So Vince Cable has finally done what he kicked himself for years about not doing before, when he first had the chance. He is standing for the Lib Dem leadership.

Popular mythology suggests he enjoyed himself as interim leader after Menzies Campbell’s resignation in 2007, and regretted ruling himself out on the grounds of age.

He had managed to wound Gordon Brown’s premiership with a number of well-hewn quips at the dispatch box, thought up in the bath, and believed he could do it.

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That was a decade ago, as the banking crisis struck. Ironically, he is now 74, and six years older than Campbell was when he stepped down because commentators were afraid he was too old.

Cable won’t have a clear run. Jo Swinson, a former business minister, is believed to have been asked to run as leader by most of the 12-strong parliamentary party. But she ruled herself out on the grounds that she has a young family.

Ed Davey, the former energy secretary, might reasonably be expected to stand. So might Norman Lamb, a highly successful health minister and advocate of mental health services.

Cable has some advantages. He is immediately recognisable, and is one of the handful of politicians recognised primarily by their first name (Ken, Boris). He had a good track record on the financial crash, which he is credited with having foreseen.

Even his faux pas – being secretly recorded slagging off the Murdoch press when he was supposed to be in a position of quasi-judicial impartiality – seemed to rebound in his favour. He looked not just human, but also concerned.

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He is thoughtful and practical and was successful as business secretary, turbo-charging a new generation of apprenticeships and the new Catapult centres, which were designed to enable the UK to innovate, and which provided the bones of a new industrial strategy.

His disadvantage is his deep reserve. He has some charisma, but none of Nick Clegg’s bonhomie, which means his success depends on the public projecting their hopes on to him rather than their fears.

The real divisions within the Lib Dems are not well understood by outsiders. The old Orange Book v the Social Liberals debate was more like an insiders-v-outsiders spat in the coalition years.

The Orange Book itself was a call for a balance between different kinds of freedom – a much-needed reconsideration of a sort of faux Fabianism, but in practice offering little new. But then neither were the Social Liberals.

The real division, which is only partly a result of the 1988 merger between the Liberal party and the SDP is the divide between Liberals and Social Democrats.

In those days, it was the Liberals who carried the radical torch, the so-called beards and sandals. Last week, the Liberal humorist Jonathan Calder described the “men in sandals” coming for Tim Farron, like the mythical “men in grey suits” in the Conservative party.

The truth is that beards and sandals have long since disappeared from Lib Dem conferences and it is sometimes hard to discern a Liberal radicalism that isn’t just the usual watered-down Fabianism.

Cable fits awkwardly into this division. He has gone from being the great advocate of conventional trade in the party’s policy debate to being an angry campaigner against free market excess.

The great divisions in the party leadership during the coalition years, during which he was urged to challenge Clegg for the leadership, grew out of a disagreement about the correct attitude to banks during the crisis.

As business secretary, Cable was locked in mortal combat with the Treasury, which wanted to minimise the discomfort for conventional banking. There were those, mainly on the SDP wing of the party, where Cable comes from, who felt that the coalition was being too soft on the semi-criminal elements of UK banking.

He was right in that argument, as it turns out. We may have a safer banking system in the UK thanks to the coalition, but we still have a largely dysfunctional one.

In that respect alone, he might deserve the party crown. But whoever wins it has to rise to this intellectual challenge, laid down for the party by the rise of Jeremy Corbyn: what is Liberalism for if it isn’t a pale reflection of failed Fabianism?