Here again we get telling glimpses of the complex man behind the beard. There was cash-strapped Marx, reflecting on how nobody had ever written so much about money while being so short of it. Belligerent Marx, wasting whole years on tedious feuds with an assortment of writers and revolutionaries – now long forgotten – across Europe. And, most of all, the great procrastinator who drove even the dependably loyal Engels close to despair with the endlessly postponed task of getting anything, not least his masterpiece Das Kapital, finished and delivered to the printer. Here Wheen is writing a biography of the book not the man so at the heart of it is a brilliant account of the way in which Das Kapital emerged as the work which most successfully dissected capitalism.

Marx famously pored over the Blue Books of the Victorian factory inspectorate, mining them for information on the inner workings of capital. He collated and assimilated a vast amount of detail on how the confidence trick of unrestricted capitalism would, without fail, tend towards the enrichment of the bourgeois and the impoverishment of the worker.

Yet among the 'laws' of production, the figures and tables, we see flashes of another of Marx's inspirations: The great chronicle of human emotion and endeavour that is literature. Indeed, as Wheen points out, Das Kapital can be read as a baroque literary interpretation of Victorian society of the time, a kind of non-fiction novel. The book teems with the detail and incident that characterised the great 19th century social novel. An acutely vivid prose style is placed at the disposal of the economic explication and when Marx pressed it into describing the effects of capitalism on the lives of workers he inevitably began to write high tragedy.

When Marx examines the exploitation of child labour and the manner in which attempts to regulate it were subverted by the factory owners, he reaches for a quotation from The Merchant of Venice. A law had been passed to prevent children from working stunningly long hours, but a loophole allowed factory owners to divide the day so eight year-olds still worked 12 hours out of 24:

"Workmen and factory inspectors protested on hygienic and moral grounds, but Capital answered:

'My deeds upon my head!

I crave the law,

The penalty and forfeit of my bond'."

So the character of capitalism emerges as insatiable, rapacious and, despite the river of cash that ceaselessly flows in to it, continually aggrieved. And everyone recognises this description of the unregulated Victorian capitalist system. And the reason we recognise it is because Marx's theories have been so fully incorporated into our feelings about money, and the systems in place for getting hold of it.

Wheen writes that Marx's literary style is not "a colourful veneer applied to an otherwise forbidding slab of economic exposition… it is the only appropriate language in which to express 'the delusive nature of things'". Marx described a world of capital defined by both delusion and illusion and, as Wheen remarks, such a world was not too far away from that described in the gothic novels of the time.

He goes on to say that "Das Kapital is entirely sui generis. There has been nothing remotely like it before or since – which is probably why it has been so consistently neglected and misconstrued". And it is true that Wheen, in this country at least, has been at the forefront of rescuing Das Kapital and Marx himself from such inattention. It is also true, as Wheen demonstrates, that Marx is becoming increasingly respected as the economist who got capitalism right. We can share Wheen's relish in seeing Marx praised from the unlikeliest quarters. The Economist is a publication that has not been distinguished by Marxist credentials. But it was the editor of the Economist John Micklethwait, in abook written with another Economist journalist Adrian Wooldridge, who said of Marx's description of globalisation that it is "as sharp today as it was 150 years ago".

But what about the misconstruction? The most extraordinary part of Das Kapital's biography is also the unhappiest. The monumental misreading and wilful distortion that attended the book throughout the era of communism. The association of Marx with the excesses and crimes of communism is a distortion of his thought, but it is difficult to avoid commenting on the scale with which his most deluded admirers got him wrong. That Marxism offered a release from the tyranny of history; that we could, with Marx as a guide, cut loose from the class struggle was one of the most seductive tenets of revolutionary socialism, though it seems difficult to credit it now.

The footnotes with which Marx generously annotated Das Kapital are in a different register to the text and turn out to be entertaining and enlightening in equal measure. Of Jeremy Bentham's utilitarianism, we learn that: "In no time and in no country has the most homespun commonplace ever strutted about in so self-satisfied a way". From Marx's afterword to the second German edition, we learn of the approach of the "universal crisis" that will announce the collapse of capitalism under the weight of its own contradictions. And it is here that Marx invited the misreading that followed his book throughout the 20th century. Because the feeling that there is a fundamental breakthrough to be made in the development of humankind drove communism to attempt to force that change on the recalcitrant societies it controlled.

When you follow the curve of Marx's view of capitalism, what do you see? The arrival of capitalism as an implacable and dishonourable force which disrupts everything it encounters; which seizes and ruins the lives of men and women in the cruellest ways. And all this is the dramatic prelude to its eventual defeat, to the inevitable redemption of the characters who have been so shamelessly mistreated. It is a classic 19th century narrative. A formula for which we have yet to find a more enticing or persuasive alternative.