This paper is a much revised version of a paper that was presented at El Primer Coloquio Internacional de Economía Política y Pensamiento Económico, Cuba 2005 and Rethinking Marxism 2006, Amherst, Mass.Recently a number of mainstream papers have treated the rise of democracy in 19th century Europe and its instability in Latin America in an eminently Marxist fashion. This paper sets out their implications for Marxist thought. With respect to Europe, Marx's emphasis on political action backed by the threat of violence is vindicated but his justification for socialism is not. With respect to Latin America, the unequal distribution of wealth is the cause of political instability that is, in turn, the root cause of mass poverty. In addition it is possible to explain some of the paradoxical characteristics of neo-liberalism and to make a weak argument for socialism in spite of its rejection in Europe.Finanncial assistance is acknowledged from the Spanish Ministry of Science and Education and FEDER through grants SEC2003-00306 and SEJ2006-0379, from the Barcelona Economics Program of CREA, from the Generalitat of Catalunya through grant 2005SGR00477, and from Consolider-Ingenio 2010(CSD2006-00016).Peer reviewed