During the darkest days of Thatcher’s de-industrialising, high unemployment, beggar-thy-neighbour dystopia of the early 1980s, there was one European leader who offered hope to the beleaguered ranks of industrial workers in the “rust belt” of former mining, steel, engineering, fishing and shipbuilding towns. For the decade from 1985 to 1995, Jacques Delors, as president of the European commission, not only helped fashion the modern-day EU and its single currency, he refined a new and much more purposeful social dimension: a “social chapter” designed to protect the rights of people at work.

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The TUC and others seized upon this new social contract especially in rapidly deregulating Britain, as a vital bulwark against the free marketeers’ drive to weaken unions, abolish collective bargaining and lower wages. And lest it be forgotten, Delors knew that without those protections, the EU’s commitment to the free movement of capital and labour risked making it horrendously unpopular. As far as Delors was concerned, if the Anglo-Americans really wanted an economic race to the bottom to drive up profits for those at the top, the EU could at least offer some safeguards for those at the bottom.

Fast-forward to our times, and what has been termed the “revolt of the rust belt”. The area north of the line from the Severn to the Wash (barring semi-independent Scotland) helped deliver the shock vote in Britain to leave the EU. In America, hitherto loyal Democrat-supporting blue-collar voters turned to that denouncer of free trade agreements, Donald Trump. When last September candidate Trump denounced Ford’s plan to shift small automobile production to Mexico, and Hillary Clinton said precisely nothing, this was perhaps the moment the penny began to drop that the Clinton Democrats could yet lose. In the Democratic party, support had shifted substantially to the most consistent critic of the North American Free Trade Agreement and the Trans-Pacific Partnership, Bernie Sanders. His candidacy was then in effect blocked by the Clinton-supporting Democratic National Committee.

These developments were the result of nearly 40 years of free market economics and what is increasingly seen as the depredations of “hyper-globalisation”.

Facebook Twitter Pinterest Jacques Delors, pictured in 1981 when the Socialist politician became finance minister in France. Photograph: Central Press/Getty Images

In the now all-consuming British debate over Brexit – a rupture with the EU caused in part by austerity – it is important not to lose sight of the bigger picture. The catastrophic collision between Anglo-American de-regulation, the crash in the financial markets it engendered, and the strictures of German and Eurozone austerity sent a firestorm through southern European economies that should never have been allowed to join the single currency in the first place. And it has helped fuel populist movements on both left and right.

Despite some of the EU safeguards, hyper-globalisation has encouraged an explosion in debt, a continued fixation with short-term profit, and a failure to invest in long-term productive manufacturing – all largely to the benefit of the top 1%, today’s greedy and gross super-elite. Not only do we know that the catastrophic collapse in the Anglo-American financial markets resulted in precisely not a single banker being held accountable – but today it is still largely business as usual for the banks. Ironically, EU competition law that largely prevents state bailouts or nationalisation, was suspended in the case of the banks, who had trillions thrown at them or which were nationalised, courtesy of the taxpayer.

A report published by the United Nations Conference on Trade and Development next month identifies some of these corrosive trends and suggests ways of reordering the world economy. Beyond Austerity: Towards a New Global Deal excoriates a situation of near permanent austerity: “Across the developed world there are insufficient levels of productive investment, precarious jobs and weakening welfare provision; and this has become self-perpetuating. Top income earners remain unscathed, while the financial crisis aftermath is marked by austerity and stagnating incomes at the bottom.”

This has to change, not least to put an end to the disruptive forces of extreme nationalism, racism and division. These evils thrive when levels of inequality begin to mirror those of the Great Depression and when trade unions are as weak as they are in countries such as Britain and the US.

Permanent austerity is the reason why Britain and much of the Eurozone continue to record such sluggish economic performances. All of this is in contrast to the still growing Chinese economy for instance and one that is pump-priming the global economy with the world’s biggest – and state-backed – infrastructure plan: the new Silk Road “Belt and Road” initiative.

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If the EU is to restore the damage that greater economic integration has caused to southern Europe – and to restore its public reputation – it desperately needs an end to austerity, and a new economic and social direction that presents an alternative to hyper-globalisation and the race to the bottom. Such a model could become attractive to many of those traditional Labour voters who opted for Brexit, especially if all that is on offer after Britain leaves the EU is a one-sided trade deal with the United States resting on chlorinated chicken imports and a rendered (in favour of US privateers) NHS.

It also needs new leaders of the calibre of Delors. He was a wise man, an instinctive social democrat and an internationalist. Last December, as he broke ranks with other European leaders over Britain and the EU, he said: “If the British cannot support the trend towards more integration in Europe, we can nevertheless remain friends, but on a different basis. I could imagine a form such as an economic area or a free-trade agreement.”

Delors, now retired, may have envisaged Britain’s departure from the EU years before the Brexit referendum. But given the reaction to “more integration” and the widespread fury towards some of the effects of free trade throughout Europe and beyond, one wonders what he would say today.

• Mark Seddon is a former UN correspondent and New York bureau chief for Al-Jazeera English TV