At the general election in Jeremy Corbyn’s Islington North, a candidate will stand from a party with a history of supporting IRA atrocities. But it won’t be the Labour party. It will have roots in a conspiracist Leninist sect that denied the existence of the concentration camps in to which “socialist” Serbs herded Bosnian Muslims. But much of the media will be too compromised by past endorsements to expose it as they exposed the Communist party of Britain and the other conspiratorial factions that guide Labour.

Its candidate told a critic: “This is such a retarded argument that you are now forever fixed in my mind as a drooling, fuckwitted sack of shit.” But he is not one of the charming Twitter “outriders” for the Labour leadership.

Conspiracy theories are the staples of traumatised countries in catastrophic decline

On the contrary, James Heartfield, from the Revolutionary Communist party and its successor organisations, will fight rather than support Corbyn in Islington, and stand for Nigel Farage’s Brexit party. He’s not alone in that. In the European elections, Farage put forward four candidates from what was in the 1980s the RCP, and then morphed into Living Marxism, the Institute of Ideas and Spiked. The names may have been different but the personnel and mentality endured. One, Claire Fox of the BBC’s Moral Maze, is now a Brexit party member of the European parliament.

Grim mockery is the easiest response. Farage cannot question Corbyn’s patriotism often enough. Last week, Leave.EU, his propaganda site, praised Ian Austin, one of the few MPs with the moral courage to walk away from Labour, for an “epic tirade” in which he accused Corbyn and John McDonnell of supporting terrorists and antisemites and honouring IRA murderers. The record shows that’s precisely what they have done.

But then Farage supports the old cadres of the Revolutionary Communist party, which hugged the most extreme elements in Irish republicanism with an embrace every bit as clammy. In response to the killing of two children in an IRA attack on Warrington, it declared: “We defend the right of the Irish people to take whatever measures are necessary in their struggle for freedom.” Colin Parry, whose son Tim was murdered in 1993, said, after confronting Fox during this year’s European campaign: “She repeatedly refused to disavow her comments supporting the IRA bombing... she hasn’t changed her original views.”

Claire Fox, one of the ‘old cadres of the Revolutionary Communist party’ and now a Brexit party MEP. Photograph: Peter Nicholls/Reuters

Meanwhile, if Corbyn has provided excuses for tyrannical regimes, his rival in Islington North from the Brexit party defended Colonel Gaddafi’s Libyan tyranny. It’s hardly news to say Farage is a hypocrite. Better to add that he is a symbol of the spread of conspiracism from the fringe to the mainstream. Understand its extent and you will grasp the depths of the British crisis. Conspiracy theories are the staples of traumatised countries in catastrophic decline. Weimar Germany in the 1920s and the Russia that Vladimir Putin took over failed as states because they allowed demagogues to explain away their woes with stab-in-the-back myths. Britain is starting to resemble them.

The conventional explanation for the success of the RCP is that it has cannily moved from the far left to where the money is. It understood that the media reward talking heads who will propagate any theory, however simplistic or false. “It still operates as a clique,” a former member told me as I was researching this piece. “But instead of attacking liberals from the far left it now attacks them from the libertarian right.” For denouncing political correctness, wokeness and other assorted horrors, it receives Koch brother money and commissions from editors desperate for “contrarian” thrills.

Fox and friends may be a gruesome addition to the Brexit party but they are not aberrations. Farage allies with Steve Bannon, Donald Trump and Matteo Salvini. Conspiracism is their substance as well as their style. If they lose an election, it is because the elite has rigged the system. If they win, and fail to deliver their impossible promises, they blame “deep state actors” or the “Remainer elite” of politicians and now judges for scheming to frustrate the people’s will.

You need not stop with Farage. You can read modern British history as a succession of conspiracy theories. David Cameron and George Osborne blamed the crash of 2008 on Labour profligacy and an over-generous welfare state rather than a failure of the financial system. Austerity is a dirty word now. But in the early 2010s, millions went along with Osborne when he successfully deflected attention from a crisis in capitalism by boasting of how he would go after scroungers who regarded welfare benefits as “a lifestyle choice”.

The supposed Corbyn revolution has merely turned Cameron and Osborne on their heads. Now it is the bankers who are the hated other, the scapegoats responsible for all our ills. So deep has conspiratorial thinking sunk that Corbyn can talk without a blush of a “no-deal bankers’ Brexit”, even though virtually every City institution has no time for no deal.

Brexit itself, however, is the ultimate post-crash conspiracy theory. Britain could be a buccaneering country again, as it was when it ruled a quarter of the world, if only it were not the victim of Brussels. As a mythical account of national failure, Brexit beats the demonising of the poor and the rich, because it exploits the hatred of foreigners, who, as history shows, are the best “other” money can buy. We would have democracy, prosperity and an end to the perpetual crisis if only foreign enemies in the EU and fifth-columnist Remainers at home would cease plotting.

We talk of magical thinking without making distinctions. Failing Britain is under the spell of a distinctly black magical thinking. Large sections of the population believe that, if they can crush the saboteurs, whether they be accursed bankers, scroungers, Remainers or Europeans, sunshine will drive the clouds away. A consequence of the triumph of stab-in-the-back myths is that British politicians look and sound the same. The content of the slogans varies but the tinny, screeching tone never varies. Nowhere will this be more true than in Islington North.

• Nick Cohen is an Observer columnist