<P> Just as the term "mercantilism" had been coined and popularized by critics like Adam Smith, so the term "capitalism" coined by Karl Marx (1818--1883) was used by its critics . Socialism emerged in response to the miserable living and working conditions of the working class in the new industrial era, and the classical economics from which it sprang . The economic and political theory published in The Communist Manifesto (1848) and Das Kapital (1867) combined with the dialectic theory of history inspired by Friedrich Hegel (1770--1831) to provide a revolutionary critique of nineteenth - century capitalism . </P> <P> In 1845 German radical Friedrich Engels (1820--1895) published The Condition of the Working Class in England in 1844, describing workers in Manchester as "the most unconcealed pinnacle of social misery in our day ." After Marx died, Engels completed the second volume of Das Kapital from his notes . </P> <P> Marx wrote his magnum opus Das Kapital (1867) at the British Museum's library in London . Karl Marx begins with the concept of commodities . Before capitalism, says Marx, production was based on slavery--in ancient Rome for example--then serfdom in the feudal societies of medieval Europe . The current mode of labor exchange has produced an erratic and unstable situation allowing the conditions for revolution . People buy and sell their labor as people buy and sell goods and services . People themselves have become disposable commodities . As Marx wrote in The Communist Manifesto, </P> <P> The history of all hitherto existing society is the history of class struggles . Freeman and slave, patrician and plebeian, lord and serf, guildmaster and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another...The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms . It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones . </P>

The most profound change in the american economic system during the late 1800s was the