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Here's one thing on which we can all agree. The Liberal Party of Canada is right when it says it needs "radical change." Today's Liberals are essentially the party of Toronto's Annex class, and not much else. Unless they can resuscitate themselves, the Conservatives will run Canada until the seas run dry. (The NDP will never run Canada. Trust me on this.)

Sadly, radical change is not in sight – not this weekend, as the party's tattered remnants gather in Ottawa to map out their Road to Renewal – and not any time soon. No party that's ready to elect Sheila Copps as president is sincerely interested in renewal.

Then there's the matter of what they stand for. "The Liberals have shown they're only capable of coming up with old ideas, tired ideas and bad ideas," says a cynical friend, and on the evidence, he's right. As the Western world is buffeted by economic storms, rising inequality and unsustainable entitlements, the Liberals are preparing to debate such urgent matters as legalizing marijuana, bringing back the Wheat Board, expanding hate-propaganda laws to include gender hatred, and abolishing the monarchy (a task that's almost constitutionally impossible).

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These ideas – so slight, so silly and so distracting – are a sign of intellectual exhaustion. Even Liberals know that, if they want to reconnect with the "soul" of Canada, as one party stalwart put it, they'll have to come up with something better.

But maybe you can't blame them too much. The progressive left is floundering everywhere. Their best ideas are used up. The postwar institutions they worked so successfully to build are in big trouble. And they have no idea what to do about it.

As Francis Fukuyama writes in a powerful new essay, The Future of History, "it has been several decades since anyone on the left has been able to articulate, first, a coherent analysis of what happens to the structure of advanced societies as they undergo economic change and, second, a realistic agenda that has any hope of protecting a middle-class society."

The liberal democracies are at the end of the welfare-state road, and all of them are looking for a map. Their aging demographics mean that entitlement spending is exploding just as economic growth has slowed dramatically. Raising taxes on the rich won't solve this problem.

Meantime, our barnacle-encrusted public institutions have shown they are too expensive, too unresponsive, too inflexible and too captive to their own interest groups to deliver services in effective and efficient ways. Both health care and public education are weighed down by excessive bureaucracy, lack of competition and rule-bound work practices that belong to the age of the medieval guilds.

Fixing the public sector will be among the top priorities of governments for the next generation. But as Mr. Fukuyama points out, the mainstream left remains obsessed with defending the status quo. "Thus, when existing social democratic parties come to power, they no longer aspire to be more than custodians of a welfare state that was created decades ago." The Liberals also need to stop assuming that most Canadians trust and respect the wisdom of government as much as they do. Hint: They don't.

The trouble with the Liberals is, they know what they're against (anything attached to Stephen Harper) but have no idea what they're for. Although the age of ever-expanding entitlements is at an end, they can't help themselves from thinking up some more. The worst part is that, despite their accusations that Mr. Harper is a dangerous right-wing radical, on most substantive matters (such as fiscal policy, immigration policy and free trade), they basically agree.

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The deeper question posed by Mr. Fukuyama is whether liberal democracy can survive the decline of the middle class. Hardly anyone predicted that technology and globalization would have such dramatically disparate effects – enriching some people, while dislocating so many others. It's these factors, rather than greedy Wall Street robber-bankers, that are driving the growth in inequality.

How might society mitigate these flaws in capitalism in ways that are politically acceptable? Perhaps the Liberals could get around to thinking about this one of these days. I'd like them to prove my cynical friend wrong. I'd like the Tories not to be the only game in town.

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