It is inversion time in America as the people formerly known as the happy middle class rally by the millions for a Republican billionaire who is in love with the idea of national decline.

Donald J Trump is possibly the least qualified presidential candidate ever to be chosen by one of our big parties. He is a reality TV star who has never held a political office and has only a vague understanding of how the US government works – a real-estate tycoon who travels on a private jet and lives in a penthouse apartment that is decorated, say reports, in the style of Louis XIV. And yet he has somehow made himself into the voice of the downwardly mobile millions.

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A big reason for Trump’s amazing success is his shameful and barely concealed appeal to racist sentiment. He has blamed a nonexistent crime wave on Mexican immigrants and pledged to get tough with, yes, refugees from Syria. His ideas of the conditions in which black Americans live seem to come straight out of the 1970s. For some, his repugnant attitudes towards women also seem to be a big selling point in the year of the first female presidential candidate.

But what makes Trump the ace is that he has successfully captured the anger of average people who see themselves on the receiving end of a “rigged” system, to use the cliche of the year. He has turned the tables of class grievance on the Democratic party, the traditional organisation of the American left. How did this happen?

Let us start with the Democrats. Were you to draw a Venn diagram of the three groups whose interaction defines the modern-day Democratic party – liberals, meritocrats and plutocrats – the space where they intersect would be an island seven miles off the coast of Massachusetts called Martha’s Vineyard.

Facebook Twitter Pinterest Flying the flag in Martha’s Vineyard – a place of yachts, celebrities and closed-off beaches. Photograph: Getty Images

A little bit smaller in area than Staten Island but many times greater in magnitude of wealth, Martha’s Vineyard is a resort whose population swells each summer as the wealthy return to their vacation villas. It is a place of yachts and celebrities and fussy shrubbery; of waterfront mansions and Ivy League professors and closed-off beaches. The markers of lifestyle enlightenment are all around you: foods that are organic. Clothing that is tasteful. A conspicuous absence of cigarette butts. Sometimes, the perversity of the place is capable of slapping you right in the face. I was reminded of this as I strolled through one of the polished, stately towns on Martha’s Vineyard and came across a shop selling reproductions of old T-shirts, sports memorabilia and the like. On the outside wall of the shop hung a poem by Charles Bukowski, because, of course, nothing goes better with tasteful clothing than transgressive poetry. It’s about the horror of blue-collar life, about “men I’ve known” who work in factories and who do the kind of dehumanising labour that no one who passes by here ever does any more.

When I think of the men I’ve known who work in factories, I often think of a group of locked-out workers I met in Decatur, Illinois, in 1994, during the early days of the Bill Clinton administration. Their quintessentially average town was embroiled in three industrial actions: in addition to a lockout at Tate & Lyle’s Staley plant, there were strikes at Caterpillar and at Firestone. The contests grew bitter; the police grew violent; the workers made common cause with one another; people started referring to Decatur as the “war zone”.

What they meant by this phrase was not merely that cops could be mean, but that capitalism had declared war on blue-collar prosperity itself. As a locked-out worker told me in 1994, after reflecting on industrial struggles of the past: “Now it’s our turn. And if we don’t do it, then the middle class as we know it in this country will die. There will be two classes and it will be the very very poor and the very very rich.”

Facebook Twitter Pinterest Striking UAW members picket the Caterpillar factory in Decatur, Illinois in November 1991. Photograph: Seth Perlman/AP

Was he ever right about that. In a scholarly paper about social class published in 1946, the sociologist C Wright Mills found that “big business and executives” in Decatur earned a little more than two times as much as the town’s “wage workers”. In 2014, by contrast, the CEO of Archer Daniels Midland, a company that dominates Decatur today, earned an estimated 261 times as much as average-wage workers. The CEO of Caterpillar, the focus of one of the “war-zone” strikes, made 486 times as much. Caterpillar’s share price, meanwhile, is roughly 10 times what it was at the time of the strike.

Other changes to sweep that town since the war-zone days of the 90s are just as familiar, just as awful. For one thing, Decatur’s population has shrunk by about 12% since then. Despite this outflow of people, in early 2015, the place still had the highest unemployment rate in Illinois.

In 2015, I went back to Decatur to catch up with veterans of the war zone such as Larry Solomon, who had been the leader of the local United Automobile Workers union at the Caterpillar plant. He went back in after the strike ended but retired in 1998. When I met Solomon in his tidy suburban home, he talked in detail about the many times he got crossways with management in days long past, about all the grievances he filed for his co-workers over the years and all the puffed-up company officials he recalls facing down.

Think about that for a moment: a blue-collar worker who has retired fairly comfortably, despite having spent years confronting his employer on picket lines and in grievance hearings. How is such a thing possible? I know we’re all supposed to show nothing but love for the job creators nowadays, but listening to Solomon, it occurred to me that maybe his attitude worked better. Maybe it was that attitude, repeated in workplace after workplace across the country, which made possible the middle-class prosperity that once marked America as a nation.

“We were promised, all during the time we worked at Caterpillar, that when you retire, you’re going to have a pension and full benefits at no cost to you,” Solomon recalled. He told about a round of contract negotiations he and his colleagues attended in the 1960s during which a management official complained: “We already take care of you from the cradle to the grave. What more could you want?”

Today, that old social contract is gone or, at least, the part of it that ensured healthcare and retirement for blue-collar workers. Now, as Solomon sees it, companies can say: “We want your life, and when your work life is over, then goodbye. We thank you for your life, but we’re not responsible for you after we turn you out.”

Mike Griffin had been another outspoken union activist, in his case during the lockout at Tate & Lyle. When we met up last year, we talked about the situation that faces the younger generation in Decatur, people for whom the basic components of middle-class life are growing further and further out of reach. Though they might not always get it politically, Griffin said, those workers can most definitely see how screwed they are. “One of the things that they do understand is that they got shit jobs with shit wages and no benefits and no health insurance,” he told me.

Facebook Twitter Pinterest Supporters of a $15 minimum wage for fast food workers rally in front of a McDonald’s in Albany, New York State. Photograph: Mike Groll/AP

“And they understand,” he continued, “that they’re working two and three jobs just to get by, a lot of them can’t own anything and they understand seeing Mom and Dad forced into retirement or forced out of their job, now they’re working at Hardee’s or McDonald’s to make ends meet so they can retire in poverty. People understand that. They see that.”

Those awful words are a fairly accurate account of the situation faced by a vast part of the population in America, a population that was brought up expecting to enjoy life in what it is often told is the richest country in the world. It is not really the fault of Barack Obama or Bill Clinton that things have unfolded in such a lousy way for these people. As everyone knows, it is the Republicans that ushered the world into the neoliberal age; that cut the taxes of the rich with a kind of religious conviction; that did so much to unleash Wall Street and deregulate everything else; that declared eternal war on the welfare state.

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But history works in strange ways. Another thing the Republicans did, beginning in the late 60s, was to present themselves as the party of ordinary, unaffected people, of what Richard Nixon (and now Donald Trump) called the “silent majority”. They cast the war between right and left as a kind of inverted class struggle, in which humble, hard-working, God-fearing citizens would choose to align themselves with the party of Herbert Hoover.

And so Republicans smashed unions and cut the taxes of the rich even as they praised blue-collar citizens for their patriotism and their “family values”. Working-class “Reagan Democrats” left their party to back a man who performed enormous favours for the wealthy and who did more than anyone to usher the world into its modern course of accelerating inequality.

Everything in those decades seemed to be a class issue, everything, that is, except matters of economics and distribution, where free-market orthodoxy prevailed. In 2004, I went back to my home state of Kansas to ask why it had moved so far to the right since the days of Dwight Eisenhower; the answer, I discovered, was the culture wars – abortion, gun control, obscenity, education and so on.

And beneath every one of these culture war issues lay the burning insult of snobbery. A “liberal elite”, it seemed, was forever conspiring against the values of ordinary people, telling them what to do and how to do it without any concern for what they actually believed. The best thing about the culture wars was that they required the Republicans to deliver very little to their growing blue-collar base; the wars were unwinnable almost by definition, a matter of entertainment rather than politics in the traditional sense. The ones who got tangible gains out of this form of populism were the party’s clients among the business elite.

In the decades I am describing, Republicans also perfected the ugly art of the concealed racist appeal, which helped them to win many of the southern states and plenty of white votes in other places and whose echoes we hear so distinctly in the Trump campaign. Between that nasty strategy and the working-class outreach I am describing, Republicans enjoyed years of electoral success. At the top of the party structure stood the interests it served – big business, the very rich – and at the bottom was its mass constituency, which seemed to grow more proletarian and more frustrated as the years passed.

This mixture of cultural populism and free-market orthodoxy was not a stable one. Doing favours for the rich while encouraging fruitless, culture-based class grievances among working people was a contradiction difficult to sustain, a delicate balancing act that could only be pulled off as long as the economy stayed reasonably good and the price tag of inequality remained bearable.

The financial crisis of 2008 and the lingering recession shattered the whole thing. By 2016, as blue-collar wages continued to stagnate and inequality to worsen, the base of the Republican party had lost its appetite for pointless culture crusades: they demanded something real. And of the 17 Republican candidates for president this year, Donald Trump offered exactly that.

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He railed against a rotten political establishment that did nothing for working people; he promised to defend social security and to renegotiate the trade deals that are widely blamed for the deindustrialisation of the midwest. He also scapegoated Muslims and illegal immigrants, blaming them falsely for all manner of offences. And he did it all in the bluntest terms, with a self-absorbed way of speaking that somehow captured the imagination of this unhappy era. Even his grotesque, bombastic style seemed to confirm his appeal; at the Republican convention in July, I heard him described as a “blue-collar billionaire”.

From one perspective, Trump’s rise has merely marked the evolution of Republican populism. It has always been a form of entertainment, and Trump is a captivating entertainer. Traditional Republican leaders, however, regard Trump as a pariah, thanks to his market-offending stands on trade, social security and bank regulation. These leaders have abandoned him in droves, while he has promised to remake the Republicans into a “workers’ party.”

But what has also made Trumpism possible is the simultaneous evolution of the Democrats, the traditional workers’ party, over the period I have been describing. They went from being the party of Decatur to the party of Martha’s Vineyard and they did so at roughly the same time that the Republicans were sharpening their deadly image of the “liberal elite”.

Facebook Twitter Pinterest Bernie Sanders and Hillary Clinton at a TV debate: the Democratic party has ‘mounted notable efforts to cajole or shame’ young former Sanders supporters to vote for Clinton. Photograph: John Locher/AP

And so the reversal is complete and the worst choice ever is upon us. We are invited to select between a populist demagogue and a liberal royalist, a woman whose every step on the campaign trail has been planned and debated and smoothed and arranged by powerful manipulators. The Wall Street money is with the Democrats this time, and so is Silicon Valley, and so is the media, and so is Washington, and so, it sometimes seems, is righteousness itself. Hillary Clinton appears before us all in white, the beneficiary of a saintly kind of subterfuge.

If there is any hope left in the American system, it lies with a generation of young voters who are gigantically frustrated with the choices offered by two-party politics. Earlier this year, many thousands of them enlisted in the unlikely crusade of Senator Bernie Sanders of Vermont, a self-described “democratic socialist”, and now they are, it seems, so disaffected with the woman who defeated him that the Democratic party has mounted notable efforts to cajole them back into the fold.

Like the blue-collar people of Decatur, these young people know all about our predatory modern capitalism, know that they are fated to toil at some gig job in their crumbling deindustrialised city, slowly paying off the 30 or 40 grand they borrowed to study science technology, engineering and maths at the state U. And they are to be forgiven if they can’t see the promise in the Clinton restoration, or some modern-day Louis XIV, or even in the American way of life.

Excerpted in part from Listen Liberal, published by Scribe (£9.99).