After years of stagnation, Labour has plunged into chaos. But the dramatic events of recent months have their origins in the preceding decades, during which every part of the labour movement slowly hollowed out, leaving us stranded, with little reach into communities and workplaces. As the world has changed around us, we have stood still. It was in 1978, the year before I was born, that Eric Hobsbawm set out the demographic and social changes that would transform prospects for Britain and the left, in his lecture “The Forward March of Labour Halted?”, which traced the movement’s decline from its peak in 1945. Now, decades later, we work in call centres not coal mines, the retired and self-employed are a significant electoral force and three-quarters of the workforce is to be found in the private sector. What does the left have to say to them?

For those with purchasing power, new technology has brought economic choice and participation while politics remains stuck in the 20th century. We talk of social movements but we remain an analogue force in a digital era, more likely to be organising in factories than on Facebook. George Dangerfield’s The Strange Death of Liberal England (1935) and the fate of the Liberal Party should serve as a warning to us; Scotland and Brexit are symptoms of our decline. Political parties must renew, or consign themselves to irrelevance.

Labour’s unique strength has always been the depth and breadth of our grass roots. So no wonder that, running short of inspiration as our reach has contracted, we have looked backwards for answers. Renationalisation, Sure Start, NHS spending – all matter, but we fool ourselves if we believe that simply resuscitating old, proud solutions will breathe life into the Britain of the 2020s. The aim is to build the new century, not relive the last.

The tragedy of Labour’s predicament lies in the decades-long stand-off between New and Old Labour. Throughout the 21st century the generation of the 1990s has fought the cohort of the 1980s and, in doing so, lost sight of the future. As we rehearse tired divisions about the role of public- and private-sector providers and revive the battles of the 1930s about the reform or overthrow of capitalism, both states and markets have concentrated their grip on power, thus denying people agency and control in their lives.

Across Europe, centre-left parties are paralysed by the compromise between power and principle, too often outflanked on credibility to the right and on populist principle to the left. In Britain, fuelled by the widespread loss of faith in the power of governments to change things, as well as a pervasive narrative of elites v the people, this has become a battle about Labour’s purpose. Are we a parliamentary force or a social movement? Power or principle? Reform or revolution? Yet these are false choices that the left cannot afford to accept. They preclude any prospect of meaningful change.

Meanwhile, Britain is changing. As we seek, after the Brexit vote, to redefine ourselves and our relationship with the world, we move on an inevitable path from fossil fuels to clean energy, and with profound consequences, not just for climate change, but also for jobs, pensions and savings. We face the pressures of an ageing population and, after decades of neoliberalism, the growing needs of people for whom opportunity is a myth and anxiety is a daily, grinding reality. In the face of this rootless modern reality, is it any wonder there is a clamour for belonging and for a renewed sense of patriotism that the left so far has spectacularly failed to comprehend or embrace?

The future belongs to those who understand it, seize it and bend its arc to their values. New technology is changing the ways we live and work. Rather than setting our face against it, we must harness it so that instead of entrenching inequality and social problems, it helps us solve them. If we utilised the power of the state we could drive investment into areas of the economy – the Internet of Things and battery technology – that would save lives, promote clean energy and create, not cost, good-quality jobs. What we lack is a vision of the future that has relevance to both the working and the middle classes. Only a renewed commitment to universal entitlement can do this. Education, health and social care, housing, work, retirement, the environment, law and order, the defence of the realm – in all of these areas, as we confront the challenges of the future, Britain needs a government that guarantees us all a shared stake.

This is what it means to combine a commitment to human rights with liberal socialism. As Marx predicted, capital is now the dominant political force globally, unbridled by submissive state governments. The left must confront that dominance and liberal socialism provides an essential counterbalance, built on the restatement of equal worth and guaranteed by a human rights framework. Labour’s failure to embrace human rights – at worst viewing them as incompatible with socialism – is one of the great tragedies of our recent history. The clues to our future lie as much in Rights of Man as in Das Kapital.

Lasting change cannot be delivered from the top, but only by a radical redistribution of power. It needs an active, enabling government working alongside people, drawing inspiration from genuine social movements. From Podemos and the People’s Plan in Barcelona to the work of co-operative councils in Britain, it is possible to combine the best of the radical left’s determination to redistribute power with the centre left’s determination to win, to be both a social movement and a governing force.

To change the country we must first change ourselves, creating a political culture that is much more open, capable of hearing alternative points of view and welcoming of challenge. With the left fragmented in Britain, we can choose to ignore pluralism or embrace it. But to choose the path of pluralism demands a conscious decision to reject the closed, insular arrogance of the culture that underpins both Old and New Labour in favour of a more open politics.

Is there a credible prospect of success? There is reason to believe so. The clamour for change is found among supporters of Labour, Liberal Democrat, Green and nationalist parties. Labour may be divided but across that divide are the many – who believe in a radical, democratic and pluralist future and also trust the people to make a good society the only way we can, which is together. Although the current battles in Labour will eventually die, the cause of the left will not die with them.

Lisa Nandy is the Labour MP for Wigan

This article is part of a New Times collection of the future of the left. Read the other pieces here.