Recently, at a celebrity-studded publishing party, I met a beautiful busty blonde who looked as though she had just stepped off the cover of Playboy magazine. “Are you a model?” I asked. “No,” she purred, “I’m a Marxist.”

Later that evening she said: “Would you like to come up to my place and see my collection of Marxist literature?” I thought she was joking – until, back at her flat, she took me by the hand, led me to her bedroom and showed me her secret passion: 40 volumes of the collected works of Karl Marx and Friedrich Engels. It was when she began to explain the intricacies of dialectical materialism that I made my excuses and left.

I was telling a friend about my strange Marxist encounter when he told me his. In May he had attended a private meeting of about 50 British academics at King’s College, Cambridge to discuss the events of May 1968. (King’s had been a hotbed of Marxist agitation and student radicalism in 1968.) My friend was shocked to find among the group a collection of hardcore, unrepentant believers whom he dubbed “the time-warp Trots”. “‘They were all old, but still had that scruffy student dress sense and scraggily beards, just like in ’68,” he said. “One poor bloke was banging on about the revolution as if it was still actually happening.”

I was surprised to hear this, for I was under the impression that Marxists were the lost tribe of British politics. Once a proud and mighty people, they had been wiped out by the virus of neo-liberalism in the 1980s.

But the marginalised and melancholic Marxists of yesterday are feeling very upbeat today. Why? It’s the economy, stupid – or should that be the stupid economy of capitalism? The credit crunch, the decline in the housing market, the Northern Rock crisis, the rising cost of fuel and food, the spectre of recession, inflation and high unemployment have highlighted crucial flaws – to their eyes – in the free market.

Even among sections of the conservative-minded middle class one hears the kind of language and anticapitalist sentiments once found only in Marxist circles. At dinner parties there is resentful talk about City “fat cats”, the “ridiculous” sums earned by venture capitalists and the growing inequalities of wealth.

Could it be that the Marxists are ready to make a comeback? This may sound like an absurd suggestion, but there was a time in the 1950s when the free-market philosophers – Milton Friedman, Friedrich Hayek et al – were considered to be a spent force. Then the postwar consensus with its belief in welfare capitalism collapsed in 1979 and the winter of discontent and those thinkers made a dramatic return in the 1980s.

A good place to see the current state of British Marxism is the annual Marxist “festival of resistance” that takes place in London. It has become the radical left’s very own Glastonbury, a place where Marxists can plan revolution and let their hair down. Organised by the Socialist Workers party (SWP), it’s a five-day think fest featuring 200 debates and events. You can discuss everything from Marx’s theory of capitalist accumulation to “queer theory”.

I went to the very first Marxist festival back in 1977, more out of curiosity than any real conviction. At that time lefties seemed to be the chosen people; Vanessa Redgrave was the poster girl of revolutionary politics. I was an idealist looking for a Big Idea and Marxism seemed to offer that. So I was curious to see how things had changed in more than 30 years: back then Marxism was in its heyday, at least among a generation of young intellectuals and academics. It was the era when sociology ruled the humanities and pot, radical politics and sexual promiscuity were all the rage – or so Malcolm Bradbury’s 1975 novel The History Man suggested.

Set in a fictitious university in 1972, Bradbury’s novel tells the story of the trendy and faddish Marxist sociologist Howard Kirk – self-appointed champion of the oppressed and the campus lothario. To many on the right, Bradbury’s novel was proof that Marxist academics were subverting the minds of the young.

But the power and prestige of Marxism quickly faded as the Kirk generation grew older and gave up dreams of revolution for careers in academia. Then came the fall of the Soviet bloc in 1989 and the Soviet Union itself in 1991. Marxism was officially dead and Francis Fukuyama, in his book The End of History and the Last Man, claimed that liberal capitalism had won the great ideological battle. So when I arrived at the opening session of the Marxism 2008 festival I expected to find only a dozen ancient Marxists raising arthritic fists as speakers denounced the evils of capitalism.

But no. The opening rally – at the central hall of the Friends Meeting House – was packed with more than 2,000 people. The audience was a mix of young and old; mature Marxist puritans from the public sector unions and punky and pierced antiglobal protester types. From all over the country they came, clutching sleeping bags, babies and their programmes to hear the likes of Tony Benn and Tariq Ali denounce capitalism.

Across walls and balconies were colour-ful banners bearing such slogans as “People, not profits” and “Renationalise now”. At one point the crowd broke out into a loud and spontaneous chant of “The workers, united, will never be defeated!” It was like stepping back in time and hearing the true believers of a forgotten faith.

The mood of the festival this year was optimistic. After all, there’s nothing like a crisis of capitalism to gladden the heart of a heartless Marxist who has been waiting for the return of class war since the winter of discontent. Tony – a lifelong trade union activist – was an old-fashioned Trot “and bloody proud of it” he told me with a smile. He was rejoicing that the Marxists’ moment had come. “The present crisis is a vindication of what we’ve been telling people for decades – capitalism is unfair and it doesn’t bloody work.”

Were all the young people I saw part of a new generation of Marxists? Not really. With the exception of younger members of the SWP, it was hard to find any young person who would call themselves a Marxist. They have a much more pick’n’mix attitude to politics than we did – a bit of green, a touch of Marx and a dash of antiglobalism is more their style.

The nearest I got to a young Marxist was John, a 20-year-old student from Essex University wearing a Lenin badge, who described himself as a “critical Marxist”. John explained his position: “I don’t accept everything Marx said. You have to take the bits that are still relevant.’”

So much for the young – what about that generation of ’68, what has happened to them? According to Frank Furedi, professor of sociology at Kent University and a former Marxist himself: “You rarely bump into a Marxist on campus these days.” According to Furedi, what you have now is a kind of “Marxism lite . . . a very simplistic view of the world that blames capitalism for all evils”.

Alex Callinicos, a leading Marxist theo-retician, a member of the SWP and professor at King’s College London, disagrees: “In the English-speaking world there’s been a significant revival of Marxism in the academy over the past few years. I’ve noticed a growing number of PhD students and young academics interested in Marxism.”

Hugo Radice is a lecturer in international political economy at Leeds University and, unlike so many academics I spoke to, is happy to admit that he is a Marxist. Does he feel a bit of a dodo? “No, not at all. There are fewer Marxists around, but Marxism as an academic discipline is very much alive in the field of international politics and economy. Also in business studies you will find plenty of active Marxists.”

Curiously, the place where Marxism seems to flourish is the United States. “If you go to college campuses in America, you are much more likely to bump into people who call themselves Marxist than in Britain,” says Furedi. “But it’s much more of a radical lifestyle thing – students wearing Che T-shirts. A Marxist has become a term for anyone who doesn’t like capitalism.”

I doubt if Marxism will ever regain the position it once had. You have only to look around to see that when the older generation of academic Marxist superstars – Terry Eagleton and Eric Hobsbawm – pass away there won’t be anyone to take their place. History may not have ended as Fukuyama claimed, but the History Men have.

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