The British left is finally turning against the EU

In 1874, Karl Marx had an imaginary conversation with Mikhail Bakunin. Nowadays, they would just have had a Twitter spat, but back then the father of Communism was forced to spend an afternoon copying out bits of the anarchist philosopher's book into a notepad and then writing out his counter-arguments.

Bakunin's book was itself asking questions about exactly what this 'dictatorship of the proletariat' Marx had proposed entailed. "Will the entire proletariat perhaps stand at the head of the government?" he asked rhetorically. "The Germans number around forty million. Will for example all forty million be member of the government?"

Marx replied, again rhetorically:

"In a trade union, for example, does the whole union form its executive committee?"

It was a telling response. For Marx, the fact a trade union executive committee was composed of members of the same class meant it would always represent their interests. The only power for Marx was economic. Once you made everyone economically equal, we were all equal in every way, even if some of us were on the executive committee.

Of course, anyone who watched the breakdown of trust between trade union executive committees and their members in the seventies and eighties will have realised what Marx got wrong. And certainly anyone growing up in the Soviet Union will know that power is not merely economic. Once you get a group of people and tell them they are the leaders, they start to consider themselves a class in themselves. There are plenty of power structures outside of economics, like access to information, or etiquette, or ethnicity. The list is endless, because humans are infinitely complex. Marx's simplification of power to pure economics meant that all attempts to enact Communism resulted in highly centralised dictatorships. 

Anarcho-communists wave a flag during student protests in Millbank, but most of Bakunin's criticisms of Marx have been forgotten

All of which offers a useful guide for what has happened in Greece. The troika are fighting for capitalism, not communism, but they typify how centralised power behaves. This is what leaders do when they have no investment in, or contact with, the places they rule.

Despite the overwhelming democratic mandate from the Greek people for renegotiation, the troika refused to budge. They would not allow Greece to delay its repayments so the economy had time to recover. They would not forgive any of the debt. Both of these moves would have actually improved the ability of Greece to make the repayments, but they would also have encouraged other populist left-wing movements like Syriza. So it was intolerable. The pensioners and workers of Greece had to suffer in order to send a message to their counterparts in Spain. This is the classic behaviour of the dictator, who is not accountable to the people he rules over.

The troika demanded reforms of Greece's economy – and for good reason. Tax dodging is endemic in Greek society and despite the easy refrain of many left-wing commentators that the Greek people are paying for a crisis they did not cause, it is endemic at the bottom as well as the top. But it just so happened – who'd have thought? – that spreadsheet-touting eurocrats were not best placed to reform a society of which they had no experience. Centralised power is not just immoral – it is also inefficient. It does not have experience of, and therefore cannot understand, the things it wishes to govern.

The disastrous political mismanagement which brought Greece to its referendum today was not just a failure of strategy. It was a failure stamped into the DNA of centralisation projects. And that, above all else, is what the EU and the eurozone entail: a massive centralisation of power, away from local communities, away from national parliaments, and away even from the European parliament, to a host of unelected financial mechanisms responding to the whims of its strongest members.

For the right, this project was never tolerable because it entailed foreign interference with national parliaments. Laughably, they also misinterpreted the function of the EU as one of interfering with the market. There are rules here and there but actually it operates in the opposite direction, as this last week must finally have made clear.

Does the idealism of the euro project mask a centralisation of power?

The left has for years failed to assess power properly. The failure to critique centralisation wasn't just theoretical – it was practical. If you centralise power, this is how people behave. The troika's interference comes without any experience of the thing they are trying to change. They are willing to punish people they will never meet in order to satisfy their political priorities.

We urgently need to shift power downwards, not upwards. It should come back from Brussels, not to Westminster but to local communities. It should not even be directed to local councils but as far as possible to individual public services, giving people control over their local hospital and prison and school. That's when the best decisions are made – when they are made as far as possible by those who are affected by them.

Farage is loved by many, but his brand of right-wing euroscepticism has made many left-wingers instinctively supportive of the project

Today's referendum reflects how Syriza has started to re-introduce the notion of participatory democracy to Europe. The question of who is on the executive committee becomes less important when the public actively makes the decisions which affect it. Bakunin would have heartily approved. Marx would have been as baffled as the eurozone finance ministers who've spluttered with outrage since Alexis Tsipras announced the referendum.

This week has finally seen this lesson start to be internalised by the left. It has done more to further the eurosceptic cause than anything Ukip has ever done. The debate has shifted from the right-wing critique of Europe – immigration, market interference – to the left-wing one, which is of German fiscal extremism applied to powerless local communities.

Right-wing euroscepticism needs no encouragement. The shrill little Englander hysteria of the right has done a lot to prevent left-wingers recognising the dangers of the European project. They see the Farages of the world and instinctively adopt the other position. Quite apart from economics, this was a failure of vision. The left listened to Marx much more than it ever did to Bakunin. It was unable to recognise how the structure of power would affect the way that power is used. 

But this week has revealed a Europe of centralised, isolated, unelected elites making decisions for people they will never meet and to whom they are not accountable. That's the reality of the EU project and for the first time in a long time the left is starting to recognise it.