Karl Marx was one of the most brilliant analysts of the raw capitalism of his times. He was also a poor prophet of its future trajectory.

His failures with the crystal ball are well known. Capitalism reformed since his death rather than collapsing in a sorry heap. The industrial proletariat moved into the middle class as real wages went up, while the nature of work was radically transformed in economies led by services. The profit rate did not fall to create the material conditions for a communist revolution. Economists such as Joan Robinson and Paul Samuelson later pointed out the fundamental accounting incompatibility between the twin Marxist beliefs of a falling rate of profit on the one hand and immiseration of the working class on the other.

Capitalism not only survived; it actually prospered despite its problems. Welfare states dulled the rough edges in the more developed economies. Absolute poverty receded in large parts of the world. Innovation helped capitalism escape not only the economic collapse that communists were told to prepare for, but even the stationary state that classical economists such as Adam Smith and David Ricardo had expected.

Eventually, the socialist revolutions did not come to advanced countries such as Germany or France, as Marx had predicted, but underdeveloped ones such as Russia and China. The wicked joke is that communism has been just a milestone in the long march of these countries from feudalism to capitalism.

This month marks 200 years since Marx was born. Few intellectuals can match him in terms of a deep impact on history. The Marxist challenge to the established order was a profound one, and perhaps the shock that social democrats needed to push through reforms. His brilliance cannot be denied. Yet, the impact of Marxism on the world over the long term has been malign. The communist regimes that claimed to be inspired by him were not only terrible economic failures but also throttled the human spirit. Marxism eventually provided intellectual cover for totalitarianism.

Some would argue that Marx cannot be held responsible for the Stalinist meat grinder that killed millions of innocents in the name of historical progress. That may be true in a shallow sense. However, several critics, such as the liberal philosopher Karl Popper, have pointed out that the cult of scientism in Marx himself ironically led to the religious belief that the laws of historical progress have been revealed to the believers. Once the inevitability of communism was considered an established fact, every opponent of the chosen few got typecast as an enemy of progress.

Joseph Schumpeter, in his 1942 book Capitalism, Socialism And Democracy, provided some of the most penetrating insights into the Marxist project. “As every true prophet styles himself the humble mouthpiece of his deity," Schumpeter wrote, “so Marx pretended no more than to speak the logic of the dialectic process of history." The ultimate truth as revealed to the ultimate prophet. He continued: “The religious quality of Marxism also explains a characteristic attitude of the orthodox Marxists towards opponents. To him, as to any believer in a Faith, the opponent is not only in error but in sin. Dissent is disapproved of not only intellectually but also morally. There cannot be any excuse for it once the Message has been revealed." To then say that the Master was in no way responsible for the acts of his Disciples does not stand the test of evidence.

The past decades have seen several innovative attempts to free Marx from the totalitarian baggage. The New Left of the 1960s went back to his humanist philosophical manuscripts of 1844. The Eurocommunists of the 1970s tried to reconfigure Marx for the needs of modern social democracies. Members of a school called the analytical Marxists stripped him of his Hegelian roots so that he could be reinterpreted using the tools of modern economics. After the collapse of the Soviet Union, the political philosopher Gerald Cohen provided a moral vision for socialism to contrast with the liberalism of John Rawls and the libertarianism of Robert Nozick, the two giants of modern political thinking. The inability of the Indian left to even join these intellectual projects tells us a lot about its openness to new ideas.

There has been a deluge of opinion in recent days on how Marx is relevant once again, given the concerns about important issues such as growing inequality, structural slowdowns and climate change. It is hard to see how classical Marxist thought or the experiences of communist regimes can provide a way forward past the challenges of this century. The fashionable nostalgia for Marxism flies in the face of more than a century of historical experience.

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