The Labour government still faces the abyss and the Conservative Party remains stuck in the discredited orthodoxies of its past. It can only hope for an election victory on a minority of the vote. Bereft of a credible economic strategy it will divide the country.

The politics of both parties now belong to the past, not to the future. As Gramsci said, 'the crisis consists precisely in the fact that the old is dying and the new cannot be born'. The MPs expenses scandal, the constitutional crisis and the profiteering of the banking oligarchy, are all 'morbid symptoms' of this interregnum. Without real ideological change talk of a new leader will change nothing over the longer term. The task is to begin building a progressive movement that unlike New Labour will break with the legacy of Thatcherism.

The collapse of liberal market capitalism and its governing ideology has been precipitous. Its toxic culture has brought down the authority of Parliament. It has created unaccountable monopolies of capital and a centralising, micromanaging and increasingly authoritarian state. Its enterprise culture, flexible labour market, and marketised welfare reform have all helped to generate insecurity, anxiety and isolation. In public service, kindness and care are out of keeping with the dominant market culture. The chronic housing shortage is a national scandal. Unemployment is growing and areas of our country devastated in the 1980s are now sinking again in the recession. The social welfare contract that once gave some protection in times of adversity has been left in tatters.

This should be the moment of the left, but it too is trapped in the same interregnum. It lacks a coherent identity, is organisationally and numerically weak, and is unclear about its values. It has no story that defines what it stands for. The self-inflicted crisis of capitalism is serving only to highlight the weakness of the left.

We need to address the big questions of how we live as well as how we create wealth. What kind of society do we want to live in? What kind of economy will sustain it? None of the mainstream political parties have the language to ask these questions. . We need to re-invent a plural and ethical socialism rooted in the ordinary life of the individual. The central value of this socialism alongside liberty is equality, because in our differences we share a common humanity. The democratic search for self realisation lies deep in our culture and involves the right of everyone to achieve their own unique way of being human. This is not selfish individualism, it is mutualism: ‘your freedom is equal to my freedom'.

The progressive future belongs to those who find a balance between individual self-realisation and social solidarity. It will be a politics made out of alliances between old and new political actors. Despite the disillusionment with political parties, there is an extraordinary level of political, cultural and community activism in our society. There is a search for new kinds of democratic political structures and cultures, which can re-connect institutions of political power with social movements and political constituencies.

These new forms of politics are being shaped by the production aesthetic of the information and telecommunications economy. In the decade ahead the new technologies will continue to transform the economy creating a diversity of economic structures, business models and forms of ownership. The future economy will require diversity, flexibility and complexity. A new politics must create strong social foundations for ecologically sustainable wealth creation. Generous welfare support, employment rights, access to education, decent pay and social insurance will improve productivity and give workers confidence to change, learn and develop their skills. We will need to build a civic state that is democratised, decentralised and networked and which is able to both assert the national interest in new structures of global economic governance and also be accountable and responsive to individual citizens and small businesses.

In the period before the next election the Labour Party and the wider left need to begin the foundations for a post-neo-liberal political settlement. Local government ‘place-shielding' can protect vulnerable local communities from both recession and from future Conservative attack. The minimum wage and benefits must be increased and index linked. Constitutional and electoral reform requires an alliance with the Liberal Democrats so let's make one - socialists and social liberals hold much in common. We need to introduce new green taxes and taxes on those who utilise the commons of public space, nature, air and water. There is time to shut down tax havens.

Banks which are insolvent must be brought into public ownership and their toxic assets separated out. A restructured banking sector will be a key factor in economic recovery and development. Let's start making the case for a social Europe. It's time for all progressive forces to unite and confront the bigotry and xenophobia of the right. Let's build relationships with European progressive parties and social movements, and create a new internationalism for global justice. The future is about alliances, values and a return to society. We need to break the old paradigm and lay claim to the future.

The full length version of this article is published in this week's Tribune magazine, available at the Compass Conference

Jon Cruddas will be discussing these issues with Salma Yaqoob, Adam Price MP and Caroline Lucas at the Soundings session,1330 in the Logan Hall