1. Average height increased throughout the 1800s
2. Life expectancy increased throughout the 1800s
3. Plenty of photos and paintings of towns that consist of middle class housing
> The system divides the populace into "capital owners" and "workers" who are in direct conflict.
That's what Marx claimed. I've had many jobs. In none of them was I ever in conflict. It was a negotiated relationship, where I provided labor and expertise in exchange for money. I've also been a boss, and if you ever have been you'd know you had no power over your employees. They only work for you because they want to. When they stopped wanting to, they simply disappear, and there's not a thing I could do about it.
In the US, every worker has the power to walk away and start their own business. The wealthy in America did not come from wealthy immigrants, they came from poor immigrants.