Our landscape is changing and this spring the pace is accelerating. It’s there in the mounting public recognition that the challenges society confronts are common to us all – from climate change to the growth of food banks – and so must require a common response marshalling common resources.

It feels as if we’re at an inflection point, whether in the degree of support for Extinction Rebellion, the cross-party concern to promote social mobility or the growing acceptance that gender should be non-binary.

The young, living and carrying through these changes, seem like adults, while the adults, holding on passionately to times past, scream like kids having their beloved but now redundant toys taken off them. Witness a private school headmaster, Stowe’s Anthony Wallersteiner, likening the criticism of British private schools, surely the most sophisticated system of social engineering in any western democracy, for obstructing social mobility to Hitler’s persecution of the Jews. A barometer of changing times is the strident absurdities of those in power having their power challenged.

The derided state is emerging as an essential partner in co-creating a value-creating capitalism

The nostrums that have held sway for more than a generation feel worn out. Last week, the economist Guy Standing launched a report commissioned by the shadow chancellor, John McDonnell, making the case for universal basic income (UBI). His cogent, concise setting out of today’s eight giant social evils captures the moment well. He lists inequality, insecurity, debt, stress, precarity, advancing robots, extinction and the rise of populism and neo-facism as defining our times – and forensically dissects the inadequacy of our social settlement, and the proposed universal credit, to head them off.

There needs to be a wholesale makeover. I remain unpersuaded that UBI is the answer; it will be cast as an unearned handout, far too modest if it is to be remotely affordable and will ultimately go the same dismal – but more expensive – way as child benefit. But to their credit, Standing and McDonnell are putting the shortcomings of Britain’s social deal centre stage and if a pilot can be made to work, then critics will have to revise their views. The very fact of the debate is part of the new zeitgeist.

Economics itself – and even the discourse in business schools – has begun to ask searching questions about how today’s capitalism, meant to be unleashed by rolling back the state, has gone so self-evidently rogue. The derided state is emerging as an essential partner in co-creating a value-creating capitalism.

We have lived too long with the myth that companies freely responding to the preferences of consumers in markets are the source of value. Wrong. Markets can allocate resources well, but they certainly alone don’t create value and indeed can easily destroy it. The great deformation of the past 40 years, what one group of American economists calls “the Great Mortgaging”, is the bewildering way banks, responding to consumer preferences but with ever-decreasing public regulation, have transmuted themselves into monster mortgage machines, across the west but in Britain particularly.

All the incentives in the financial system are to lend against property, whether to us as individuals or some private equity company with property as collateral. Thus the asset price and private equity boom; thus the bias in favour of breaking up companies to unlock their property assets; thus the starvation of credit flows to Britain’s clusters of potential high-growth companies.

A smarter capitalism needs new forms of ownership to complement the private limited company

On Thursday, the Progressive Economic Forum (full declaration: I’m a member), publisher of the Standing paper, mounted a morning of critiques of the current financial system along with a range of potential reforms, centred on a report, Financing Investment, prepared by GFC Economics, again for McDonnell. McDonnell turned up with some of his team, sitting through more than four hours of argument – a degree of personal commitment to ideas that I can’t remember any politician showing.

For me, it was a trip down memory lane to my book The State We’re In: the state has to find ways of incentivising and directing credit away from property and towards innovation, investment and the green economy. It has to build public banks that will do the job private banks will not and has to take the lead in driving forward ambitious public investment around which the private sector can cluster. It was a shame the authors got overambitious, wanting the Bank of England to do what no government anywhere in history has achieved – hit a demanding new productivity target – but the underlying analysis is surely right.

Beyond these reforms, a smarter capitalism needs owners who want to own companies rather than trade them and new forms of ownership to complement the private limited company. Here, one new left thinktank – Common Wealth – is stepping into the breach developing templates beyond nationalisation, while another – Autonomy – is devoted to workplace reform, site of so many economic and social ills. Their principal market is once again the ubiquitous John McDonnell, popping up anywhere radical ideas are being developed. Again, it’s a sign of changing times that a central bank governor, Mark Carney, or possible successors such as Andy Haldane or Raghuram Rajan, are also critics of contemporary capitalism and asserters of the common good.

The tragedy, though, is that this energy is independent of – and even opposed to – the great progressive social force of the moment: Remain. It is not just that all these reforms will work better if the economy is growing by staying in the EU; the Labour party, or any progressive government, needs a big, broad coalition to vote it into office and then act on the reforms and populate the new institutions.

Jeremy Corbyn may have done the left a great service in helping unleash the energy; the paradox is that his pro-Brexit politics stand in the way of any of it ever being implemented. For the other great part of today’s change is that Britain is becoming pro-European. Labour may be becoming the party of imaginative reform. To seal the deal it has to be the party of Remain.

• Will Hutton is an Observer columnist