Marx stated that men are work. Work refers to the fact that we can produce our own means of subsistence. Men are social by nature since it's the only way we work.
What happens when men are separated from the product of their work? This was the case in Marx's time, the time when the industrial revolution had just happened. The living conditions of the working class were very bad, and the rich men exploited them. Think of Oliver Twist or Les Misérables. Men were paid the minimum amount of money so that they could continue living and keep on working.
The problem with capitalism is that it produces more wealth but for less people. The proletariat (this means, the person who owns nothing but his labor force) receives nothing from his work, despite the fact that men are work! Complement this with an involuntary division of labor and you have a very miserable life. This is what Marx called alienation.
It should be noted, to clear up some controversy, that Marx never actually proposed a solution. He died before he could explain "communism". What happened during the 20th century is far from Marx's view, since he clearly stated that there should be no State/no one superior. He just wanted us to work happily. More about Marx on my next post!