Socialism is back. It’s been gone for decades, unmentioned and unused, a dead concept. Then suddenly, there it was.

The word returned with the rise of Bernie Sanders and the movement around him, a vast rolling insurgency of youth, union workers, rural people doing it tough and more people of colour than the mainstream media was willing to admit. But Bernie’s “revolution” wasn’t actual socialism in any important sense. The Brooklyn union lawyer turned Vermont senator proposed universal state-provided healthcare, no-fee university tuition and government-protected wages and conditions.

In American terms, it was earth shattering; in the wider world, it barely qualified as “social democracy”. Yet less than a year after Bernie’s near miss in the primaries, Jeremy Corbyn scored a triumph in the British elections, leading the Labour Party in a campaign whose manifesto called for the actual “renationalisation” of the railways, disastrously privatised in the mid-1990s, and for a government-run energy provider (alongside private entities), and a state investment bank. When details of the manifesto emerged, the Tories couldn’t believe their luck. Corbyn was still a diffident, uncertain leader, and his party was arguing for actual nationalisation, a dread word summoning memories of the ’70s – garbage in the streets and unsellable government-produced cars. Labour was painted as a gang of loony Marxists by the Tory-dominated media, and was also hit with heavy criticism from The Guardian, increasingly dominated by a centrist, elite politics. But Corbyn found his sweet spot as a campaigning party leader, and a public ravaged by skyrocketing inequality didn’t mind the idea of state intervention. He gained 41 per cent of the vote, and in the latest poll was on 46 per cent, which would give Labour a winning majority.

British Labour’s stunning result has broken through. For the first time in decades in the Anglosphere, large numbers of people are willing to think of the state’s role in the economy as being something more than an enabler of private capital, a limited safety net and corporate regulator. The shift comes at a propitious and significant time, more or less a decade since the first cracks began to appear that would lead to the global financial crisis, beginning with the United States subprime mortgage crisis. The 2008 crash itself came at the end of nearly three decades of market triumphalism, and the belief in small government, the invisible hand, and other gnomic doctrine. The tumbling markets and then the collapsing banks made clear what was really at the root of the post-Cold War “boom”: debt, underwritten first by China and other developing countries – so they would have markets to sell to – and then by ourselves, as we borrowed from our future with private debt, with the belief it would seed fabulously expanding economic growth. Instead, it was pumped into consumption and disguised inflation bubbles such as the housing market, while manufacturing and industry was further sent offshore, and public infrastructure and social conditions were allowed to decline.

After the crash created a revenue gap, “austerity” was imposed in Britain and continental Europe, and used by a Republican congress in the US to stymie Barack Obama’s plans for a recovery with green industrial reinvestment. When it became obvious this was sucking demand out of the economy, a panic-driven policy of printing money – so-called “quantitative easing” – was inaugurated, flooding the world with trillions of dollars that stimulated relatively little growth but further added to hidden inflation. Interest rates hit zero and then went negative, amid a desperate attempt to get the cash out the door. The trillions in QE did no more than fill the gap created by relentlessly falling wages and the beginnings of the full automation revolution in hitherto large-scale employment sectors. With QE cash flowing to the financial sector and staying there, the rich became the super rich, and the super rich became the mega-rich, primped and pomaded like The Hunger Games elite.

Meanwhile, lifelong debt has become incorporated into people’s lives. Low-income, casualised workers are cut off from prospects of improvement. The middle class – disproportionately those benefiting from inheritance and intergenerational capital – work in largely pointless jobs, while a credit shift and a change in the price of their debt could unbalance their precarious existence. “New” labour parties simply abandoned their founding goal of fighting for economic equality. Their caste-like leaders live sequestered lives running from university through politics, to business and lobbying, undisturbed by the return of ever-widening class inequality, so long as the nation itself functions as a business on the world market.

While the neoliberal capitalist system has thus delivered little by way of solidity, security, equality of opportunity, or gains from productivity rising in multiples over decades, it has been excellent at pumping out propaganda declaring it to be not only the best way to do things, but simply a cultural expression of the inevitable natural order. The tech sector’s super rich increasingly subscribe to a futurist libertarianism, which sees technology and “genius” replacing government and representation altogether. Mass culture, which once centred on dramas exploring how human beings live together, is now dominated by “reality” shows featuring contrived competitions of all-against-all.

Many millions of people have not only lost a stake in the current society, they have been deprived of the recognition and sense of worth that a pre-neoliberal culture extended to ordinary lives. Today, feelings of being annihilated, blindsided and disregarded are simply the cultural weather of public life.

From 2008 the gap between appearance and reality yawned so wide that not even the vast and insistent output of propaganda could cover it. This produced insurgencies of right and left: Trump and Sanders in the US, Farage and Corbyn Labour in Britain, Le Pen and Mélenchon in France. Though all have been lumped together as populists, this is simply more propaganda. The nationalist right promise everything to everyone: a recollectivised national economy as well as a crackdown on “deadbeats”; fiscally balanced good government and a preservation of entitlements; a turn inwards and global dominance and respect. Trump, the sole electoral victor of this wave, is now piloting a new healthcare program that combines vast, deadly cuts to Medicaid with tax cuts for the rich. In Britain, it is becoming clear to many that Brexit will deliver no mysterious “liberation”, and instead will devastate export industries. France’s runoff electoral system produced the counter-trending Emmanuel Macron, but if his intention is to become a late-blooming M. Le Blair, he will find both right and left roaring back.

The failure of the neoliberal era has undermined the right’s narrative – that of free-market politics, and government that is small save for authoritarian enforcement of so-called traditional values – and made scare stories of demonic socialism less persuasive. That is not least because it has become clear that the only way to keep capitalism spluttering along is for the government to subsidise and, if necessary, purchase it outright. The Adani Carmichael mine is a symbol of this not merely for Australia, but the world – a begrimed Pluto emerging from the underworld in rural Queensland, proposed by a company seeking billions in favourable loans and grants from desperate governments, and billions more in free infrastructure that will have no other use. The grants are not to bring the coal to market – they are to substitute for the fact that there is no market for it. The innovation of high-tech renewable energy develops exponentially with the speed of Moore’s law; the coal-bludgers lumber along on foot, eating their own dust. This will be repeated in old industry after industry, as their capacity for profitability decays from within.

Such government subsidy is not socialism – it is crony state capitalism – but it finally and fully undermines the argument against a small state. Deprived of that virtue stick, the right have ditched economics altogether and returned to the paranoid political style, focused on values, threats and a barely concealed politics of whiteness. The Institute of Public Affairs, which once led with free-market politics, has become the think-tank equivalent of the bloke in the pub muttering about “swarthy types”. The Daily Telegraph has descended to Lambing Flat racism, labelling Sydney as “Chinatown” because, after 20 years of bipartisan high-volume colourblind immigration, our cities are ceasing to be overwhelmingly European in character. Quadrant magazine, once a serious intellectual contender, publishes slavering fantasies of ABC and The Wheeler Centre audiences being shredded by nail bombs. A Sky News presenter declares the Grenfell Tower atrocity, caused by flammable cladding, to be the fault of “green ideas”. The Australian’s op-ed page publishes extensive praise of Cleon Skousen, a virulently anti-Semitic American conspiratorialist. A young Muslim woman commentator becomes the subject of a media hate campaign so brutal it ends with someone hoping she is run over by a rogue driver.

The lower depths of the right, in their defeat, have become feverish and poisoned, and they infect right-wing politics as a whole, because the centre-right are too cowardly to thoroughly denounce them and mark a decisive separation. Their Thatcherite/Reaganite/Howardist politics was always magical thinking. Now that it is revealed as such, they believe they will succeed through redoubled exhortation. You’d have to be short-sighted indeed not to see that such politics is simply a mirror of the anguished position that Marxism in the West found itself in, in the 1970s and 1980s – stuck with a dud politics, endlessly rubbing the falling rate of profit, re-reading Lukács one more time and hoping that the genie of revolution would emerge. The right today makes that look rational by comparison.

The socialism or social democracy that is re-emerging is, by contrast, more chastened and circumspect. By and large, radicalism is no longer expressed by dreams of millenarian revolution, but simply by the idea that local, national and global societies must be run as a tripartite process of state, market and community institutions, with a “democratically enabling” state enforcing limits to the private sector, mandating social-economic spaces into which community/open/free/collective activities can expand, and having democratic socialised ownership, whole or part, of key economic sectors. That means ultimately that energy, water, resources, finance capital and communications infrastructure should be seen as social in nature, part-owned by the state, and certainly steered by it, through, for example, elected public boards. It means recognising that when corporations such as Google become monopoly default resources, they have de facto socialised themselves and institutional arrangements should reflect that.

This is essentially the renewal of a conversation that was rudely interrupted in the 1970s. However, should the left want to genuinely draw a mass to its support, it will have to abandon impossible notions of internationalism or borderlessness, and combine a social democratic politics with a genuine communalism, replacing the symbolic patriotism spruiked by the free-market right. After all, the only reason Corbyn Labour got a hearing was because Brexit had decided the question of open borders in advance, and in the negative. Labour simply had to commit to abiding by the referendum result and the public was satisfied. Had they been stuck defending open borders, Corbyn would now be on the way to being a Trivial Pursuit question circa 2027. Should the left fail to offer people the social democracy they want, the right will fill the breach, and this time they will not falter.

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