In Ernest Hemingway’s novel The Sun Also Rises, a central character is asked: “How did you go bankrupt?” His answer: “Two ways. Gradually, then suddenly.” I believe our democracy may be going bankrupt in much the same way. We have to urgently act to save it – because while the alternative is terrifying, it is coming into view.

The steps along this gradual route to democratic bankruptcy have included the folly of the Iraq war, the 2008 crash, the steady polarisation of society and now the threat of catastrophic climate change, which has prompted children around the world to do the job many politicians won’t do.

It was the 2016 Brexit referendum when this deep crisis erupted to the surface. And yet our response has been to either see the outcome of that binary vote as not having been honoured, or being a fix, rather than thinking through the implications of having denied 4 million Ukip voters parliamentary representation in 2015 – and the effect it had the following year.

The response to the crisis is not to burn the old system down, but renew it, modernise it and deepen it

Power is now too remote, and elections can be swayed through fake news or social media spending. All the incentives for the political class are to think short and act narrow. And now we are about to go into an election in which a two-party system plays havoc with the relationship between votes and seat allocation within an increasingly multiparty settlement.

The true danger of this crisis is the rise of toxic populism. This is a dumbed-down politics that rests on two short planks: whom to follow and whom to hate. It claims to be “real democracy”, but in actual fact is the democracy of what the academic Francesca Klug calls the rubber stamp, in which a contrived “will of the people” sees narrow majorities trample over the human rights that define civilised societies.

It is into this minefield that every concerned citizen must now tread, ever mindful not to entrench the anti-politics of the populists by talking down the concept of democracy. As we mark Guy Fawkes Night, the response to the crisis is not to burn the old system down, but renew it, modernise it and deepen it.

We all have our own visions of democratic reform. But two fundamental aspects of any meaningful renewal agenda must be adhered to. The first is that parliament cannot heal itself. It will need outside help.

The second is that because our democracy is such a complex organism of people, parliaments, constitution, cultures and structures, it can’t be fixed with a single silver bullet or even a series of them. It must be looked at holistically.

That’s why it’s not just democracy campaigners, but campaigners for equality, sustainability and much else besides who are making a powerful case for a citizen’s convention to remake our democracy. They know that to change society we have to change the system. Up to Us is the demand from 80 civil society groups for a new pact between the citizen and the state. These civil liberties, equality and environmental campaigners, and business people know they can’t get what they want until we transform the democratic system. We have the tools to do it.

Citizens’ conventions or assemblies are a well-rehearsed means to solve seemingly intractable problems. They bring together a random but representative sample of citizens who are given the tools and the time to construct solutions that speak to complex long-term national interests. However Brexit is resolved, a citizens’ convention would bring all sides of the country together, allowing the hurt and the hope to be shared, understood and healed. This is the role they played in Ireland on the divisive issue of abortion.

The Citizens’ Convention on UK Democracy based at Kings College London has spent a year working out how a convention to renew our democracy would function. We have the playbook. Now we need the political will to make it happen. Parliamentarians must first give it their blessing and provide it with the requisite resources. Then they must stand back and let it unfold – before heeding its wisdom.

If it was to be implemented, the UK could be transformed from a political laughing stock to a global leader in 21st-century decision-making. This could be a new beginning for the mother of parliaments. “The democracy of our successors will not and cannot be the democracy of our predecessors,” wrote the political theorist Robert Dahl. “Nor should it be.”

In just four days’ time we mark the 30th anniversary of the fall of the Berlin Wall. What looks immutable and permanent can suddenly collapse, broken not from outside but from within.

A decade ago, Colin Crouch coined the term “post-democracy”, referring to a political structure where although we vote – as many of us will on 12 December – and the trappings of democracy remain, the meaning, purpose and power of the system has long since drained away.

Had you asked any Berliner on 8 November 1989 whether the political edifice that had encircled them for decades was about to fall, they would have laughed. Ask us now if we live in a healthy and sustainable democracy and we already doubt it. It is up to us to act and rebuild the bricks, mortar, networks and culture of a new democracy – before it is too late.

• Neal Lawson is executive director of Compass, the organisation that initiated the Up to Us campaign