For decades, neoliberal globalisation has been one of the left’s foremost targets. The International Monetary Fund, the World Bank and the World Trade Organisation are regularly denounced as enthusiastic proponents of the “Washington Consensus”, which champions free trade, financial liberalisation, tax cuts and privatisation around the world.

Historically, many socialists have viewed the European Union as an ally of such institutions. The Canadian economists Sam Gindin and Leo Panitch, for instance, regard the EU project as part of the “continuing integration of European and American capitalism”. In the 1975 referendum on UK membership of the European Economic Community, Jeremy Corbyn and his mentor Tony Benn opposed the EEC as an obstacle to the socialist transformation of the UK.

And yet, in recent years, many self-described progressives have come to view the EU as a benign force in global affairs. The Brexit referendum reopened a long-dormant question: whose side is the EU really on?

From one perspective, Friedrich Hayek, the intellectual godfather of neoliberal economics, heavily influenced the creation of what became the European single market, with its cardinal commitment to the free movement of goods, services, labour and capital. The EU’s trade policy is also rooted in free-market principles (although the protectionist Common Agricultural Policy has had a disastrous effect on farmers in the global south by dumping artificially cheap produce in their markets).

In spite of this, many of the most fervent Brexiteers, such as the Conservative MEP Daniel Hannan, are also unashamed neoliberals. And the EU’s commitment to protecting the environment, promoting workers’ rights and tackling tax avoidance has led many on the left to argue that it is one of the strongest challengers to market rule.

What the prevalence of Euroscepticism on both the socialist left and the neoliberal right shows, above all, is that the EU’s institutions act to reinforce the status quo.

In the era before the 2008 financial crisis, many regarded this as a virtue. Capitalism, Francis Fukuyama and others argued, had unambiguously triumphed in the battle of ideas. The EU’s role was to constrain the worst excesses of the free market. Benevolent European social democracy, contrasted with its extractive Anglo-American cousin, was seen as the future of progressive politics.

Yet history was far from over. The financial crisis exposed the so-called Great Moderation – the era of consistent economic growth and low inflation – as little more than a speculative bubble, and reopened the terrain of ideological debate.

In the context of austerity, wage stagnation and the end of asset price inflation, socialist transformation is once again a genuine possibility. Europe’s social democratic model is under threat as vacillating centre-left parties fail to adapt to the realities of the post-crash era, opening the way for the rise of the far right.

Today, the radical left in the UK, the US and France is calling not for social democracy but for democratic socialism. For me, the former means the taxation and regulation of private enterprise, while the latter means the democratic ownership of most large corporations and financial institutions. In other words, the former entails a compromise between capital and labour, while the latter entails a confrontation.

There is no doubt where the loyalties of the European Commission and Council – the two executive bodies of the EU – would lie in such a confrontation. European politicians and bureaucrats would side with capital, just as they did when the French Socialist president François Mitterrand was forced to retreat from his interventionist economic programme by the bond markets in 1983.

There are many legitimate questions about how a left-wing exit (Lexit) from the EU would take place, whether the Labour Party could maintain sufficient domestic support and whether withdrawal would further aid the far right. But the essence of the case for Lexit is that it is not possible to implement socialism without a confrontation with capital and its representatives in institutions such as the EU.

Far from advocating “socialism in one country”, then, Lexit supporters aspire to construct an alternative international order.