II. _Capitalist Revolution._--Transformation of industry, at first by means of simple co-operation and manufacture. Concentration of the means of production, hitherto scattered, into great workshops. As a consequence, their transformation from individual to social means of production--a transformation which does not, on the whole, affect the form of exchange. The old forms of appropriation remain in force. The capitalist appears. In his capacity as owner of the means of production, he also appropriates the products and turns them into commodities. Production has become a _social_ act. Exchange and appropriation continue to be _individual_ acts, the acts of individuals. _The social product is appropriated by the individual capitalist._ Fundamental contradiction, whence arise all the contradictions in which our present day society moves, and which modern industry brings to light. A. Severance of the producer from the means of production. Condemnation of the worker to wage-labor for life. _Antagonism between the proletariat and the bourgeoisie._ B. Growing predominance and increasing effectiveness of the laws governing the production of commodities. Unbridled competition. _Contradiction between socialized organization in the individual factory and social anarchy in production as a whole._ C. On the one hand, perfecting of machinery, made by competition compulsory for each individual manufacturer, and complemented by a constantly growing displacement of laborers. _Industrial reserve-army._ On the other hand, unlimited extension of production, also compulsory under competition, for every manufacturer. On both sides, unheard of development of productive forces, excess of supply over demand, over-production, glutting of the markets, crises every ten years, the vicious circle: excess here, of means of production and products--excess there, of laborers, without employment and without means of existence. But these two levers of production and of social well-being are unable to work together, because the capitalist form of production prevents the productive forces from working and the products from circulating, unless they are first turned into capital--which their very superabundance prevents. The contradiction has grown into an absurdity. _The mode of production rises in rebellion against the form of exchange._ The bourgeoisie are convicted of incapacity further to manage their own social productive forces. D. Partial recognition of the social character of the productive forces forced upon the capitalists themselves. Taking over of the great institutions for production and communication, first by joint-stock companies, later on by trusts, then by the State. The bourgeoisie demonstrated to be a superfluous class. All its social functions are now performed by salaried employees.