The concept of late capitalism (German: Spätkapitalismus), sometimes also translated as late-stage capitalism, was first used in a 1925 publication by the German social scientist Werner Sombart (1863–1941) to describe the new capitalist order emerging out of World War I. Sombart claimed that it was the beginning of a new stage in the history of capitalism. His vision of the emergence, rise and decline of capitalism was influenced by Karl Marx and Friedrich Engels’s interpretation of human history in terms of a sequence of different economic modes of production, each with a historically limited lifespan.
As a young man, Sombart was a socialist who associated with Marxist intellectuals and the German Social Democratic Party. Friedrich Engels praised Sombart’s review of the first edition of Marx’s Das Kapital Vol. 3 in 1894, and sent him a letter. As a mature academic who became well known for his own sociological writings, Sombart had a sympathetically critical attitude to the ideas of Karl Marx — seeking to criticize, modify and elaborate Marx's insights, while disavowing Marxist doctrinairism and dogmatism. This prompted a critique from Friedrich Pollock, a founder of the Frankfurt School at the Institute for Social Research. Sombart's clearly written texts and lectures helped to make "capitalism" a household word in Germany and beyond, as the name of a socioeconomic system with a specific structure and dynamic, a history, a mentality, a dominant morality and a culture.