Britain Since 1918, by David Marquand

'We don't do God," Alastair Campbell famously observed. More generally, the British don't do citizenship. This fundamental idea, so commonplace in the US or France, is invariably absent here. Citizens are the Banquo at our feast, and no one is better qualified to give them substance than David Marquand. He has long been our outstanding public intellectual, the Bagehot of our time. But ever since his life of Ramsay MacDonald (1977), his "hidden hand" has been the sense of history. He turns it to outstanding purpose in this examination of public life since the First World War, a glittering masterpiece which will illuminate debate for years to come.

Many have seen 20th-century Britain in terms of polarising conflicts – between left and right, movement and order, English centre and Celtic periphery, insularity and internationalism, tradition and modernism. Marquand, by contrast, sees it in terms of competing narratives: contested traditions that seek to give meaning to our democracy. His book is enlivened by sharp vignettes of key individuals whom Marquand, as MP, journalist, Eurocrat and don, knew. Denis Healey illustrates "the inadequacies of rationalism in politics"; Tony Benn recalls "the aristocratic Russian Narodniks who 'went among the people' only to be rejected by them". It is given distinction by the author's multiple identities, British, mid-Atlantic, European and (not least) Welsh. No one else could have matched its insights.

Marquand identifies four rival versions of democracy in modern Britain. None of the first three is seen as truly democratic. There is the "Whig-imperialist", originating with Edmund Burke, a philosophy of paternalist consensus that emphasises cultural tolerance, social balance, conservation, alongside qualified change and (more debatably) pluralistic imperialism overseas. Alternatively, the democratic collectivist tradition stemmed from the Fabians: a doctrine of purposive planning, born of statism and determinism, which proclaimed the organic evolution of the bureaucratic state.

These two narratives predominate down to 1979. Third is Salisbury-style Tory nationalism, reborn under Mrs Thatcher: zealous to defend capitalism and maintain social order. A fourth, far nobler challenger is the "democratic republican" model, originating in the 17th-century Putney debates and the writings of Milton, with such varied apostles as Tom Paine, John Stuart Mill, RH Tawney and, at times, Benn.

Sadly, all these versions of British democracy failed. The Whig imperialist, the collectivist planner and the Tory nationalist stumbled and fell. Marquand's favoured runner, the republican democrat, nobbled by Cromwell, never came under starter's orders.

His chronicle has anti-democratic parameters: two exercises in Caesarism. They are Lloyd George's quasi-presidential regime of 1918-1922, and Thatcher and Blair's centralist rule between 1979 and 2007. Lloyd George fell, arguably, because of policy successes – peace in Ireland, reconciliation in Europe, especially Russia. By contrast, Thatcher and Blair departed after terrible failures – the poll tax and the attack on Iraq.

In between these poles, the Whig imperialist view appears predominant between 1922 and 1945, and again in the Conservative 1950s. The democratic collectivist enjoyed his high noon during the Attlee years after 1945. Actually, the periodisation here is problematic. Under Churchill's allegedly "Whiggish" war coalition, civil-service planning featured Labour gentlemen from Whitehall: collectivists like Wilson, Gaitskell and Jay. There was also a wartime flourish of republicanism, celebrated by Orwell and Priestley.

Marquand sees a key period of transition in the Sixties and Seventies, with Wilson, an instinctive collectivist who followed Whig precedents, undone by proletarian and nationalist democratic modes. Heath's government, deceptively successful over Europe but failing over social inclusion, emerges as the last hurrah of Whiggish accommodation. Thatcher then waged unsparing war against both Whig and collectivist in a Tory nationalist counter-revolution. Blair embodied all these philosophies and none: the sofa-bound apostle of social coalition.

The definitions are fluid. Within politicians like Macmillan and Jenkins, Whig and collectivist collided. Callaghan's struggling collectivism was destroyed by the unions. Blair's regime seems as much a specimen of Gladstonian evangelicalism as of Burkeian evolution.

Each narrative struggled against other factors – ingrained insularity, which glorified Fortress Britain, or class division, which built quasi-democracy on the quicksands of social injustice.

Some developments condemned as failures resulted from the way power operated via the parties. Bevan's dirigiste National Health Service is attacked for undermining political citizenship. But without the audacious collectivism of 1945, it would never have come into being.

Many historians have seen 20th-century Britain as relatively stable compared with every other major European country. Marquand's book, by contrast, suggests an inherently unstable polity which needs a new settlement. He seeks a republican constitutional democracy to transcend managed populism. Meanwhile, he inclines towards the Whiggism of one-nation Tories like Macmillan and the "nearly-great" Edward Heath. He is relaxed towards Cameronian "toffs". Socialist collectivists, however, receive no bouquets.

But perhaps there is hope. During Gordon Brown's first days in power, the "Governance of Britain" green paper proposed democratic reforms, over war powers, treaty-making, free speech and the rule of law, to nurture a new sense of British identity. The select committee scrutinising the draft Constitutional Renewal Bill saw it as an incoherent retreat. But it still conveys impetus for reform, notably its attack on the royal prerogative, that Berlin Wall against active citizenship. Just possibly, Brown – democratic collectivist in his socialism, Whig imperialist in his prudence, nationalist in his unionism, Scottish republican as Jimmy Maxton's biographer – could reconcile all these ancient traditions. Perhaps the doomed hero of Marquand's crusade is not Heath but Heathcliff.

Kenneth O Morgan's life of Michael Foot is a HarperPerennial paperback

Books on democracy

Edmund Burke, 'Reflections on the Revolution in France' (1790): paternalist social order as a bulwark against chaos.
Tom Paine, 'Rights of Man' (1791): liberty and equality defined as twins.
JS Mill, 'On Liberty' (1859): private lives and rights against the state.
George Orwell, 'The Lion & the Unicorn' (1941): socialism, patriotism and a nice cup of tea.
Karl Popper, 'The Open Society and its Enemies' (1945): from Plato to Marx, utopian good intentions lead to hell.