In November 2008, shortly after Barack Obama's election victory, his combative Chief of Staff, Rahm Emanuel, revealed the new administration's approach to the sudden economic downturn. "Rule one: Never allow a crisis to go to waste," he told The New York Times.

The left, however, never seems to miss an opportunity to miss an opportunity. Social-democratic political parties across the west are in danger of allowing the financial crisis to "go to waste". Instead of seizing this once-in-a-lifetime chance to promote a radical, progressive and even populist political and economic agenda, much of the left has retreated into a familiar and introspective comfort zone.

In the introduction of an e-book, jointly published by the centre-left Labour pressure group Compass and the leftist journal Soundings, and entitled ‘After the crash: Reinventing the Left in Britain', academics Richard Grayson and Jonathan Rutherford write that "the crisis has left the elites trapped in the discredited neoliberal orthodoxy of the past".

But are they "trapped"? Or has the right, in fact, been oddly liberated which, according to David Cameron, "got us into this mess"? Eighteen months on, few, if any, of the leading neoliberal ideologues have recanted their belief in the sort of market fundamentalism that unleashed the worst financial crisis in human history.

The irony is that leftist analyses, for example, of the fragility of financial markets and the corrosive effects of inequality, have been vindicated by events.

In January, the Telegraph claimed the latest results from British Social Attitudes survey revealed that: "The public has concluded ‘enough is enough' for increased taxation and raised spending on key services such as health and education, with support at its lowest for almost three decades." True. But what the Telegraph failed to focus on is that the same survey revealed the most popular view, held by 50 per cent of the public, was for taxes and spending to remain as they are. Only 8 per cent supported cuts.

Meanwhile, the new tax for high-earners and the tax on bankers' bonuses remain two of the most popular policies this Labour government has implemented.

The reality is that the public are far ahead of the government on financial and economic reform.

Collectivist attitudes

Throughout the Thatcher era, more people voted for high-spending, tax-raising parties than voted for Thatcher. Despite three decades of tacking to the right, under Thatcher, Major, Blair and Brown, the public has remained rather collectivist in its attitudes. Happily, recent events have only served to entrench this British mindset — and Labour's belated semi-conversion to a populist, Keynesian social democracy surely explains the narrowing of the Tory lead since the new year.

To talk therefore of a crisis of leftwing thinking is defeatist nonsense. It is the market-worshipping right that should be in crisis. But there is a serious question as to whether, after a decade-long Faustian pact with the City, Labour, as it is currently constituted, is capable of delivering the radical, progressive agenda voters crave. The party once sought to split the difference between free-market capitalism and democratic socialism by taking the "third way". In the end, under Blair and Brown, this turned out to be less a new route map for the left, than a neoliberal dead end.

‘Where next for the left?'

So here the "where next for the left?" brigade has a point. But will the forthcoming election provoke a political realignment on the left that cuts across party, sectarian and geographical lines, and incorporates, say, the traditions and ideologies of smaller parties like the Greens and non-party, community-based organisations like London Citizens? The ubiquitous Jon Cruddas, Labour MP argues in his contribution to the Compass/Soundings e-book that alliances of this kind are not alien to the Labour party's own history.

Crisis? What crisis? There is no need for postmortems; the patient is not dead. The left should be much more confident, triumphalist even; for this is a progressive moment.

Mehdi Hasan is senior editor (politics) at the New Statesman and a former news and current affairs editor at Channel 4.