Once Karl Marx had concluded that what labourers sold under capitalism was not their labour but their labour-power (see labour theory of value), and so opened up a new dimension of analysis, he was able to shed his dependence on the inherited term division of labour as a means of conceptualizing what happens in production. Instead, he coined the term ‘relations of production’ to refer to the social relations specific to a particular mode of production, and reserved division of labour (these days the ‘technical division of labour’) for the concrete, structural composition and organization of production relations.
In chapter 7 of volume i of Capital, Marx specifies the relations of production specific to capitalism as being two-fold. The first or control relation is described as follows: ‘the labourer works under the control of the capitalist to whom his labour belongs; the capitalist taking good care that the work is done in the proper manner, and that the means of production are used with intelligence, so that there is no unnecessary waste of raw material and no wear and tear of the implements beyond what is necessarily caused by the work’. The second or ownership relation is specified far more generally: ‘the labour process is a process between things that the capitalist has purchased, things that have become his property. The product of this process belongs, therefore, to him, just as much as does the wine which is the product of a process of fermentation completed in his cellar.’
The sum total of the relations of production comprise what Marx referred to (somewhat problematically) as the ‘economic structure’ of capitalist society, or its ‘real foundation’. As such, they also account for the division of that society into classes (the ‘social division of labour’), again somewhat problematically since the nature of control and ownership has changed vastly since Marx's time. Although he did not specify them himself with any great precision, Marx also clearly thought that distinctive sets of production relations could be identified for other modes of production, and later writers have addressed this problem at some length (see, for example, B. Hindess and P. Hirst, Pre-capitalist Modes of Production, 1975). See also base.