Britain’s current economic system is not scarred by insecurity. It is based on insecurity. The insecurity that defines the lives of millions of people does not represent a flaw in the system. It is the system.

From the late 1970s, the ideological rationale of the Thatcherite experiment was that British citizens had become mollycoddled by the state, by collectivism, by welfarism, by socialism, by trade unions. By making people less secure – or less dependent, as the Thatcherites would have it – they would work harder and aspire more. Put someone on a treadmill, and they have to run.

“Stand on your own two feet” has been a convenient rationale to redistribute wealth and power to the top, though. The individual earns money by their own efforts – a baseless myth – and therefore taxes on the rich should be slashed to reward hard effort. But it is a sincere belief among the Thatcherite true believers who designed our society that only by breaking collective bonds can the individual truly flourish, and an entrepreneurial economy be built.

That promise has never been fulfilled. Indeed, in the past five years, consumer debt has surged by nearly a fifth. That’s because we have an economic model that, even when it generates growth, is incapable of increasing living standards for millions of people. Instead, it actively breeds financial insecurity and forces millions to rely on credit.

All of that was inevitable for a number of reasons. Thatcherism sought to crush trade unionism in the 1980s with a combination of punitive anti-union legislation, victories such as the one over the striking miners, and mass unemployment. Theresa May’s government has since introduced more repressive legislation. Unionism is the ultimate sin, in Thatcherite ideology. Weakening it has allowed bosses to depress wages.

Then there is the housing crisis. The dramatic expansion of council housing in postwar Britain inculcated a socialist mentality, or so the Thatcherites thought. Sir Keith Joseph, one of Thatcher’s closest ideological allies, believed that homeownership would help “permit the forward march of embourgeoisement”. By turning tenants into homeowners, they would begin to think, act and vote like capitalists – or so the philosophy went. In practice, it meant that council housing with genuinely affordable, social rents, as well as the possibility of lifetime security, was decimated.

A large portion of sold-off housing stock would later be let out by private landlords at much higher rents. The private rented sector was deregulated, ensuring that landlords had security but tenants did not. House prices, meanwhile, were dramatically inflated.

The consequence? The stripping away of housing security, and the erosion of living standards. A report by the Resolution Foundation this week found that the average share of income spent by families on housing has trebled in the past 50 years. Young people today are four times more likely to rent than they were two generations ago, with nearly a quarter of their income being spent on housing. If people borrow to keep a roof over their heads, who can blame them?

The stripping away of secure jobs has had its impact, too, thanks to privatisation of utilities and deindustrialisation. The proliferation of zero-hours contracts, bogus self-employment and temporary and agency contracts increasingly defines modern work. This benefited employers, because casualised work is harder to unionise, and it means rights that workers once took for granted – such as a pension, or paid sick and maternity leave – can be stripped away. This is an intentional strategy by bosses, enabled by Thatcherite deregulation, and one New Labour failed to reverse. In 2009, the CBI – the bosses’ federation – called for the recession to be used to create a “flexiforce”, with a reduced core workforce and more casualised labour. And what does precarious employment mean? Sudden drops in income – and a consequent dependence on debt. The precariousness of work adds to the debt problem.

The Thatcherites saw evil in the welfare state. They cast it as a source of dependency, and said it turned swaths of the population into clients of the government. There was bitter irony because the Thatcherite elimination of industries in the 1980s prompted a dramatic increase in the numbers dependent on the welfare state.

The proliferation of zero-hours contracts, bogus self-employment, temporary and agency contracts define modern work.

Over the past seven years, the still-hostile Tories have imposed real-terms cuts on in-work benefits, slashed disability benefits, and punished the victims of the housing crisis by taking the axe to housing benefit. The explosion of benefit sanctioning, where benefits can be stopped for the most arbitrary reasons, has left some without any money at all. Those on the receiving end have often been compelled to make up the shortfall by borrowing. A government that professes itself concerned about debt pushes poor people into it daily.

Brexit has also played its part, contributing to a resumption in Britain’s appallingly protracted squeeze on wages, and with it a surge in consumer debt. There is no single factor that drove the close – but supposedly unthinkable – referendum result, but insecurity surely played a critical role in the vote.

Thatcherism built our economic order on insecurity. Insecurity, we were told, was about setting the individual free. But since then we’ve learned much about insecurity, even if the Tories haven’t. It is oppressive. It leads to anxiety and stress. It forces would-be parents to delay having families. And, as we see, it saddles the individual with debt.

The Tories have a crisis with younger people. George Freeman, Theresa May’s policy chief, is among those desperately trying to come to grips with it. But they are the stewards of our current insecurity. How can they possibly gain support without breaking from that favoured model? They have built a society where the only true security applies to those at the top. That’s no accident: it’s done by design. Consumer debt is the flashing light that proves their economic model is broken.

• Owen Jones is a Guardan columnist