This bit from Simon Clarke’s Marx, Marginalism and Modern Sociology — taken from Amy Kim’s excellent Constellations article ‘The Vicissitudes of Critique: The Decline and Reemergence of the Problem of Capitalism’ — is a good characterization of Lukacs and does a good job of demonstrating one of the prevalent ways the Frankfurt School is seen as developing the theory of reification.
For Lukacs reification was the product of the Weberian process of rationalisation. However in Lukacs’s own account it is not clear whether reification is the product of the subordination of reason to the power of capital, or whether it is the product of “instrumental reason” in itself. The former interpretation would take us back towards Marx, locating the source of reification in alienated labour and the fetishism of commodities. The latter interpretation, which was that of the Frankfurt School, would seem to take us back to the Weberian dilemma, for if rationality is an essential achievement of humanity, and reification a necessary result of the advance of Reason, alienation would appear to be the inevitable price of progress. The critique of alienation could then be no more than a contemplative moralistic critique.
I plan to use it when I revamp my article on reification, crisis and critical social theory to show contra Clarke and Kim that the Marxian element of reification can extrapolated from Lukacs and the early Frankfurt School, which saw crisis as inherent to the dominating logical dynamic of capital.