social and political arrangements in society are based. The theory stresses that societies are divided into competing economic classes whose relative political power is determined by the nature of the economic system. In the version associated with Karl Marx, the emphasis is on the proletariat who are considered to be locked in a class struggle with the capitalist class, which will eventually end with the revolutionary overthrow of the capitalist system and the gradual development of socialism. Marxist thinkers have dismissed plain and unilateral economic determinism as a form of "vulgar Marxism", or "economism", nowhere included in Marx's works.
In the writing of American history the term is associated with historian Charles A. Beard (1874–1948), who was not a Marxist but who emphasized the long-term political contest between bankers and business interest on the one hand, and agrarian interests on the other.
According to Marx, each social mode of production produces the material conditions of its reproduction, that is, ideology (which gathers all the political, law and cultural spheres). Thus, ideology permits the mode of production to reproduce itself. Furthermore, Marx and Engels are said to have believed, should a revolutionary force change the mode of production, the dominant class will immediately set out to create a new society to protect this new economic order. In the modernity of their era, Marx and Engels felt the propertied class had essentially accomplished the establishment of a new societal and economic order, instinctively creating a society protective of their capitalist interests. They made this statement to the Bourgeoisie in the Communist Manifesto: "Your very ideas are but the outgrowth of conditions of your bourgeois production and bourgeois property, just as your jurisprudence is but the will of your class, made into law for all, a will whose essential character and direction are determined by the economic conditions of the existence of your class." The young Marx hence criticized man's alienation, a concept which he later replaced by the critique of commodity fetishism. "Vulgar Marxism" has considered that the relation between the economical infrastructure and the ideological superstructure was a unicausal one, and thus believed in economic determinism. This has been criticized by various Marxist theorists, who dismissed it as a form of economism or economic reductionism. They claimed the relationship is much more reciprocal and complex than unilateral determinism would have it.