Sure. And he assumed that condition would not change and would in fact get worse over time. He was wrong. Karl Marx did not understand that modern industrialism breaks the thousands of years old zero-sum nature of economics. And it's not unreasonable for him to have missed it. That rule had been the case for the entire history of human economic endeavors. For one person to get rich, someone else had to be poor.
Woah, buddy, stop right there.
Economics have never been a zero sum game...
That's almost a matter of semantics. I'd say that it was much more often a zero sum game prior to the industrial revolution than afterwards.
capitalism is no different from any other system in this regard.
Can you spot what you did wrong there? I didn't say that "capitalism" changed economics to a non-zero-sum game. I said that "modern industrialism" (combined with capitalism to be sure) did.
Increased utility has always been created by economic activity, or there would, by it's nature, be no economic activity.
Not "no economic activity", just less economic growth. Let me bottom line this, true economic growth only comes about in one of two ways:
1. You increase the total resources you have available to use.
2. You increase the efficiency with which you use those resources.
For most of the history of man, economic growth has mostly be affected by the first method. A country wages war on another country and takes stuff from them. Or it colonizes and utilizes new lands (which usually also requires making war on those who were formerly living there). Increases in utilization efficiency did occur, but were minor and rare. Every once in awhile, someone came up with a better way to make bread, or to construct ships, or forge metal. But only every once in awhile.
Also, for most of human history economies of scale have limited resource use. It requires progressively greater amounts of total resources the more of something you make. It's pretty easy to get someone to make a wicker basket for you. But try to buy a hundred million of them in a pre-industrial civilization and you'll find it impossibly expensive.
As a result of these factors, economics in the immediate term at least really could be thought of as zero sum. A given section of land will produce so much grain, or lumber, or wool, or whatever in a year of working that land. The total is all you have. If the land owner gets more it pretty much always means that the poor folks working on his land gets less. This is where the concept of the rich taking from the poor comes from btw. It's based on the sort of European land-use economic model which we had prior to the industrial revolution.
Industrialization changes all of that. Economies of scale reverse. It might cost a lot to build a wicker basket making machine, which means that the first basket is very expensive. But the more baskets you make the less expensive they are in terms of cost per basket
. This allows for the production of massive quantities of things while decreasing the total resources per thing being consumed. The total production capable is no longer limited to land and labor (or not as much limited). In economic terms, it pretty much turns everything on its head.
Marx didn't realize this. And to be fair, it would have been easy to miss in the mid 19th century. He saw wealthy industrialists becoming increasingly more wealthy, without the workers earning more wages and since all his knowledge of economics meant that the workers wages must themselves be deflated because the wealth of the rich had to come from somewhere, he assumed a steadily degrading system in which the poor got poorer while the rich got richer. He simply didn't take into account the effect that the massive increase in productive output would have on the cost and availability of products *and* the introduction of new and never even dreamed of things.
He had an excuse for not seeing it. He didn't have the luxury of a century and a half of industrialization transforming our lives. But those living today shouldn't still cling to his mistake. He was wrong about the effects of industrialization and capitalism. He was wrong to assume that we required the creation of some new economic system in order to protect us from what was going on. We didn't. Capitalism worked with this new industrialism just fine and created a much better world than any system based on Marx's ideas did.