This week all eyes have been fixed on Theresa May and the unfolding disaster that is Brexit. While Monday night’s defeat by 149 votes was not the historic low the government endured in January, it was, by any measure, an unmitigated disaster. This prime minister has now lost more parliamentary votes than Thatcher, Blair, Brown, Cameron, Major and Heath. Combined.

“In normal times she would have resigned”, mused the BBC’s Andrew Neil, “except these aren’t normal times”. He was right of course, but why these aren’t normal times, as is almost always the case, wasn’t made clear. May is yet to resign because the alternative is a general election where Labour would win. Unlike the era of Kinnock, Blair or Brown, that wouldn’t just be a blow to the Tory party, but also the catalyst for a wider transformation of the economy.

At this point Corbyn-sceptics point to recent polling which reveals Labour to be trailing the Tories. While the formation of the the Independent Group has had a slight impact on Labour’s vote, as has the permanent state of war declared by the likes of deputy leader Tom Watson internally, the real evidence suggests Labour would overturn the Tories.

A tweet from ITV’s Robert Peston on Monday night captures why: “From a senior Tory: ‘Feels like the last rites of the Tory party’. Slightly overstating perhaps. But captures the mood.” Only this wasn’t an overstatement. When you have won only one majority since 1992, have a shrinking, ageing membership, and have no ideas – or even capacity to organise in much of the country – you are in trouble. The Tories are the simulacrum of a party, the product of opinion push polls and a supplicant media propping them up. Hollowed out by demographics on one side and sycophancy to a now desiccated economic orthodoxy on the other, their coup de grace appears to be Europe. If Labour get it right over the next five years, the Tories will be out for a generation. More than that, their only chance of a return will, as with after 1945, be on the back of a wholly different political platform. The biggest obstacle to that dream scenario for progressives isn’t Brexit – which is a distant second – but internal party sabotage, of which Watson’s ‘Future Britain Group’ is just one expression.

The first meeting of that group took place on Monday evening. Perhaps rather fittingly, it was primarily attended by people who nobody has voted for. Among those Labour peers present were Neil Kinnock, Andrew Adonis, David Blunkett, Toby Harris and Peter Hain. Astonishingly the key speaker was Peter Mandelson, a man who openly admitted only two years ago that he was trying to undermine Corbyn “every day”. To top it off, it was later discovered that someone – who of course had no idea the Independent Group would leave Labour on 18 February – just so happened to buy the Future Britain Group internet domain on the same day.

Fundamentally, though, I welcome such people bidding to ‘renew’ Labour’s social democratic tradition. The truth is Labour had previously moved so far to the right during the Kinnock, Blair and Brown years that it required a socialist leadership to champion even remotely progressive policies. Rather than being grateful, some MPs continue to attack him. The reason why is that they aren’t social democrats in any meaningful sense.

What’s more, they appear to have no grasp that the economic basis of Blairism was growth borne of financialisation, a one-off bubble in asset prices (particularly housing) and a favourable global economic cycle. The New Labour compact was to accept an ever greater role for markets to create growth and redistribute some of its proceeds back to the less well off. Only now Britain’s GDP per capita and productivity hasn’t moved for a decade, there’s nothing left to privatise and the wheels are coming off for outsourcing. The political economy of Blairism, or what Mr Watson appears to think is social democracy, has vanished. Grace Blakeley’s book on financialisation, out later this year, will address all of these issues. One suspects the people that need to hear these arguments the most aren’t prepared to listen.

What you probably didn’t see over the last week, what with the media’s preference for Westminster gossip, was the outlines for the next Labour manifesto – and with it a compelling form of modern socialism.

The outstanding policy in this respect was free bus travel for all, public transport as a universal basic service – which was announced by Richard Leonard at last weekend’s Scottish Labour conference. That was followed on Monday by a New Economics Foundation (NEF) report, endorsed by John McDonnell, proposing to replace the tax free personal allowance with a guaranteed income for everyone over 18 of £48 a week. Just as long as they earn less than £125k a year.

Those two policies join the idea of a four day week, which saw a meeting in parliament last week including McDonnell, NEF and Tribune magazine where the shadow chancellor said the idea was one “whose time has come”. McDonnell also advocated the idea of a “green industrial revolution” over the weekend in Dundee, saying this would create 50,000 jobs. And that’s just in Scotland.

While the 2017 manifesto was hugely popular, it was very much an attempt to turn back the clock on pre-austerity centre-left politics. After all, things like scrapping tuition fees and increasing corporation tax have always been mainstream thinking among the unions, Labour members and even much of the parliamentary party.

Moves over the last week, however, represent something different. The commitment to ending neoliberalism remains of course, with its commitment to expanding the public sector through taxing the rich. But next time this will be joined by a commitment to universal basic services (probably in education, health and social care and transport); a limited form of universal basic income; a shorter working week; and something similar to a Green New Deal to drive final demand, create green jobs and rapidly decarbonise the economy.

Despite the Tories’ dull explosion, the Independent Group (which basically stands for ‘meh’), and the likes of Watson trying to present decades of intellectual vacuity as a hunger for ideas, this week saw something even more important than all of the above – the foundations of how a Corbyn government would begin to build twenty-first century socialism.

And you know what? It’s exciting. And absolutely worth fighting for.