Let's start with the positive. Both Kezia Dugdale and Ken Macintosh, rivals in the Scottish Labour leadership election which ends tomorrow, are capable, humane politicians who have conducted an honourable if uninspiring campaign.

They haven't lapsed into tabloid populism on immigration and welfare or wittered on about “aspiration”. They've both promised to democratise their party. They haven't wasted their energy on pointless sectarian attacks on the SNP.

Unfortunately, not doing the wrong things isn't quite the same as doing the right things. This was arguably the most important leadership contest ever held by the Labour Party in Scotland. It follows the party's greatest ever defeat and humiliation in the General Election when it lost all but one of its 41 MPs.

The SNP's popularity is even higher now, at 62 per cent, than after the May “tsunami”, even though the Nationalists have been treading water recently as their lacklustre and self-satisfied conference agenda shows. Labour stand to lose all their constituency seats in the Scottish parliamentary elections next May.

If this isn't a moment for a radical break with the past, I don't know what is. When political extinction is staring you in the face, it's no time for business as usual. Yet Labour have conducted their usual unimaginative, safety-first campaign with the front runner, Ms Dugdale, saying as little as possible and Mr Macintosh even less.

What radical ideas have we heard from Ms Dugdale? A House of Lords in Glasgow; good luck with that. A new pay deal for teachers, letting EU nationals vote in the referendum on Europe? Curiously tangential to the central issues in Scottish politics.

She said she opposed the Tory welfare Bill cutting tax credit, but would still have abstained in the Commons vote last month. Mr Macintosh rightly condemned her equivocation on the key issue of the campaign.

Now her expected victory on Saturday has been eclipsed by the arrival of the Corbyn bandwagon to Scotland. Thousands are being turned away from sell-out events in Edinburgh, Glasgow and other Scottish cities. That a relatively obscure 66-year-old MP from a London constituency can ignite such enthusiasm in Scotland is a measure of Labour's failure.

Yesterday, the UK Labour Party's computers crashed while trying to cope with the influx of newcomers wanting to take part in the leadership election. One quarter of million new supporters and members had signed up in a matter of weeks. There is a grassroots renewal movement sweeping through the sclerotic arteries of the old bureaucratic Labour Party.

How on earth could 33-year-old Kezia Dugdale, who is supposed to be so radical and internet savvy, fail to get a piece of that action? Why aren't crowds lining the street at her meetings?

For years, the Labour establishment have consoled themselves with the cop-out that people aren't interested in politics any more; that the age of the mass meeting and mass membership is over. The conventional wisdom is that you gain power by stealth following the focus groups and sticking to the centre ground.

That this kind of politics is inappropriate in Scotland has been obvious for years. But it's taken Jeremy Corbyn to finally demonstrate just what Labour has been missing in Scotland. Huge numbers of people want to join an inspirational party of the social democratic left. And get this: Corbyn is a Unionist.

It was the independence referendum campaign, with its unprecedented levels of voter engagement, that made politics come alive in Scotland and some of that spirit has clearly migrated south. The are many similarities between Corbynmania and the success of Nicola Sturgeon, and not just because they can both fill stadiums. The SNP's manifesto in the General Election offered essentially the same social democratic vision Mr Corbyn has been offering now.

Ms Sturgeon didn’t wave a claymore and cry “freedom" in May – she avoided identity politics almost entirely. The SNP landslide, as their youngest MP, Mhairi Black, pointed out in her maiden speech, had “nothing to do with nationalism”. It was all about social justice, opposing austerity, defending the welfare state and redistribution of wealth. That speech has been viewed more than 10 million times but Labour still hasn't got the message.

Former Labour MPs and commentators in Scotland are hopelessly confused about this. They keep saying, “the SNP isn’t really a left wing party, we are”, at the same time as saying that left-wing policies are unelectable. The truth is that policies like nationalisation, wealth taxes and free education are rather popular. And Labour in Scotland knows this because it stood for them only last May.

I've been amusing friends in the UK media by pointing out that the ultra-Blarite spin doctor, John McTernan, who recently suggested that Mr Corbyn should be deposed in a coup, campaigned for 50p tax, rail re-nationalisation, free university tuition, gender equality and a raft of other Corbynisms. He was chief of staff to the-then Scottish leader, Jim Murphy, and these were New Jim's policies, though Labour seems to have written this from history.

Mr McTernan went along with these policies, not because he believed in them, but because he realised they were popular. Unfortunately, people didn't believe Mr Murphy was serious. But Ms Dugdale, who has none of Mr Murphy's Blairite baggage, could surely have seized this opportunity and run with it.

Instead, she disowned Mr Corbyn's anti-austerity politics because she said she “didn't want Labour to be left carping on the sidelines”. Well, here's the news: Labour in Scotland has been doing nothing but carp on the sidelines for the last decade. Belatedly she is now saying she isn't “wildly different” from a carping Mr Corbyn but it's three months too late.

She could have upstaged Mr Corbyn and taken the fight straight to the SNP. She is a gifted politician with an ability to speak to the young people and female voters who seem enamoured of Mr Corbyn. She could have attracted thousands of new voters and supporters to the Labour cause in Scotland.

She should have declared Labour an independent party and defied the UK leadership to contradict her. What’s left to lose? She should have offered a great debate on Trident. Well, why not? In her BBC Scotland 2015 debate she said that she wanted “any and every policy debated at conference”. Did she mean: any and every policy except the ones that people want to talk about?

Why didn't she seize this moment? There must be a reason, and I'm afraid it is obvious: Labour still lack the courage of their convictions in Scotland. They can't even bring themselves to sell their own policy agenda with any enthusiasm.

To succeed in Scotland, all political parties have to show they are their own boss, that they decide their own fate. Labour still has the mentality of a branch office and voters in Scotland want the full HQ.

We can see from Mr Corbyn's packed meetings that people are interested in Labour policies. But a party that cannot speak up for itself is a party that will never win votes. And a party that rejects new blood is a party on its way to the graveyard.