THE ongoing unprecedented debacle engulfing the Tory government has been long in creation. Liz Truss is a blinkered and inflexible ideologue, but the present state of politics, government and economics is about more than the 10 days between the mini-Budget and 45p tax cut U-turn, more than the past 12 years of successive Tory governments and more than the past 43 years that have seen 30 years of Tory governments, none of which Scotland voted for.

This crisis has a deeper set of reasons and drivers. The first factor is the long-term story of the UK’s relative economic decline, which has become marked and painful in the post-war era but began in the 1870s when UK industrialisation began to be surpassed by new forces of capitalist development in the US and the newly united German Empire.

UK governments, policy and economics have mostly denied this fundamental reality, bar short periods of doubt, anxiety and calls for reform. In recent decades, there has been a profound denial of basic economic realities on the Tory right. Hence, we have lived through the “Thatcherite economic miracle” – which was no such thing but is still the central reference point of Conservative politics, Liz Truss and “Trussonomics”.

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This fantasyland mindset drove Brexit on the right, believing that the UK had to break free from the supposed shackles of the European Union, which was portrayed in irreversible decline. This last point was based on the EU’s relative decline as a share of the world economy while ignoring the same decline of the UK.

A second contributory factor is the increasing desperation of UK governments in how they manage this decline, while simultaneously trying to deny it. In the maelstrom of the past few days as the British establishment, a figure as David Dimbleby described the Truss-Kwarteng “mini-Budget” as a “shitstorm”. Not only that, he posed that the crisis of the past few days was comparable with the two post-war moments of UK Government domestic policy humiliation: the 1967 devaluation by Harold Wilson and that of 1992 when the pound was forced out of the European Exchange Rate Mechanism.

All the UK devaluations – 1949, 1967, 1992 – are a backdrop and response to long-term UK economic decline. As the pound-dollar rate slowly and inevitably heads towards parity and eventually below this, it is worth remembering that for most of the 1800s, the rate was above $5 to £1 – including a spike of $10 during the American Civil War – and in the 20th century, $4.03 until 1949.

A third influence is the weakness of the UK economy and economic base, aided by this relative decline, plus the lack of a manufacturing and productive base, and the short-term, speculative nature of British capitalism, as opposed to more long-term horizons such as those seen in Germany, Japan and France.

The dominance of the City of London, which arose to fund the commercial arm of the British Empire, has been characterised by its disconnection from the real economy of business and commerce. The City both reinforces short-termism and holds back and damages the economy, overshadowing real economic growth and crowding out genuine investment and innovation.

Added to this, a fourth factor has been the ideological capture of British politics and the main Westminster parties – Tory, Labour and Liberal Democrats – by neoliberalism that advocates “free market capitalism”, a smaller state, deregulation, and lower taxes.

Over the past 40 years, this has meant promoting the forces of finance capitalism, the City, speculation and short-termism – the very factors which have held the UK back – seeing them as virtuous and encouraging them to let rip throughout society. Hence we have all been encouraged in recent decades to financially lever our lives, take out mortgages, pensions and debts, driving up overall household debt as a share of GDP to record levels.

A final contribution to the mess we are in has been the deformation of the British state. All governments and states make mistakes and misread situations, but it is clear that the characteristics of the British state have been dramatically altered.

The organs of the central British state were once shaped by a conformist, “upper-class mandarin” group of civil servants who believed that they had a liberal, enlightened view of the world. There were many problems with this worldview, but it was anchored in support for a social contract between governments and citizens, one which gave us the post-war settlement and an era of managed capitalism of full employment and rising living standards.

The assumptions and culture of that class have been blown apart by successive UK governments, and have been held in open contempt by radicals who have dared to challenge the system – Thatcherites, Bennites, Corbynistas and now the Liz Truss-Kwasi Kwarteng administration.

A model of government that had major shortcomings but on the whole tried to do good has been replaced by one which is narrowly ideological, intolerant of alternative views and about promoting the interests of a self-regarded, self-interested class of people who see themselves as global winners – the true meaning of “global Britain”.

This is the background and long story to the present state: the UK’s long-term decline, UK Government denialism, the over-reach of the City and the UK’s weak economic base, the pernicious ideology of corporate capitalism and acquisitive individualism, and the morphing of party politics and the British state.

The Truss-Kwarteng debacle and government will pass, but the bigger challenge is how does the UK get out of this vicious cycle of decline, denialism and ideological capture.

These questions used to worry UK policy-makers at those points when declinism became centre-stage, such as in the 1930s and the spectre of mass unemployment and hardship, or in the late 1950s and 1960s as Germany and Japan overtook the UK in economic growth and prosperity.

Today there is an embedded class around government, media and the City whose interests are aligned to maintaining the suffocating British consensus of anti-social, freewheeling capitalism. It is there in the Daily Mail and Express, Daily Telegraph, and Spectator and right-wing think-tanks such as the Institute of Economic Affairs and Taxpayers’ Alliance – which are, in reality, advocacy and lobbying groups for an anti-state agenda.

I recently encountered this ideologically blinkered perspective at an event where Merryn Somerset Webb, editor-in-chief of magazine Moneyweek, blithely said in complete confidence not to worry about the coming economic storms because down through the years “capitalism is broadly self-correcting” – an analysis only found in orthodox economic textbooks.

This worldview has to be taken on explicitly and defeated. To do so requires not just revealing the chaos, carnage and brutality its ideas cause but also posing a set of alternative ideas, values and policies. That requires addressing all of the above – doing something about the UK’s weak economic base, the power of the City and finance capitalism, and understanding how an ideological elite has captured politics and the state.

The foreseeable future will be a shaky, bumpy ride, uncomfortable for millions. But there is a major chance that we are seeing – in the UK and across the world – the end of the illusions and deceits that have dominated politics and economics since the 1970s.

This will require a Labour Party serious about change, economics and political economy, which is prepared to address the shortcomings of British capitalism. And it will demand the SNP embrace economic thinking and critique capitalism in ways previously unseen but now a prerequisite of Scottish independence adapting to the demands of the age.

This is an age of high stakes, but the toxic Toryism, neoliberalism and corporate class groupthink which dominated recent times has imploded. We have to drive it from government and public life in order to reset the government, politics and capitalism.