Compass asks whether Labour is dead. The answer is...

I have huge respect for Compass, and those who have given it depth over the past decade or so, like Neal Lawson.  It is much more than a Labour think-tank and it doesn't beat around the bush.

They have just published a pamphlet called Is Labour Dead?

This can't have pleased Andy Burnham and his rivals, who are running for the leadership at just this critical moment. It also struck a fascinating and powerful balance between pessimism and optimism - along the lines of Churchill's "I have nothing to offer you but blood, tears, toil and sweat".

Sometimes the only way you can see clearly, and sweep away the illusions - which get depressing in the end - is to articulate the depth of the problem.

Lawson and his colleagues have an objective. They want a much more loosely affiliated alliance of progressives to remake the left. They may be right. But the question in the title demands an answer, and the answer has to be - yes, nearly.

Throughout its history, the Labour Party has been an alliance between middle class Fabians - technocrats steeped in welfare economics - and trade unionists.  They never really meshed together, but the alliance had a kind of momentum. Once you begin to separate the party into its constituent parts, you realise the seriousness of their predicament.

1.  Fabians. The old utilitarian approach to poverty and services reached its apotheosis under Tony Blair, the most utilitarian prime minister since the demise of Bentham, but has always proposed redistribution as the solution - allowing the economy to continue and then intervening to redistribute afterwards. In an economy designed to manufacture billionaires, this is now pointless.

2. The working classes. They have been in decline since 1945, and play a decreasing role in UK economic life. No party can form a government just by representing them.

3. The trade unions.  They may be needed more than ever, but they have a declining role and have been unable to make the leap from the shop floor to new working arrangements.

4. Socialism. The basic ideas behind socialism of central control and a centralised welfare state which redistributes wealth are in decline nearly everywhere. I don;t see many socialists left in the UK.

Given that there are almost no socialists left, there are no intellectual roots for Labour. No basis for discussion. And where they are talking about solutions which seem to have some life to them - the kind of mutualism discussed by leadership contender Liz Kendall, she sounds more like a Liberal.

And it is worse than that. The kind of public service solutions put forward by the last Labour government, a kind of turbo-charged utilitarianism, have rendered those institutions unresponsive and ineffective.

There is the core of the problem: Labour has no organising idea behind them, and are associated everywhere with bureaucracy.

Is there a way back? Well, there could be because - along with much of the European left - Labour has a big vacuum where they ought to have a rival bundle of ideas designed to promote prosperity.

Not re-distributing prosperity (they that might be important too). Not relabelling mainstream business policies and claiming to be more effective at promoting them.

There is no chance of revival unless they can put forward a new, convincing approach to creating wealth. In fact, the world is waiting for just this, as they realise - a little more every day  - that the old bundle of ideas has not worked.

So the race is on. Can Labour shape this or will the Lib Dems get there first? It will come down to who is listening the most, who is debating with the most open minds, who is most seeking after the truth?

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