Skilord, I shan't pitch a fit, because we're not talking about denying freedom to people.
I think we're more in agreement than disagreement. What Marx failed to take into account was that capitalists, like all people, have a strong urge toward self-preservation. When the labor movements began, the capitalists initially reacted with force, but once they saw the tides moving against them, they then made accommodations with the workers.
Tell me the average factory worker in Germany, the US or France is oppressed. They are paid extremely well, are provided generous health care and retirement packages, insurance for on the job injuries, vacations, sick days, etc. What Marx failed to realize, and why I think his ideas were already old when he wrote them, is that governments (indeed all human systems) can adapt and alter themselves in order to survive. Look at the Communists in China. It's a Communist government, no doubt, but it's a CAPITALIST economy, or pretty darn close. It keeps the lid on social discontent by allowing people to improve their lot in life.
I don't think Marx was alone in this. Many people of the 19th Century failed to take into account the strong pull of traditional methods of doing things, and believed instead the modernism and industrialization would sweep away all the old ways. Well, my friend, that's crap. There are cities down here in Texas with German-names, full of people with German names, who spend a weekend or so a year having an Oktoberfest, drinking German beer and eating sausage. Then they pull on the cowboy boots, hop in their pickup truck, and holler out "see y'all next year!"
What I did like about Marx and Engels' message was how they pointed out the grotesque unfairness of the current economic modes. It was just that their proposed solution was unworkable and rather silly.