According to Karl Marx, capitalism functions in such a way that its appearance differs from its essence. What happens in the marketplace conceals what is happening in the sphere of production. His theory of “commodity fetishism” elaborates on that claim, and it leads to the theory of “reification.” Both are sketched below.
Any economist knows that a commodity has two aspects: its use-value (its utility for the consumer) and its exchange-value (the price it commands). In Capital, Marx points out that, as a use-value, the commodity is something natural and particular, concrete, while as an exchange-value it is purely the proportion of goods it can be exchanged for. It “embodies” this proportion, so to speak; it is an abstract thing, a quantity, and as such is qualitatively equal to every other commodity. In this sense, commodities are abstract and comparable to each other; as use-values, though, they are just themselves, i.e., their manifold concreteness. They therefore have a dual phenomenology: they can be experienced as themselves, as things that were produced to have a specific telos and with whose natural properties one interacts, or they can be experienced as “alienated” from their utility-essence, by being viewed as a mere quantity of value. This second, alienated, aspect is the form they take in the marketplace.
The exchange-values of commodities appear to the consumer to be objective, “socio-natural” properties of the things themselves. Thus, commodities, as exchange-values, seem to take on a life of their own: price-movements are mysterious objective facts, things that just “happen”—determined by forces outside people’s control, by mysterious interactions between the things themselves when they enter the market. Exchange-relations between commodities confront the producer and the capitalist, and the seller and the buyer, as brute facts, impersonal and seemingly inexplicable. In reality, of course, exchange-relations are in no sense properties of the things themselves: they do not exist outside social relations, as appears to be the case, but rather express them. Exchange-values are really expressions of relations between people—between workers and competing workers, capitalists and competing capitalists, workers and capitalists, etc. Movements of prices, which are determined by the fluctuations of supply and demand, serve to allocate social labor, by providing economic agents with information they need to make economic decisions. For example, when the demand for a product increases, its price will rise because selling that product has become more profitable. At the same time, the seller may well demand more of the product from its manufacturers (so as to sell more of it and make a higher profit), who will therefore either raise its price or move proportionately more labor into its production than into the production of other goods. Hence, in the economy as a whole, a change may take place in the allocation of labor. The higher price of the product expresses the higher value of the labor that goes into producing it—that is, the now-greater social necessity of employing labor in production of this particular commodity. So its price is basically a monetary expression of the changed relation between spheres of labor, and between individual laborers, even though it seems to express only a relation between things themselves.
Thus, in a capitalist society relations between people are reified into relations between things. And these thing-like relations are seemingly subject to their own laws of movement. The result is that “a man’s activity becomes estranged from himself, it turns into a commodity which, subject to the nonhuman objectivity of the natural laws of society, must go its own way independently of man just like any consumer article.” Social activity in general acquires more and more this alienated character, this character of being determined by strange forces outside the individual’s control. One can’t find a job in a certain sector, so one has to enter another until something happens and one gets laid-off, etc.; relations between friends and family members are conditioned by the impersonal functioning of the economy, and one feels increasingly like a cog. One is compelled to take jobs one doesn’t want; one desires mindless entertainment and release from the unpleasant “realm of necessity” (hence the love of video-games, television, “smart phones”); and one’s relationships become increasingly dysfunctional. Ultimately, “just as the capitalist system continuously produces and reproduces itself economically on higher levels, the structure of reification progressively sinks more deeply, more fatefully and more definitively into the consciousness of man,” such that life becomes more stressful, more mysterious, more atomistic. It comes to be dominated by the half-conscious perception of a vast impersonal Other that gets associated, in his mind, with the faceless strangers he sees, with the company he works for, with his boss, with his dissatisfaction and his unfulfilled desire for self-confirmation (for freedom). He develops an amorphous hostility, sort of an indiscriminate distrust that colors his relationships with people.
Of course, the culture of our own late capitalism exacerbates alienation in ways not analyzed by Marx. See, for example, the movie Office Space, and just think of the vulgar, dehumanizing nature of pop culture in a consumer-capitalist society.
 Georg Lukács, History and Class Consciousness (Cambridge, Massachusetts: 1971), p. 87.
 Ibid., p. 93.