A mass of declassed people, excluded and set apart from the proletariat, which lives economically on illegal trafficking, the criminal economy, begging, state or private patronage, or a combination of all these.
Proletariat vs. lumpen
The lumpen are not the pre-proletarian "vagrants and rogues" torn from the fields and the common lands; they are an uprooted product of the decomposition of bourgeois society.
The "dangerous class", [lumpenproletariat] the social scum, that passively rotting mass thrown off by the lowest layers of the old society, may, here and there, be swept into the movement by a proletarian revolution; its conditions of life, however, prepare it far more for the part of a bribed tool of reactionary intrigue.
Karl Marx and Frederick Engels. Communist Manifesto, 1848
Because of their economic activity, often linked to organized crime, and their individualism, they are closer to the petty bourgeoisie than to the proletariat. Marx ironizes about the mirror-like relationship between the speculating bourgeoisie and the lumpen, given the parasitic and nihilistic character of both classes.
While the financial aristocracy made the laws, ran the administration of the state, disposed of all the organized public powers and dominated public opinion through the actual state of affairs and through the press, the same prostitution, the same shameless fraud, the same mania to get rich, not through production, but by pocketing the already created wealth of others, was repeated in every sphere, from the court to the café borgne.
And notably, at the top of bourgeois society, there spread an unbridled pursuit of the satisfaction of the most unhealthy and dissolute appetites, which at every step clashed with the very laws of the bourgeoisie; an unbridled licence in which, by natural law, the wealth derived from gambling seeks its satisfaction, in which pleasure turns into debauchery and in which money, filth and blood flow together. The financial aristocracy, in its methods of acquisition as much as in its pleasures, is nothing but the rebirth of the lumpenproletariat at the top of bourgeois society.
Karl Marx. The Class Struggles in France, 1848 to 1850, 1850.
Politically they form a dangerous group, opposed to the class movements of the workers and often used as an instrument against them. The mere association with the lumpen, or attempts to organize it into "gangs" under the authoritarian leadership of some workers' leader, are regarded as treason from the very first moments of the political affirmation of the workers.
The lumpenproletariat, that scum made up of the demoralized elements of all social strata and concentrated mainly in the big cities, is the worst of all possible allies.
That rabble is absolutely venal and utterly brazen. When the French workers wrote on the walls of the houses during each of the revolutions: "Mort aux voleurs!" Death to thieves!, and indeed shot more than one, they did not do so in a fit of enthusiasm for property, but in the full awareness that it was necessary above all to get rid of that gang. Every workers' leader who uses elements of the lumpenproletariat as his personal guard and relies on them proves by that fact alone that he is a traitor to the movement.
Frederick Engels. Preface to The Peasant War in Germany.