Why be spooked by social democrat squawking? The coalition should shrug its shoulders and confess: the charge its enemies lay at its door is broadly correct. This is an ideological government with a plan for a smaller, less centralised and more liberal state. The left dreads the obvious fact that spending cuts are central to this plan – and they are. The left senses that the government is staging a cultural revolution against social democracy – and it is. The coalition does not want to make mild adjustments to the old order. It intends to smash it.

There is an element of mad Maoism to it all: the re-creation of a country fired by a spending review that will feel like a fetishistic exercise in the application of extreme pain. To say that cuts are being forced by necessity and nothing more, is to imply that when fatter times return ministers will reverse them. Nobody who knows the leaderships of this coalition believes that. Much of what the government must do to balance the books it would have wanted to do even if they were in balance.

Yet ministers, by and large, hesitate before admitting this. Liberal Democrats worry about scaring their voters. Conservatives aren't sure the country will understand their big idea. It's easier to take refuge in the alternative truth that cuts are happening because they are needed. Even Ed Miliband issued a press release last week agreeing.

From this follows the lazy line that all this government is doing is responding robotically to its circumstances. But blaming the last government for the horror already sounds weak.

Every day now brings a state-funded special interest group pleading for indulgence. David Hockney and Damien Hirst want money for the arts – multimillionaires for welfare, just like the bankers. The Foreign Office is holding the BBC Burma service hostage. Boris Johnson demands cash for the tube. This stuff is relentless and in some cases compelling, and the weight of it will grind the government down if it fails to explain why individual hard luck stories aren't the whole picture. If it fights each battle case by case it can't win. The coalition's long-term health depends on getting across the impression that it has a positive plan for a different kind of state, one whose effectiveness will not be measured solely by the amount of money it spends.

New Labour spinners used to call this sort of thing a narrative, but Blair-Brown talk of public service reform largely turned out to be fiction. The coalition's comforting story has the merit of truth. There is a narrative, at least among that minority of ministers intellectually committed to the coalition: a reimagining of the balance between the state and society in favour of the latter.

You can either pretend, as Labour does, that the government should go on as before, and hope no one notices the illogicality of promising to spend far less on much more; or you can recognise that the crisis of over-spending is really a crisis of over-government and do something about it: progressive austerity, as George Osborne once defined it.

This is no Hayekian nightmare. Indeed, the further the government can get from measuring everything in terms of pure economics the better. That isn't only because the numbers are going to be grim. It is because the government is liberal, not Thatcherite, in its thinking.

The point of reducing spending is to change the state, not just spend less. Success can't be measured in terms of the ratio of government expenditure to GDP, as someone on the Tory right – say, John Redwood – would like.

This point was there in Nick Clegg's description on the Today programme of state dependency in the north-east as not only unaffordable but unhealthy. It is there in a book published this week by the Tory MP and Cameron ally Nick Boles. He describes "genuine horror at the overweening power of central government and its treatment of citizens either as supplicants ... or lab rats in some vast social experiment, designed to improve mankind".

Which Way's Up?, Boles asks in the title of his book: the point is the gravitational pull of politics has changed. He argues for the decentralisation of money, power and policy far beyond anything the government currently has plans for, and it isn't fair to say he is only calling for this because of cuts. Cameron's friends were decentralisers long before the deficit became an issue.

Dismiss this as politics for wonks if you like. A patient, waiting on an operating table for a surgeon to begin amputation, is not comforted by being told the doctor is going back to first principles in some theoretical and untried plan. But what is the alternative? A government slashing at the state with no expectation of improving it? Offering a view of reform is not the same as guaranteeing success – but it is more effective than offering no opinion at all.

There's a kamikaze spirit in this government's soul. Ministers seem strangely pacified by the prospect of their possible political doom. New Labour feared unpopularity so much it became timid. This government has written unpopularity into the script. This has freed it to do things it would never have risked in fiscal peacetime. It is why change seems reckless and fast. The coalition feels a revolutionary duty to be brave. It should be proud of that.