Farewell to the 2010s. The decade was captured by an intellectually bankrupt right wing for all the wrong reasons, above all because of a fear of foreigners. Yet for all that, it did give us a measure of progress – from our smartphones to declining poverty, although even on that metric, Britain managed to buck a global trend. From the perspective of any British believer in Enlightenment values, good riddance to the dying decade.

Yet in 2009, matters did not look promising for the libertarian right. New Labour had been in power for 12 years and on all the key challenges of the day, the only effective policy responses were forms of collective action, whether on climate change or terrorism, the declining effectiveness of antibiotics or the power of multinationals. The financial crash of 2008 was the consequence of hyper-deregulation, following the palpably absurd rightwing faith that markets were magic. The future lay with the left, natural believers in the power of good government and international co-operation, in particular the EU. Thoughtful Tories openly pondered whether they could ever win a general election outright again.

What is obvious, looking back, is that the right did not so much win the 2010s as the liberal left lost them. And it lost because at bottom it has a fatal, divisive weakness. Lack of any agreement about what being liberal left can and should mean creates a sectarianism that unless confronted consumes it, the left defining itself as the custodian of the “socialist” flame and everyone else, in varying degrees, as a traitorous “neoliberal”.

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The very term “neoliberal” has become a catch-all to indicate contempt for any policy position or political figure the left considers to be departing from true “socialism”, which in turn must be based on the subordination of capitalism to the state rather than its reform. This is rather as the right uses “Marxist” to describe any departure from ultra free-market principles involving state ownership or regulation. Is it Marxist for the state to own a railway or the national grid? Is it “neoliberal” to believe that some goals can be achieved without state ownership? It’s a conspiracy by both sides against evidence, thought and practice.

But on the left, the passions aroused created a never-ending sectarian war. Making the compromises necessary to create a governing coalition that could exercise power is not on its agenda: the left’s struggle is all about fighting for and delivering a particular definition of socialism – or nothing.

It was sectarianism that drove the enmity between the Blair and Brown camps in the New Labour government, setting up what was to follow. If David Miliband had fought either the 2010 or 2015 general elections, he would have denied David Cameron his majorities. But the Brown camp ensured any challenge before 2010 was likely to fail. Then Ed Miliband, a clever, values-driven politician but no national leader, did not resist Brown’s intense, sectarian pressure to stand against his brother in 2010. The results we know.

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Scrapping Labour’s carefully constructed electoral college system in which MPs, members and trade unionists each had a third of the vote for leader, Miliband created the route to power for Jeremy Corbyn after he lost in 2015. Corbyn may have been an iconic, pacifist, socialist idealist, but he was happier to campaign than govern and, as events would prove, could never be elected prime minister.

Meanwhile, the Liberal Democrat leader, Nick Clegg, and his ambitious, narcissistic henchmen drank the austerity Kool-Aid and signed up for a full-blown coalition with the Tories. It was win-win-win for the Tories: relegitimation, government and a chance to crush a party that was increasingly threatening their home county heartland. Smarter Lib Dems, such as Vince Cable, excluded from the negotiations, would have offered a limited confidence and supply agreement with Cameron – and picked up even more seats in the inevitable second general election.

As it was, the party became junior, virtually powerless members of a coalition government that took the crazed decision to lower the budget deficit solely with spending cuts. The resulting austerity was a crucial influence in the Brexit referendum.

This was the tinder Nigel Farage was able to ignite. Blaming immigration rather than austerity for working-class hardship and conflating all immigration with the EU, he managed to raise the salience of an issue that was not even in the top 10 as late as 2012 into one that has consumed the nation. But again, had Labour been led by anyone other than the long-time Europhobe Corbyn, Remain would have won and the opportunity so brutally exploited by Boris Johnson would never have been opened up.

Will the liberal left gift the 2020s to the right in the same way? The first clue will be the Labour leadership contest. If the eventual leader wins as a sworn enemy of “neoliberalism”, be sure that all constructive thought will be expunged from Labour for another electoral cycle. It is possible to believe in the power of government, the reform of capitalism, the necessity of social justice and the imperative to confront the environmental challenge and still want a vibrant, purpose-driven private sector. Shared values mean those are common ends: if the policy mix to achieve them tries to mitigate high taxation, state ownership and a proliferation of government agencies, then that strategy should not be written off as “neoliberal”.

Nor can Brexit be buried. EU membership benefited Britain and Johnson’s impending hard Brexit will harm it. More than that, the EU is a noble cause and a force for good in the world. Leave voters who so desperately wanted better for themselves were sold a lie. To desert the pro-EU cause now is wrong both in principle and, as the lie becomes exposed, in practice. Johnson’s failure is not guaranteed. It remains true that addressing the challenges of our times falls more naturally to the liberal left than the right. But without the same ruthlessness about the pursuit of power, the opportunity may never arise.

So: no more sectarianism, no more hurling vacuous insults at those who don’t sign up to the faith. Exploit the left’s natural advantages and back political winners. Otherwise, the right will control another decade. It is not only social democracy at stake but, as Britain dissolves into an one-party state, liberal democracy itself.

• Will Hutton is an Observer columnist