Analytical Marxism is an academic school of Marxist theory which emerged in the late 1970s, largely prompted by G. A. Cohen's Karl Marx's Theory of History: A Defence (1978). In this book, Cohen drew on the Anglo–American tradition of analytic philosophy in an attempt to align Marxist theory with an analytic style and standard, which led to his distancing of Marxism from continental European philosophy. Analytical Marxism rejects much of the Hegelian and dialectical tradition associated with Marx's thought.

The school is associated with the "September Group", which included Jon Elster, John Roemer, Adam Przeworski and Erik Olin Wright. This group initially also playfully called themselves No Bullshit Marxists. Its theorists emphasize methodology and utilize analytical philosophy, and some of them favor rational choice theory, game theory and methodological individualism (the doctrine that all social phenomena can only be explained in terms of the actions and beliefs of individual subjects).

Origin Cohen's book, Karl Marx's Theory of History: A Defence (1978), in which he attempts to apply the tools of logical and linguistic analysis to the elucidation and defence of Marx's materialist conception of history, is generally regarded as having started the analytical Marxist approach.

Theory Analytical Marxism can be defined as 'an attempt to reconstruct the philosophical and theoretical legacy of Marxism using the tools of contemporary analytical philosophy and empirical social science.' This intellectual current emerged in the late 1970s within the Anglo-American academic sphere and developed around key figures such as Gerald A. Cohen, John Roemer, Erik Olin Wright, Jon Elster, and Adam Przeworski. They emphasized logical rigor and empirical testability, rejecting vague concepts and metaphorical expressions. To this end, they actively incorporated the methods of analytical philosophy as well as contemporary social science approaches such as mathematical modeling, game theory, and micro-level choice theory. In the process, core theses of traditional Marxism such as the labor theory of value, historical inevitability, and the base-superstructure schema were significantly criticized, revised, or abandoned.Carling, Alan. (1997). Analytical and Essential Marxism. Political Studies, 45(4), 768-783.

Historical materialism For Cohen, Marx's historical materialism is a technologically deterministic theory, in which the economic relations of production are functionally explained by the material forces of production, and in which the political and legal institutions (the "superstructure") are functionally explained by the relations of production (the "base").

The transition from one mode of production to another is driven by the tendency of the productive forces to develop. Cohen's accounts for this tendency by reference to the rational character of the human species: where there is the opportunity to adopt a more productive technology and thus reduce the burden of labour, human beings will tend to take it.

Exploitation At the same time as Cohen was working on Karl Marx's Theory of History, the American economist John Roemer was employing neoclassical economics to defend the Marxist concepts of exploitation and class.Roemer, John. (1985). Should marxists be interested in exploitation? Philosophy and Public Affairs 14 (1):30-65. In his A General Theory of Exploitation and Class (1982), Roemer employed rational choice and game theory to demonstrate how exploitation and class relations may arise in the development of a market for labour. Roemer would go on to reject the necessity of the labour theory of value to explain exploitation and class. Value was in principle capable of being explained in terms of any class of commodity inputs, such as oil, wheat, etc., rather than being exclusively explained by embodied labour power. Roemer was led to the conclusion that exploitation and class were thus generated not in the sphere of production but of market exchange. Significantly, as a purely technical category, exploitation did not always imply a moral wrong (see below). He consequently recommends that Marxists should drop their traditional focus on the micro level of the relationship between classes in production, and attend rather to the macro level of the distribution structure of property in society.

Rational choice Marxism By the mid-1980s, "analytical Marxism" was being recognized as a "paradigm". The September Group had been meeting for several years, and a succession of texts by its members were published. Several of these appeared under the imprint of Cambridge University Press's series Studies in Marxism and Social Theory, including Jon Elster's Making Sense of Marx (1985) and Adam Przeworski's Capitalism and Social Democracy (1985). Among the most methodologically controversial were these two authors, and Roemer, due to their use of rational-actor models. Not all analytical Marxists are rational-choice Marxists, however.

Elster's account was an exhaustive examination of Marx's texts in order to ascertain what could be salvaged out of Marxism employing the tools of rational choice theory and methodological individualism (which Elster defended as the only form of explanation appropriate to the social sciences). His conclusion was that – contra Cohen – no general theory of history as the development of the productive forces could be saved. Like Roemer, he also rejected the labour theory of value and, going further, virtually all of Marxian economics. The "dialectical" method is rejected as a form of Hegelian obscurantism. The theory of ideology and revolution continued to be useful to a certain degree, but only once they had been purged of their tendencies to holism and functionalism and established on the basis of an individualist methodology and a causal or intentional explanation.

Empirical analysis of class structure Erik Olin Wright, in Classes (1985), sought to empirically analyze the complex class structure of modern capitalism. He developed a typology of the "intermediate classes" such as managers, supervisors, and professionals who occupy ambiguous positions within contemporary firms. In doing so, he critically examined, reinterpreted, and sought to supplement the traditional Marxist dichotomy of "capitalists and workers." Methodologically, he employed large-scale surveys and quantitative models to explain the mechanisms through which class and economic power operate in capitalist societies.

Justice theory and normative philosophy Analytical Marxists criticized traditional Marxism for neglecting or treating moral and justice-related issues as secondary, and they actively engaged in discussions of moral and normative philosophy.

The analytical (and rational choice) Marxists held a variety of leftist political sympathies, ranging from communism to reformist social democracy. Through the 1980s, most of them began to believe that Marxism as a theory capable of explaining revolution in terms of the economic dynamics of capitalism and the class interests of the proletariat had been seriously compromised. They were largely in agreement that the transformation of capitalism was an ethical project. During the 1980s, a debate had developed within Anglophone academia about whether Marxism could accommodate a theory of justice. This debate was clearly linked to the revival of normative political philosophy after the publication of John Rawls's A Theory of Justice (1971). Some commentators remained hostile to the idea of a Marxist theory of justice, arguing that Marx saw "justice" as little more than a bourgeois ideological construct designed to justify exploitation by reference to reciprocity in the wage contract.

The analytical Marxists, however, largely rejected this point of view. Led by G. A. Cohen (a moral philosopher by training), they argued that a Marxist theory of justice had to focus on egalitarianism. For Cohen, this meant an engagement with moral and political philosophy in order to demonstrate the injustice of market exchange, and the construction of an appropriate egalitarian metric. This argument is pursued in Cohen's books History, Labour, and Freedom (1988), Self-Ownership, Freedom and Equality (1995) and If You're an Egalitarian How Come You're So Rich? (2000b), Rescuing Justice and Equality (2008).

Cohen departs from previous Marxists by arguing that capitalism is a system characterized by unjust exploitation not because the labour of workers is "stolen" by employers, but because it is a system wherein "autonomy" is infringed, and which results in a distribution of benefits and burdens that is unfair.Cohen, G. A. (1979). "Capitalism, Freedom, and the Proletariat." rev. and rep. In his On the Currency of Egalitarian Justice and Other Essays in Political Philosophy. (Michael. Otsuka, ed.) Princeton Univ. Press (2011), pp. 147-165. Who gets what out of a market transaction reflects, among other things, the relative power of the players. Jettisoning the labor theory of value, Included in History, Labour, and Freedom (1988), pp.209-238. Cohen argues that it is the "structure of proletarian unfreedom" that puts workers in a position that they must work for some capitalist. Included in History, Labour, and Freedom (1988), pp.255–285. In the traditional Marxist account, exploitation and injustice occur because non-workers appropriate the value produced by the labour of workers. This would be overcome in a socialist society where no class would own the means of production and be in a position to appropriate the value produced by labourers. Cohen argues that underpinning this account is the assumption that workers have "rights of self-ownership" over themselves and thus, should "own" what is produced by their labour. Because the worker is paid a wage less than the value they create through work, the capitalist is said to extract a surplus-value from the worker's labour, and thus to steal part of what the worker produces, the time of the worker and the worker's powers.