Image: Dick Pountain.

2013 was a depressing year in which, despite deceptive claims of recovery, the full extent of our slow– motion economic train wreck became far clearer. In the aftermath of the 2008 banking crisis, welfare states continue to be slowly dismantled throughout the USA, UK and most of Europe, in the name of reducing government debt. Within the UK's coalition government, the Tory party itself is an internal coalition between those like Cameron who retain some traces of social decency and the blue-in-tooth-and-claw wing who would like to leave the EU, crush trade unions and grind the working class back into Victorian squalor. During 2013 the cover was blown and the success of the latter faction became plainly visible in measures like:

- the "bedroom tax"

- cuts to disability benefit

- inflation of a new housing bubble through Help-to-Buy

- escalating anti-immigrant rhetoric

Following the 2008 crisis many Western governments went into deep debt in order to avert total financial meltdown: the Keynesian way out of this debt would have been to reflate the economy through public works and restoring wage levels, while the Neo-liberal way was to cut back state spending and impose austerity. During 2013, opinion polls suggested that the Tories have successfully sold the UK public on the necessity for austerity, while the Labour Party has failed to make the case for Keynesian reflation because of its internal incoherence.

Perhaps we must seek an explanation in psychology as much as politics; perhaps austerity plays into a residual British puritanism that believes we should all wear sack-cloth to pay for our earlier sins of over-consumption. The UK public appears also to be increasingly anti-European and anti-immigration, but when it comes to their own pockets – for example over energy bills or a privatised NHS –  they do retain some vestigial allegiance to social democratic solutions. The mental split that runs through the Tory party (and also the Labour Party) merely reflects this split in public opinion, as pressure from our pervasive mass media perforce turns all parties into populists. None of them are willing to take the electoral risk of trying to alter public opinion.

No such puritan masochism impedes those in the banking and financial sectors who plainly see what we're headed for, thanks to the still-hidden mountains of bad debt inside the financial system. They've decided to loot what's left of the welfare state before the final wreck. Fiddling Libor and foreign exchange rates, cocaine and rent boys at the top of the Co-op bank and the corporation of Toronto, everywhere you look there are signs of pillage. As more and more money gets hoovered up by a tiny top echelon, our societies more and more fit the Occupy movement's depiction of the 99% versus the 1% – the difference between the food bank and MasterChef, between the horsemeat burger and pigeon-breast-with-sautéed-girolles. (Indeed, the Left's only real propaganda success of last few years was Occupy's imprinting of that 99-to-1 ratio on the public mind.)

It's going to be a very long and difficult process to rehabilitate the social democratic vision of full employment, regulated capitalism and generous welfare, but some people have been at least making the arguments – and rather surprisingly all the best thinking at the moment is coming from the USA. Alexander Payne's bleakly comic film Nebraska brilliantly conveys what the loss of manufacturing jobs and dignified labour can do to the human spirit: a lottery society where people subsist on the forlorn hope of winning instant riches. That's part of the problem US professor Cas Mudde alluded to in his excellent openDemocracy piece in November: "(Real) social democracy is not just unknown to several generations of voters, but it is contradictory to their individualist or ethnicized worldview."

He concluded his downbeat article with a sensible suggestion, that we ought to study the highly successful history of the American conservative right who set out some decades ago to dominate the Republican Party through continual evangelism by conservative intellectuals and think tanks. That should give you some measure of the size, and maybe also the timescale, of the problem we are now facing.