One cold night in February 1900, representatives of the British working class congregated in the Memorial Hall, a hub of non-conformist and free-thinking London.There they formed the Labour Party. Knowingly or otherwise, this Saturday thousands of activists will march past the site where that building once stood — now home to a nondescript office block at the southern end of Farringdon Street — in their protest against the new Conservative government.

The differences between those two gatherings are a parable of the British Left; of its peregrination from insurgency to conservatism. It is hard to overstate the radicalism of that meeting in the Memorial Hall. Decades of industrialisation had produced a vast urban proletariat. This in turn had spawned new sorts of organisation: trade unions, friendly societies and co-operatives. Now these were to form a single political party to take on the Victorian establishment by militating for working-class representation in Parliament.

By contrast, the marchers on Saturday will be demanding not new institutions but the reinstatement and revival of old ones. They will chant against an austerity that, they claim, is dismantling Clement Attlee’s welfare state. They will demand free and universal public services, a stop to spending cuts and the reversal of privatisation.

Among them will be Jeremy Corbyn, one of the four MPs whose name will appear on ballots in Labour’s leadership contest. Most of the party’s members and MPs are closer to the political centre than the affable MP for Islington North. Yet some of his intellectual traits — a tribal loathing of Tories, a nostalgia for the post-war settlement and most of all a profound institutional conservatism — reach deep into Labour’s mainstream.

That much was evident in the party’s unsuccessful election campaign. It railed against the evils of the Conservatives. Too often it promised merely to shelter Britons from some of the realities of globalisation. Its main intellectual strain, “Blue Labour” was a paean to the simpler, calmer Britain of the Fifties.

The party’s leadership election so far has borne similarly conservative (if less overtly interventionist) tendencies. Andy Burnham wants to preserve the NHS in aspic. Yvette Cooper wants more free childcare — a good idea, but one which the new Government is already implementing. Liz Kendall has been called the “New Labour Taliban” by one of her rivals for venturing even gingerly into the territory of institutional reform. The candidates waffle about decentralisation but go no farther than the Government on the subject. The contest as a whole has been lacklustre, its language riddled with banalities.

This lack of verve is part of the broader crisis of social democracy. Across Europe, parties such as Labour are struggling. In Madrid and Athens last year I met former activists of Labour’s sister parties who had defected to the hard Left; not, they claimed, out of hope, but out of protest.

The phenomenon is not confined to Europe’s struggling south. In Berlin this spring senior figures of the once-mighty Social Democratic Party of Germany (SPD) told me that their party considered the next election already lost. In Paris the governing Socialist Party is bracing itself for defeat at the hands of Nicolas Sarkozy in 2017. One of the other (rare) centre-Left governments in Europe, that of Denmark, may lose power in the election there on Thursday.

Across the continent, social democrats have become the conservatives, fighting a rearguard action against three advancing foes: centre-Right rivals, less compromising forces on the Left and — most of all — the exigences of automation, digitisation and globalisation. In elections they are paying the price for failing to adapt to an age in which populations are ageing, capital is mobile, production is moving from factories to workshops and offices, jobs are vanishing and reemerging in new parts of the economy and social values are shifting in a more liberal direction.

They tack between the inconsequential and the incredible. Voters detect a whiff of insincerity. They vote with their noses, as it were; for more intellectually confident parties on the Left and the Right of the social democrats.

It does not have to be this way. A bold Labour leadership candidate would start by forging a new approach to public finances. They would push to replace income tax with levies on land and consumption. They would propose means by which ordinary citizens could take a stake in capital; a British sovereign wealth fund, for example. They would ditch their party’s assumption that universal public services can only be provided one way, looking instead to a Dutch-style insurance system to fund healthcare, a greater role for co-operatives as service providers and means-tested co-payments for certain benefits.

They would think big about the real inequalities and iniquities of Britain today: proposing the abolition of the green belts around big cities, for example, and — disinterring social democracy’s liberal heritage — the legalisation of drugs. They would seek genuinely to outflank the Conservatives on devolution by offering city regions something approaching the “full fiscal autonomy” demanded by Scotland’s nationalists. They would advocate mechanisms to redistribute the economic benefits of immigration. They would promote institutional experimentation: why not let city halls float on the stock market, for example? Or let universities run public services?

Whether or not these are the right avenues for Labour to take, the party has to rediscover its insurgency. Voters have better things to do than worry about abstract political ideas. But they have an uncanny ability to tell an intellectually confident party from a moribund one. Faced with a choice between conservatives and Conservatives, they will back the latter.

Jeremy Cliffe will write The Economist’s Bagehot column from next month.