Looking back over the last 50 or 60 years, what have been the most ­important changes, and the most surprising? The fact that Europe has been at peace, outside the ­Balkans, since 1945 would have been a surprise and relief to those ­living in the shadow of the two great wars. On the other hand, enlightened ­people would have been shocked by the ­recrudescence of religion as a ­public force, from ­militant Islam to American evangelicalism.

But for Europeans, the most ­remarkable development of all has surely been the decline and fall of socialism. This has been disguised, or confused. It has been truly said that the story of the past generation is that the right has won politically and the left has won culturally. That great truth has been variously illustrated by the German election in September, the New Left Review, and the latest social ­attitudes survey in the UK.

Halfway through the past century socialism in one form or another seemed irresistible. Stalin was in the Kremlin and Attlee in Downing Street, with flourishing socialist parties throughout western Europe. Since then there has been a tectonic shift to the right, and those who deny this are whistling in the dark. We are sometimes told that Britain remains a fundamentally social ­democratic country. Maybe it's literal-minded to ask, but in that case, how come Margaret Thatcher and Tony Blair were prime ministers for 21 of the last 31 years? If either of those is a social ­democrat, I'm a Maoist.

Following the implosion of Soviet Communism, the Italian left barely exists any more, the French Socialists are in disarray, and the Social ­Democrats were the big losers in the German ­election, having fallen in 15 years from 40% to 23% of the vote. Perry Anderson remarks on this decline of centre-left parties in the last chapter of his book, The New Old World, adding grimly: "The pit of contempt into which New Labour has fallen, in the closing stages of the tawdriest regime in postwar ­British history, is an extreme case."

Of late, David Cameron has been derided for making such a hash of things. It's quite true that he twists and turns and backtracks in a way that raises real questions about his judgment. Cameron may be a pretty face; a pity that lower down he often doesn't seem to know his arse from his elbow. All the same, you can see his problem.

We have had 13 years of a so-called Labour government which accepted the whole Thatcherite economic settlement, has seen an increase in social and ­economic inequality; worshipped wealth and fawned on high finance at home and abroad; passed a vast array of repressive laws; betrayed all its ­promises on the single currency – and in the end did more damage to the ­European Union than Thatcher did; allowed Rupert ­Murdoch to dictate its foreign policy; and took Britain – with flagrant dishonesty – into a needless, illegal and murderous war in order to support the most reactionary American president of modern times. After all that, you can understand why the Tories might feel short of breathing space.

Some have grasped this. As the 21st century began, the New Left Review ­celebrated its 40th anniversary (the "new" in new left is by now an archaic relic, as in New College or Wiener ­Neustadt). Perry Anderson wrote then that: "The only starting point for a ­realistic Left today is a lucid ­registration of historical defeat. Capital has ­comprehensively beaten back all threats to its rule, the bases of whose power – above all, the pressures of competition – were persistently underestimated by the socialist movement."

Ten years on, the Review marks its 50th birthday – or quinquagenery, as that journal says in its gritty plebeian way – with another morose editorial. Susan Watkins concedes that ­Anderson's words still stand – and this despite the severest economic crisis in 80 years. The Wall Street crash of 1929 and ensuing slump drove a whole generation leftward. What is so striking is that this has not happened again, and how little damage the latest financial crisis has made to the repute of the existing order.

She also ruefully admits that the record of the Review – and that of much of the left – on ecological questions was "erratic to say the least", as it was on other social issues, including "what was once the Woman Question" – and she should know. But hasn't that changed, and haven't we become a more liberal society in these 50 years?

To be sure, but "liberal" does not mean "left". The latest survey from the National Centre for Social Research showed that, for one example among many, the proportion of British people who thought that homosexual relations were wrong had fallen to 36% from 62% in 1983. And yet those who supported redistribution from rich to poor had also fallen, from 51% in 1994 to 38%, and for the first time only a minority even of Labour voters believed in redistribution.

Just so in Europe. If the Social ­Democrats were the big losers in the last German election, there was a far better showing by the Free Democrats (FPD), who increased their vote by 5% and replaced the Social Democrats as Angela Merkel's coalition partners. The FPD are a traditional liberal party of low taxes and small government, so that may be called a victory for the right. And Guido Westerwelle of the FPD, now the foreign minister, is the first openly gay leader of an important European party. The political-cultural distinction could not be better epitomised.

Maybe it wasn't so hard to see this coming. Nearly 50 years ago, one of the New Left's oracles denounced mass culture as "a consequence of a basically capitalist organisation, and I at least know no better reason for capitalism to be ended". That was Raymond ­Williams, making the usual intellectual-leftist assumption that the lower classes were driven by false consciousness or ­downright stupidity to consume pop music and movies.

But he also saw that the liveliest revolt of the moment, "particularly among the new young generation, is precisely in these cultural terms". A couple of years ­earlier a member of that ­generation had already observed that "such issues as capital punishment, ­homosexuality, Sunday opening of ­public houses, and ugly new buildings in London have generated far more warmth among intellectuals than almost any purely political question". That was the young David Marquand reporting on ­undergraduate opinion at Oxford ­University – in 1958.

Ten years on, Harold Wilson's Labour government had taken office, and a last attempt at social-democratic economic planning had met with total failure, while Wilson railed at the unions and applauded the US war in Vietnam. And what is it for which the years 1964-1970 are now gratefully remembered? Capital punishment was indeed abolished, and homosexuality was decriminalised.

On the Fogey Right, they lament the good old days, whispering the last enchantments of the 1950s, when ­murderers were hanged and queers were locked up. There will be ­mercifully no return to that. But does anyone on the left honestly think there will be a return either to the days of hope of 1945, when a Labour government could be swept to power promising the ­socialist millennium?