That which is dangerous can also be thrilling. Many liberal democracies are engaged in something dangerous, as questions of identity, community and nationhood are being asked with a fresh urgency, with some of the answers turning out to be deeply disturbing. But is there also something thrilling going on? The capacity for democracy to throw up surprises, such as Britain’s 2017 general election result, is mesmerising. Brexit may be a famous act of economic self-harm, but something new will be born one way or the other. Still the danger persists and may be growing.

That this is happening now, as opposed to 10 or 20 years ago, is a direct consequence of the disintegration of the economic policy framework that has held sway in Britain, the US, the European commission and many multilateral institutions for much of the previous 40 years. That framework is often referred to as “neoliberalism”, even if the term irritates a certain class of pundit, for whom it is some sort of swearword without any clear referent. Its disintegration is producing conflicting sympathies, as many on the left come to realise the xenophobia that can be unleashed in the absence of stable market-based rules.

For George Monbiot, neoliberalism should best be understood as a “story”, one that was conveniently on offer at precisely the moment when the previous “story” – namely Keynesianism – fell to pieces in the mid-1970s. The power of stories is overwhelming, as they are “the means by which we navigate the world. They allow us to interpret its complex and contradictory signals”. The particular story of neoliberalism “defines us as competitors, guided above all other impulses by the urge to get ahead of our fellows”.

This story may not have been all that attractive, but it provided meaning and clarity. It offered a guide on what to do and how to live. With the rise of Margaret Thatcher and Ronald Reagan, neoliberalism came to govern how policies were designed and institutions constructed. More diffusely, it came to shape how we understand ourselves, leading us to take on ever more responsibility for our own needs, economic security and wellbeing, devaluing social bonds and dependency in the process.

‘Monbiot’s hopeful, practical energy is precisely what the left needs.’ Photograph: Sam Friedrich/The Guardian

The grand global difficulties of neoliberalism are plain to see. The financial crisis was testimony to the stupidity of deregulation, while the inability to move on from it demonstrates that orthodox economic policy tools no longer work. Solutions to climate change are hamstrung by the need to respect existing corporate and financial strategies. But Monbiot also details considerable psychological and biological evidence for how the ethos of individual competition harms us all, running counter to our innate needs and instincts. Loneliness and distrust are not just the defining social problems of our age, but increasingly posing risks to our health.

The problem is that we have no new story to tell, and are therefore trapped in a groundhog day of repetition. The principal objective of Out of the Wreckage is to identify exit routes from this miserable condition. Few of the policy ideas contained within it are original to Monbiot (he credits their sources regularly and generously) and some (such as participatory budgeting and basic income) have been around for some time, but they are rarely assembled into a single overarching narrative. Monbiot is offering his services principally as a storyteller. He reserves particular enthusiasm for the environmental economics of Kate Raworth and the participatory campaigning techniques of the Bernie Sanders campaign.

To construct the new story, he leans heavily on the burgeoning evidence for our innately social and empathetic nature. Human beings are the “supreme cooperators”, which explains our dominance within the natural world. Altruism and concern for others’ feelings are evolutionary properties that are central to our biology, hence the fact that “social” pain (such as loneliness or grief) produces many of the same symptoms as “physical” pain. Most of this research was unknown when the neoliberal story was first being told by economists such as Friedrich von Hayek in the mid-20th century, but it highlights central aspects of the human condition that are neglected by our individualistic and competitive culture.

Bernie Sanders greets supporters after a campaign rally in Santa Maria, California. Photograph: Lucy Nicholson/Reuters

What this suggests, Monbiot argues, is that a new political story must privilege belonging above all. We need to feel we belong to a particular place and a particular community, with whom we can achieve common goals. We need to combat the epidemic of alienation with a new set of institutions, through which individuals can collectively shape their own lives and environments. Out of the Wreckage makes an impassioned and optimistic case for greater democracy in virtually all areas of life, from global to local, kicking big money out of politics in the process. At the same time, Monbiot’s intuition regarding “belonging” resonates with the present political mood. Was it not a desire for belonging that drove much of the Brexit vote, or at least a sense of not belonging to Brussels?

This is a highly contemporary book, potentially offering the left a set of implements with which to win arguments on terrain often dominated by the populist right. After the depressing sight of Boris Johnson touring ex-industrial regions in a bus promising NHS funding that he knew would never materialise, the need for a more sincere vision of how people might “take back control” remains pressing. Monbiot’s hopeful, practical energy is precisely what the left needs right now. Some of it borders on the utopian, but then so did Hayek’s story.

Optimism does produce its blind spots. Monbiot is alive to the thrill of popular power, but the dangers are absent. He touches on the pessimistic vision of Thomas Hobbes, the 17th-century philosopher who argued that the central function of the state is to stop us slaughtering each other, given our innately suspicious and arrogant nature. “Today,” Monbiot reassures us, “knowing what we do about the nature and origins of humanity, we can state unequivocally” that Hobbes’s view “is mistaken”. We’d all like this to be true (even Hobbes would have done), but that’s a brave call, especially on the post-neoliberal precipice on which we stand.

The yearning for belonging has historically been associated with romantic conservatism, although Monbiot offers some good counterexamples, such as the Clarion magazine, which formed socialist societies and ramblers’ and cycling clubs during the 1890s. In the current climate, this poses a couple of questions, at least for the less optimistic reader. One is whether democratic participation can deliver the same sense of belonging as the darker political forces that are stirring, with their promise to look after their own and lock out the others. If the left is to start a conversation about belonging, it needs to be confident that it can finish it. After all, there is another storyteller in Britain, also challenging the cult of GDP growth and prioritising a sense of belonging: his name is Nigel Farage.

It is far from certain that democracy – even thriving, inclusive democracy – will produce the happy social and environmental outcomes Monbiot expects it to, including a respect for science. The indeterminacy of popular power is both its thrill and its danger. At one point Monbiot writes expertly on how to combine music, “energisers” and speakers to convert the vitality of protest marches into more lasting campaign outcomes. “The energiser would bring back the musicians to lead the crowd in an anthem: there’s no better way of generating a sense of solidarity and shared emotion,” which sounds as much like a Trump rally as the ones that attract Monbiot’s sympathies.

Monbiot might well respond that severe dangers have already been realised, in the form of climate change, political corruption, psychological distress and inequality. Why live in fear of emerging enemies, when the established ones are already running amok? Out of the Wreckage is partly an activists’ manual, which aims to coordinate and energise those who want a different world. You don’t build an evocative story out of warnings and fears. I hope it succeeds.

• Out of the Wreckage: A New Politics for an Age of Crisis is published by Verso. To order a copy for £10.49 (RRP £14.99) go to bookshop.theguardian.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min p&p of £1.99.