This year marks the 160th anniversary of The Communist Manifesto and capitalism–a k a “free enterprise”–seems willing to observe the occasion by dropping dead. On Monday night, some pundits were warning that the ATMs might run dry and hinting that the only safe investment left is canned beans. Apocalypse or extortion? No one seems to know, though the populist part of the populace has been leaning toward the latter. An e-mail whipping around the web this morning has the subject line “Sign on Wall Street yesterday,” and shows a hand-lettered cardboard sign saying, “JUMP! You Fuckers!”

The Manifesto makes for quaint reading today. All that talk about “production,” for example: Did they actually make things in those days? Did the proletariat really slave away in factories instead of call centers? But on one point Marx and Engels proved right: within capitalist societies, or at least the kind of wildly unregulated capitalism America has had, the rich got richer, the workers got poorer, and the erstwhile middle class has been sliding toward ruin. The last two outcomes are what Marx called “immiseration,” which, in translation, is the process you’re undergoing when you have cancer and no health insurance or a mortgage payment due and no paycheck coming in.

Marx predicted that capitalism would fall in a spirited, proactive, fashion: the workers, fed up with immiseration, would revolt, seize the “means of production” and insist on running the show themselves, that being the original, pre-Soviet, notion of socialism. The revolution didn’t happen, of course, at least not here. For the past several years, American workers have sweetly acquiesced to declining wages, rising prices, speed-ups at work, disappearing pensions and increasingly threadbare health insurance. While CEO pay escalated to the eight-figure range and above, so-called ordinary Americans took on second jobs and crowded into multi-generational households with uncomfortably long waits for the bathroom.

But all this immiseration–combined with fabulous enrichment at the top–did end up destabilizing the capitalist system, if only because , in the last few years, America’s substitute for decent wages has been easy credit. Until about a year ago, we got almost daily messages, by telemarketer and by mail, urging us to consolidate our debts, refinance our homes, transfer our debts from credit card to another and try tasty new mortgages that didn’t even require a down payment. All too often, we bit. It sounded so reasonable, for example, not to let our assets just “sit” in our houses but to start spending that money now.

At the other, Learjet, end of the economic spectrum, there was the problem of what to do with too much money. Yes, this can be a problem. Some of the super-rich have to hire consultants to help them spend their money: Where do you get a $20,000 bottle of wine or find a Picasso for the bathroom wall? More seriously, there was the problem of what to invest in. As Chuck Collins of the Working Group on Extreme Inequality has pointed out, huge concentrations of wealth can function like rogue waves, smashing around recklessly in their search for ever higher returns. A lot of these money waves flowed, directly or indirectly, into the dodgy credit schemes that were engulfing the un-rich majority, leaving even the fat cats imperiled by the toxic debts of the subprime class.

Marx’s argument was that the coexistence of great wealth for the few and growing poverty for the many is not only morally objectionable, it’s also inherently unstable. He may have been wrong about the reasons for the instability, but no one can any longer deny it’s there. When the greed of the rich collided with the needs of the poor–for a home, for example–the result was a global credit meltdown.

Obviously, the way to address the crisis is to deal with the poverty and inequality that led to it: bail out people facing foreclosures, increase food stamp allotments, extend unemployment insurance and make a massive job-generating, public investment in infrastructure–and, since medical debts are the number-one cause of personal bankruptcy, enact universal health insurance immediately. But not even Obama, whose lawn sign I still proudly display, seems to have the stomach for such a “trickle upwards” approach. He has announced that he won’t bother taking the bailout as an opportunity to change the bankruptcy law so that people facing foreclosure can renegotiate their mortgages.

So happy birthday, Communist Manifesto–although I’m hoping that capitalism survives this one, if only because there’s no alternative ready at hand. At the very least, we should get some regulation and serious oversight out of any bailout deal, meaning that, yes, the economy will look a little less like “free enterprise.” But one thing we should have learned in the last week, if not the last year, is that, when applied to enterprise, “freedom” can be just another word for someone else’s pain.