"This is not a safe space. If you have come here and you're going to get offended, fuck off!" said Francis Foster, compere at Comedy Unleashed, a monthly event that describes itself as London’s only "free thinking" comedy night. We were in a bar in Bethnal Green. The audience: about 100 people, mostly men, including a handful of right-wing notables. I could see Paul Joseph Watson, the conspiracist YouTuber, sitting at the front; Dan Jukes, Nigel Farage's press officer, near him; Toby Young, the perpetually disgraced journalist, perched at the back; and James Delingpole, executive editor at Breitbart, behind me.

Comedy Unleashed was co-founded by Andrew Doyle, who co-writes the satirical broadcast character Jonathan Pie. Writing in Spiked, Doyle claims that he established the night to counter what he perceives as the fashion for "wokeness" in the comedy scene: left-leaning comics who are "inoffensive, inclusive and socially conscious". Stand-up, he contends, has lost its bite: "A truly alternative comedy scene would involve a degree of risk-taking."

"What do you do, Ian?" Foster asked a member of the audience.

"I'm a teacher."

“What do you teach?”

"Psychology."

"So… not a proper teacher then!"

Unsurprisingly, this "risk-taking" was all bluster; there was little that you wouldn't hear in any average comedy club on a Tuesday night. "It's now possible to give someone a full-face transplant. Incredible! Apparently it's not appropriate as an anniversary gift, though," went headliner Andrew Lawrence. All this in front a banner that declared, without irony: "No self-censorship… If it's funny, it's funny."

Still, there were some common features. The first was a tendency for the comics to think that what they were doing was more controversial than it was. After a joke about estates agents fuelling the rise of the BNP – which sounded at least ten years old – Foster declared that there was "tension" in the air, when it really just seemed like a section of the crowd didn't find it funny. After making a joke about abortions that was unevenly received, Andrew Lawrence said, "Now I'm getting a feel for the room!"

This tendency to conflate a range of reactions with being offended mirrors the online right, who claim people are "triggered" by their opinions, when really there might be simpler explanations, like disagreement.

Second was an appetite from parts of the audience for hostility towards the political left, women and minorities. Heydon Prowse, a self-declared liberal centrist – and one half of the BBC's The Revolution Will Be Televised – was on the bill ticking a political diversity box, fulfilling Doyle's claim that they host "comedians from the both the right and left of the spectrum". But it was his anti-Labour joke – "In Labour's multiple Brexit-verse theory, all possible permutations of Brexit co-exist at once, the only constant being that the Jews are to blame for everything" – that drew the biggest reaction: cheers, laughter and a round of applause. Some clapping also followed Lawrence's riff about his wife getting a job for the Royal Mail: "'What's she called: a postman, post lady, post person?' I just call her a bad mother!"

Then there was the ubiquitous notion that you can't say anything anymore. "People seem to get really upset now," said Jojo Sutherland toward the end of her set. "The laws are getting changed because of the demands of emotional people. And you need to be really fucking careful. Because without realising it, people are going to prison for pranks" – which produced several "Yeps" from the front and ten seconds of applause. It seemed that Sutherland, or the audience, was referring to the case of Count Dankula, the YouTuber – and unsuccessful UKIP MEP candidate – who was fined £800 for posting a video of his girlfriend's dog doing a Heil Hitler salute in response to him saying "gas the Jews", and who performed at Comedy Unleashed in February. The video of his performance is not on Comedy Unleashed’s YouTube channel, but it is on his own, where it has over 200,000 views.

Comedy Unleashed revolves around this question of "free speech". It is one of the most contested topics in the culture wars that the North American and European right-wing have been fighting since the 1990s, whose flash-points include the Salman Rushdie affair, the Charlie Hebdo killings, that Seth Rogen film and many minor events like newspaper columnists being uninvited to speak at universities and the philosopher Roger Scruton losing an unpaid government advisory role because of racist comments made in a New Statesman interview.

The background to this culture war is twofold. Having intellectuals convinced that they need to defend liberal values from Muslims and leftists has provided a useful ideological cover for the West’s several wars of aggression in and against Muslim-majority countries since the 1990s. These are wars that have geopolitical motivations but are sold as a clash of incommensurate, "civilisational" values. Secondly, the free-speech debate has intensified in the last ten years, as sociologist Will Davies observes, to compensate for the failure of economic strategy since the 2008 financial crisis. As life expectancy falls under austerity and wages stagnate for the many, "free speech does what the idea of free markets can no longer plausibly do" for the British right.

It's worth noting that there have been some illiberal developments with a chilling effect on expression, although they have nothing to do with campus politics. The government’s Prevent schemes have seen thousands of referrals of Muslim children for having thoughts deemed suspicious, in one case for merely discussing eco-terrorism in school. The Metropolitan Police’s criminalisation of drill music has made legal history: two black rappers, Skengdo and AM, recently received nine-month prison sentences for performing a song.

In terms of the actual distribution of speech, a country where Nigel Farage jointly holds the record for most appearances on Question Time (between 2008 and 2012, before he was a household name, he appeared more than all trade union leaders combined) and where an LSE study found that Jeremy Corbyn's views were systematically "represented unfairly" in the British press is not one where the right is silenced.

The Comedy Unleashed crew know this, which is why they say their target is not society but the "comedy establishment". Lawrence had a bit in which he complained that the BBC's main criterion for hosting comics is no longer being funny, but politically engaged from a liberal perspective. But this doesn't hold up either. Two major figures of that establishment, Jimmy Carr and Frankie Boyle, make jokes on television that are much more "politically incorrect" than what I witnessed. And much of the comedy establishment – whether it's David Baddiel and Ricky Gervais supporting Count Dankula against his conviction, Father Ted writer Graham Lineham's transphobia (which he denies) or Peep Show's Robert Webb quitting the Labour Party – find common cause with anti-leftist sentiment. Merging stand-up comedians with society at large allows Comedy Unleashed’s comics to shadowbox the right’s enemies while focusing on their particular industry; it lets them believe that what they're doing is subversive, rather than threatening no one in power at all.

There was one genuinely disturbing moment near the end of the night, when the audience was looser, relaxed. It happened during Andrew Lawrence's set. In a purely formal sense, Lawrence is an effective comedian: one could sense the audience getting swept up in his routine and persona, both self-deprecating and cruel. When he asked, "Any racists in? Give me a cheer!" he was perhaps expecting it to be met by awkward laughter, which would enable him to establish the premise of a new joke. What instead happened was an ambivalent murmur followed by a woman at the back shouting, "Yes!"

"Fucking hell!" he said with a grin of disbelief.

Two people in front of me turned around in shock to try to see who had said it (they soon left). But no one else seemed to mind. Lawrence carried on with his joke, which began with him saying he had lots of friends who were ethnic minorities and that they were all "cunts", after which the woman whooped; and he then moved onto calling white people, ginger-haired people and disabled people "cunts" too. The joke itself, from Lawrence’s perspective, presumably "works" because what the audience expects to be a particular racist attitude turns out to be a universal misanthropy. But that moment captured what really goes when Comedy Unleashed is running at its intended frequency: comedians play with opinions that are beyond the pale so that attendees can take them at face value. "Free speech" is the name they give to this sinister interplay of irony and sincerity.

Although nothing more than mild laughter characterised a lot of the audience's engagement throughout the night, there was one section near the front that was fully on-board: the entourage around Paul Joseph Watson. During the second intermission, I spoke to a besuited young man at the bar. He told me that he worked for a "high profile YouTuber" and attends Comedy Unleashed every month. When I asked him how he would describe the regular attendees, he chose his words carefully: "We are a group of countercultural people who by the warped standards of this country would be considered on the right." I had seen earlier him share a knowing glance with his neighbour when Heydon Prowse referred to the brave volunteers who fought the fascists during the Spanish Civil War in the set-up to a joke about millennial activism. But that's what Britain is like these days: you can't even support General Franco without being labelled right-wing.

Far-right YouTubers, The Spectator (where Toby Young writes) and Breitbart are not really interested in civil liberties or stand-up comedy, but in executing their politics. And it's happening in the real world. The Christchurch gunman famously told viewers to "Subscribe to PewDiePie", a YouTuber whom Watson has dedicated a video to defending, before opening fire. The Spectator publishes op-eds in support of Greek neo-Nazis and jokes that there isn’t enough Islamophobia in Britain, while mosques are vandalised, bomb plots hatched. The shared premise of their worldview is that conservative white men and "European values" are endangered. It’s a delusion that stands in contradiction to the fact that the world as it is materially constituted – with a political-economic system that drains value from the Global South and forces thousands of black and brown migrants to drown in the Mediterranean – is made in their image.