Nationalism is on the march again. Protectionism is back in vogue. Both were underlying factors in Britain’s decision to leave the European Union. They helped to carry Donald Trump into the White House and marched brazenly through the streets of Charlottesville under the Nazi banner. They underpin the ‘strong man’ authoritarian governments in Putin’s Russia, Erdogan’s Turkey, Xi’s China and even Abe’s Japan.

The long tail of the global financial crisis, the economics of austerity, deindustrialisation and the hollowing out of towns and communities, have combined with concern about high levels of migration to form a perfect storm that has battered centre right parties and shipwrecked the centre left.

The success of European popular nationalism

Emmanuel Macron may have entered the Elyseé Palace following a decisive win over Marine Le Pen, but his victory was the precursor to a wave of success for far right parties across the continent. In September 2017, Angela Merkel had to face the grim reality of the first major far right presence in the German Bundestag since the Second World War; the Alternative for Germany (AfD) won 94 seats with the support of one in eight voters. The following month, Andrej Babis led his anti-immigrant ANO Party to victory in the Czech Republic and the far-right Freedom Party entered the Austrian Government as part of a governing coalition after winning one in four votes. In March 2018, the anti-establishment Five Star Movement became Italy’s largest party, while The League, a vehemently anti-immigrant party leapt from four per cent to 18 per cent of the popular vote, replacing Silvio Berlusconi’s Forza Italia as the dominant party on the right of Italian politics. From Golden Dawn in Greece on seven per cent to the Swiss People’s Party on 29 per cent, the most recent national election results across Europe show alarming levels of support for right wing populist parties from Scandanavia to Southern Europe.

Right wing populists have not enjoyed the same electoral success at the ballot box in the UK, but something more sinister lurks beneath the surface of the body politic. Hope Not Hate warns that Britain is facing a ‘growing and changing far right threat’. Although the British National Party has collapsed and organisational membership of far right groups is at its lowest point in twenty-five years, their online presence is increasing and far right terrorism and violent extremism is on the rise.

The right wing populist moment in British politics was successful in the EU referendum. For eurosceptics on the left, the European Union is an antidemocratic project that sees too much power exercised by unaccountable elites and a capitalist project that undermines the ability of nation states to take decisions that benefit the people. For eurosceptics on the right, it is not simply that they believe that decisions would be better exercised at a national level; they reject a rules-based global economy. Theirs is a libertarian vision of deregulation, unfettered free markets and the UK as an offshore tax haven. For Donald Trump, Brexit suits his protectionist agenda as he rips up free trade agreements and paralyses the World Trade Organisation. Anti-capitalists and ‘Wild West’ capitalists arrive at the same conclusion with very different motivations.

Social democracy missing in action

The rise of populism and European popular nationalism is a symptom of a deeper crisis at the heart of neo-liberalism caused by its failure to deliver for economy and society. Liberal democracy is under threat as enlightenment values like reason, science and religious tolerance are crushed by the rampaging forces of a post-truth movement.

Amidst the maelstrom, social democracy has been missing in action. Centre left governments paid a heavy price for being at the wheel when the car crashed in 2007–8 during the global financial crisis, but if it were simply a case of ‘wrong place, wrong time’, social democrats could have recovered by now. Third way politics, so electorally successful for a while that people talked excitedly about a ‘progressive century’, was too indifferent to the worst excesses of globalisation and the reckless, destructive greed of financial capital. The tax receipts were coming in, the economy was booming and centre left governments, like New Labour under Tony Blair, were happily ploughing record investment into public services to reverse years of decay and decline. In the aftermath of the crash, the centre left tradition that prided itself on being able to modernise struggled to modernise, presenting itself as a technocratic, managerial project based on offering incremental change when the moment demanded something economically transformational.

The Brexit fallacy and the progressives’ Brexit dilemma

We see the same lack of ambition playing out in the Labour Party’s response to Brexit. Labour’s old centre left establishment, now reeling from defeat inside the party, are behaving as if the future is a binary choice between the voters of Streatham and the voters of Stoke-on-Trent: between liberal metropolitan voters in our big cities and our traditional working class base in the old industrial heartlands. Labour’s new establishment under Jeremy Corbyn is struggling to hold this fragile electoral coalition together – the Corbyn project itself a coalition that embraces old-school eurosceptic leftists and idealistic young pro-Europeans.

The Brexit that people voted for cannot be delivered. A hard Brexit would address voters’ concerns about sovereignty and migration, but with significant economic harm. A soft Brexit would reduce the economic risk, but at the expense of democracy and sovereignty because the UK would be subjected to rules over which it has no formal say. Both scenarios – economic crisis and democratic deficit – represent a manifesto of misery and despair for increasingly weary voters who already believe that their political leaders don’t keep their promises and lack real answers to address their hopes and fears. Both risk a populist backlash and create fertile breeding ground for Britain’s nascent far right. This is the heart of the progressives’ Brexit dilemma.

Contesting the nature of modern nationhood

Writing for the Guardian in 2011, Dagenham and Rainham MP Jon Cruddas and leading Blue Labour thinker Jonathan Rutherford urged the Labour Party to ‘seize the politics of identity and belonging from the right’, arguing that ‘Labour has prospered when it has contested the nature of modern nationhood’ and ‘must do so again because a sense of foreboding is taking hold in our country and the right seeks to alter its essential character’. Their warning was prescient.

What we haven’t yet figured out is how we can marry ‘patriotism and place’ with globalisation. Protecting what matters to people – family, friendship, community, work, national identity and a sense of belonging – requires a more substantial political patriotism than simply faith, family and flag. Without an open and outward looking nation state, engaged with the world and acting with others, the flag will be battered by global headwinds, the family will be unemployed and their prayers will go unanswered.

The challenges confronting Britain and the world today require a complete re-imagination of global governance built around the local state, the national state and the global state.

We have a global economic system that is decentralised and increasingly digitised – paying less regard to borders and places. It is defining where people work, where they live and how much they’re paid. We’ve already seen what happens when nation states fail to govern effectively: the wholesale loss of jobs, boarded-up town centres and ordinary people paying the price for the worst excesses of the ‘masters of the universe’ in global financial services. The next phase of globalisation will continue apace, with the centre of economic gravity shifting to the East and the rise of new tech oligarchs, who already believe themselves to be more powerful, more relevant and more righteous than national governments.

Big questions arise about how we ensure that citizens’ rights, protections and voices are protected and promoted not diminished. This isn’t a conversation to surrender to libertarians and authoritarians. In 1945, the Labour Government played a leading role in creating international institutions to prevent another world war. Today we need to lead the world again in a conversation about how we create new global institutions and frameworks to create inclusive growth, curtail the excesses of global capital and rebuild international relations around a rules-based system fit for the modern world.

Labour is currently in the foothills of the debate about how we bring about our national renewal. There is wide-spread consensus across the party about the need for investment in our public services and national infrastructure. Labour’s ‘Build it in Britain’ campaign is speaking to a well understood common sense that measuring value in procurement isn’t simply about the lowest price, but wider value in terms of jobs, communities and sovereign capability. The public believe we’re better placed than the Tories to protect the NHS, tackle the housing crisis and educate our children. But they are yet to be convinced that we can be trusted to defend Queen and country, provide law and order and spend their money wisely. There is a proud and patriotic tradition on the centre left of supporting our armed forces; being tough on crime as well as its causes; that expects people to pay their fair share of taxes as the price for a civilised society and that spends money wisely. The British people want our country to be open to global talent and open hearted to refugees, but they want to know that everyone is abiding by a set of rules that are firm and fair.

Finally, we need to deliver the greatest redistribution of power and resources from central to local government in British history. On housing, education and skills, health and social care, transport and economic development, local government is better placed to make decisions in the interests of local communities. It offers app-addicted citizens with expectations of personalised services a greater possibility to be involved in the design and delivery of their public services, replacing the marketisation dogma of competition over collaboration and citizens as customers with a new public service ethos of co-operation with citizens as co-producers.

The twentieth century is fighting the twenty-first. Every great Labour government has been elected with a compelling national story about the condition of Britain and how they intended to change it to meet the challenges of the day in the interests of the common good. The economic crisis caused by a hard Brexit or the democratic deficit of a soft Brexit both risk fuelling Britain’s populist right. The challenge facing the centre left today is whether we can bring our country back together around a politics that is patriotic, democratic and open to the world.