THE most exciting, if also the most troubling, change in British politics in recent years is the rebirth of ideology. During the Blair-Brown-Cameron years, political debate was imprisoned in the gilded cage of economic and social liberalism. Today that cage lies in pieces, smashed by the triple hammer-blows of the financial crisis, Brexit and Jeremy Corbyn, Labour’s socialist leader. Britain is consumed by fundamental arguments: about the role of the nation-state in a global economy; about the costs and benefits of immigration; and about the merits of capitalism.

Surprisingly, the most wide-ranging discussion of capitalism is taking place on the right. On the left, Mr Corbyn has imposed strict rules on the debate. On the right, anything goes: Tories have taken to quoting Yanis Varoufakis, a hard-left Greek economist, and Robert Reich, a soft-left American academic who once worked in the Clinton administration and author, most recently, of “Saving Capitalism”. Peering through the ideological confusion you can just about discern three groups.

Maggie v Marx

The first consists of unreconstructed Thatcherites who think that all you need to do is replay old vinyl records of Margaret Thatcher’s speeches, preferably at top volume, and the electorate will return to the true faith. This group sees Brexit as an opportunity to renew Britain’s commitment to tariff-free trade on a global scale. It argues that the solution to the problems that are driving young voters to the left lies in rolling back the state rather than rolling it forward. An article on the housing crisis by Oliver Wiseman on CapX, a news website, captured this group’s spirit in a line: “Capitalism isn’t the problem. Capitalism is the solution.”

In addition to the fact that they seem as dated as vinyl records, the Thatcherites suffer from a couple of big problems. They have played their winning cards: it was easy to win support in the 1980s when you were selling off council houses or shares in public utilities, but much more difficult when you are grappling with the problem of a shortage of affordable housing or high utility prices. And many people voted for Brexit in order to reassert control over the market, not to let it rip.

The second group wants to return to the One Nation Toryism that dominated the party before Thatcher. This group emphasises the creative power of the state to solve pressing social problems such as the shortage of affordable homes or the rise in energy prices. But it frequently comes across as nothing more than Corbyn-lite. By conceding that Mr Corbyn has a point on social housing or university fees but then offering tame solutions, such as freezing fees at £9,250 ($12,200) or building just 25,000 more social homes, the doctrine is in danger of simply whetting the appetite for Mr Corbyn’s Special Brew. The Conservative Party’s problems are deepened by the fact that its leadership swings wildly between these two positions. One moment Theresa May is celebrating the free market and condemning Mr Corbyn as a Venezuelan-style socialist and the next she is lamenting the failures of the market and aping his policies.

A third group of (mostly younger) Tories is trying to produce a more sophisticated message: one that recognises that, after several decades of pro-market policies, Britain still suffers from low productivity and social exclusion, but also grasps that the solution to these problems does not lie in going back to the big-government corporatism of the 1970s. These Tories are more open than the Thatcherites to giving the state a bigger role in helping the disadvantaged, but they are also more aware than the One Nation Tories of the creative power of capitalism.

Lots of ideas are floating around, such as giving shareholders a mandatory vote on bosses’ pay, encouraging companies to give shares to workers, and making it easier for family firms to go public without sacrificing control, through voting and non-voting shares. The danger is that these ideas become no more than a hotch-potch. To succeed, their proponents must focus on two guiding themes. The first is confronting Britain’s new vested interests. Thatcher and her successors took on trade unions and other working-class interest groups. They were much less successful with professional interest groups, which have done a remarkable job of protecting themselves from the downside of the market while enjoying the upside. Public-sector bosses enjoy a combination of private-sector pay and public-sector perks, from grace-and-favour flats to guaranteed gongs. The heads of public firms have seen their pay escalate regardless of performance.

The second theme is recognising the power of entrepreneurs. This ought to be obvious. Thatcher’s most enduring achievement was not selling off houses or utilities but freeing businesspeople from the serpentine grip of the state. The internet has increased the power of entrepreneurs to start businesses from nothing and to transform idle resources (such as spare rooms) into economic inputs. Britain is a world leader in fintech and artificial intelligence. But the current Tory leadership is blind to all of this. Its election manifesto was silent on wealth creation. Mrs May knows nothing about business. Philip Hammond, the chancellor, is interested in spreadsheets rather than world-transforming ideas. Greg Clark, the secretary of state for business, energy and industrial strategy, makes Spreadsheet Phil look charismatic.

The ideological turmoil that Britain is experiencing is forcing the country to confront long-buried problems. The risk is that it comes up with answers that end up entrenching them. It should not give more power to trade unions, as Mr Corbyn argues. Nor should it apply capitalism with a few cosmetic fixes, as Mrs May seems to think. The answer is a rebooted capitalism for a new economic era, using the power of the state where it is necessary to fix market failures and to break up vested interests, but also recognising the unique power of entrepreneurs to produce abundance out of scarcity and dynamism out of stagnation.

Economist.com/blogs/bagehot