Only the incomparable house journalist of The Poppletonian can capture the farcical combination of phoney science, flat obduracy and lethal money-grubbing that now passes for the language of academic policy. Even Laurie Taylor's satire is, however, impotent before the facts of political life. For David Willetts, the universities and science minister, himself put parody in the shade with a gobbling and hapless effusion, which culminated in the complacent declaration to the London Review of Books in July: "I plead guilty to believing in choice and competition."

"Pleading guilty" like this is a familiar piece of class diction with which to dismiss subordinate insistence that one should fashion a rational argument. For what would happen if the choices made by half a million 16-year-olds for their preferred A levels led to the evisceration of, say, all engineering departments?

And what does it mean to claim that the universities of Cumbria and Gloucestershire - both in by no means trivial difficulties as to cash - are in "competition" with the London School of Economics, whose director resigned earlier this year because of the institution's unfortunate propinquity to the chequebooks of the Gaddafi family?

What is at stake in the present climate of waste and incompetence under which universities still labour to cherish and recreate the best aspects of our civilisation - and it is still ours, all of us together, including millions of citizens indifferent to all that universities do and stand for - is the language of moral and political thought. The official speech used for the discussion of what universities are for is one in which it is impossible to tell the truth. There again, truthfulness is in scant supply in daily political life.

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If, however, truth and truthfulness - and the slow and patient definition of the changeful conditions for establishing each - are not central to the idea of the university, then we have indeed handed over meaning and livelihood to the gangsters of propaganda and their hirelings in advertising.

This is no mere abuse. One of the most painful injuries inflicted on any sensitive and intelligent person on becoming head of department is the lowering language that has then to fill your mouth, with the dreadful polysyllabic phrases that, once swallowed, prove immediately emetic. All that "prioritising", "operational implications", "outcome indicators", "impact beneficiaries", "incremental significance" and "levels of robustness" (a list compiled by Adrian Poole, chair of the English faculty at the University of Cambridge) can only cause abrupt and reverse peristalsis in anybody whose job it is to feel the force of Keats' remark that "English must be kept up."

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We ignore the monstrosity of managerial vocabulary too easily. It has to be fought, put down, criticised for what it is: a perversion of human exchange, a calculated muffling of the hard, deliberate compulsions of ruthless and authoritarian models of how things must be.

Such is the moral and linguistic context in which we must place the Browne Report and the ÖйúAƬ White Paper.

In both documents, the authors' beliefs were set out with the indifferent finality that accompanies unshakeable absolutism. The first omnipotent such belief - that "competition improves quality" - could be invoked so baldly because of the absolute presupposition made by the government and its hirelings that the undifferentiated, irresistible force of "business" is all-powerful and that its requirements dictate the limits and direction of the universities' distinctive products, research and graduates, whose only function is to benefit the "economy" - a term left, as usual, in unexampled opacity.

Of course, incredulous revulsion and hysterical laughter are useless against the march of the morons, among whose number are the enemies within: the toadying vice-chancellor straining for a knighthood; the administrator "quislings" bravely named as such by Richard Drayton, and the managerialist undead presently dancing on spreadsheets before arranging redundancies for junior staff paid a sixth of their own salaries.

These creatures must be our immediate targets. Unlike the leaders of the medical profession and the solidarity of its half-million-strong staff, the pro vice-chancellors and their ludicrously overpaid senior staff are to a monstrous degree complicit in the muffled mendacities and self-serving mutilations of the new policies. If the national debt is throttling university finances to the degree that we are told, quite a tidy sum towards the total could be raised by lopping an easy 20 per cent off the salaries of vice- and pro vice-chancellors and a few of their greedier coevals.

The changes being hurried through - unimpeded by a docile and nerveless workforce - demand of us (whoever "we" are) something tougher and harder, as well as more comprehensively argued and collectively fought out, than name-calling (a relief though it is). This is because the White Paper summarises a new order. It will create a rigged market in ÖйúAƬ, one that will confer and confirm privilege among the privileged, riches upon the rich, and ensure the complete control of demand and supply of students and research.

The word "crisis" has been printed in bold and declared on our screens so often that no one now pays much attention to its latest advent. Politics itself - that is, the everyday conduct of government - is critically ill, and the best we can hope for is responsible government. That we do not have it is my occasion for asking what is happening to our country - to most countries, in fact, certainly the US and to all in the European Union.

I suggest that our epoch is tearing itself away from the narratives that have bestowed meaning and continuity upon the northern hemisphere since 1945, and lost reason in 1989 at the end of the Cold War. What is dying is plain enough; but what rough beast, its hour come at last, slouches towards us to be born remains unimaginable.

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The death is of a world economic order and therefore the social system it subtends. At the same time, the whole of public policy remains an attempt to reconstitute an economics that has reached its end. There is then a double inevitability: that the old order - still mortally wounded by the unhealed devastation of the heavy old manufacturing industries of the North of England, now shockingly divided between vast and irresponsible wealth crammed into comparatively few wallets and the helpless nihilism of the underclass - will fight blindly and ruthlessly to resurrect what is dead. It will move deeper and deeper through crisis after crisis in a doomed attempt to regain a familiar world. The double inevitability is that these efforts will fail and that nothing else will be tried until there is some sort of agreement about the revolutionary reach of the transformation required. Such recognition is a long way off.

Capitalism has been characterised throughout its 600-year history by what economist-geographer David Harvey calls "switching crises". Each capitalist order, more or less nationally rooted, drives production and expansion to a limit at which it accumulates more capital than its trade can absorb or its production can find consumers numerous enough to ensure returns. When over-accumulated capital fails to keep up the payments, it switches to a new centre, promoting a new surge of growth, racing into the markets perforce abandoned by its old rival.

The switching crises that Harvey locates take place at the systemic centres of the time. Too much capital piles up in places or practices through which it cannot make its anticipated profits. Homeless capital roams around, seeking whom it may devour, made visible in unemployment facts and figures, empty high-street shops, static stock on the shelves and in the warehouses, money lying inert in banks and firms bankrupted for want of access to liquid cash.

Capitalists, with their ferocious energy, created out of nothing a new resource that, it was hoped, would eradicate these passages of devaluation. That creation was credit, "fictitious capital" as Marx called it in the third volume of Das Kapital (1894).

Credit is trust in action. The function of credit is to hold the balance between production and consumption. A crisis begins in a failure that damages trust in the fictitious forms of capital; thus the downfall of Lehman Brothers, AIG, Northern Rock, Royal Bank of Scotland.

Trust is always a delicate plant. For markets to work, producers must also be sufficient consumers; wages, that is, must leave enough spare for retail therapy in the shopping mall. Yet for the past 40 years, wages across the US and the EU have been held down so thoroughly as to cause consumption to fall to crippling levels, had not fictitious capital been summoned by plastic cards to fill the gap.

The story of the "bubble" has been enacted many times since the South Sea Bubble of July 1720. If the bursting bubble is big enough, it presages a switching crisis, which is the drastic transposition of the dominant centre of capitalist accumulation from one location to another. Today, that centre is shifting from the US to China.

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The cause of the recent rupture - as everybody now knows - was the over-accumulated capital sitting expectantly in land values quite unrelated to production. The credit system (one of the more flagrant tricks of late anglophone capitalism has been to relabel debt as credit) was trusted to hold the balance between production and consumption, in particular with regard to the construction industry. But more buildings had been built than could be sold, more mortgage debt had been handed out than could be paid for by wages. Money lay unprofitably on the building site, dead to accumulation.

And thus the collapse of 2008 ensued. As is the human way, everyone assured everyone else that it was a recession, that it would be over in two or three or four years and the good times would return. But for 25 years of outsourcing and outreaching (as we've all learned to say), world wages have been, notoriously, held down at exploitative levels, so that exactly those people required by the system to spend and consume their way to paradise don't have the surplus with which to do so. The sole weapon in their hands with which to lever up pay levels - the strike - was taken away by legislation, expendable assets such as North Sea oil in the UK underwrote the costs of mass unemployment and fictitious capital did the rest until the collapse.

Now the question is: who will have to endure most in the process not of devaluation but of a permanent, steep fall in living standards?

Of course, there have been plenty of similar occasions for disappointment in the past. This time, however, the despondency will be permanent and expectations will have to be devised out of materials other than modest pay rises, well-stocked homes and the lives of more prosperous children. Such circumstances are already plain to see and are accompanied by the usual filthy uproar from new and horrible political parties, the excrescence of bloodthirsty racism and the shop windows of the customless poor being smashed by the criminalised poor.

This being so, it is the height of hubristic insanity to launch, as the present government has, upon a vast venture to demolish the state and many of its institutions that provide such needful protection for the people against the storms that are battering their country. It is the duty of a government of any colour to do everything possible to repair the damages of history and to salve the open wounds of forced migration, miserable poverty, helpless unemployment and wasted lives.

Our ministers speak of the "national interest", but the nation is interested in the personal safety of its jobs, its homes, its children. One cannot escape the conclusion that the present crisis is being deepened and rendered insoluble by mere ideological convictions on the part of politicians with an utter disregard for those shocking extensions of social inequality that disfigure our polity. (This is despite the sheer inefficiency of steep inequality as a structural constant in modern society.)

The super-rich are left unmolested by cuts, by the sack or by abrupt reductions in their pay. Their private health insurance, the fees falling due for their children's private education, their electronic gates closed at the bottom of the drive against the anger and misery on the other side are all untouched and untouchable. The immediate crisis has been transformed by sheer and arrogant effrontery from a crisis of fictitious finance into a crisis of the state. Our coalition government could have allowed slow economic recovery to help balance the books by rises in tax revenue; it could have charged the banks a much heavier windfall tax than the trivial sum proposed; simplest of all, it could have raised income tax on a progressive scale and knocked a wallop off VAT. But it is traducing its duty to act in the much-invoked "national interest".

To repeat: its duty is, so far as lies within a government's powers, carefully and slowly to bring under control the economic storms that have beset the little world of its own country, to mitigate the fearful dangers of global politics as they press upon the nation and to protect its own best principles in such a way as to endorse a future that settles people and gives them work. The measure of good government is that it always act in the light of the best values it can imagine in the present and on behalf of the future.

There is presently, however, no common agreement on a historical narrative that could give those values concrete actuality and motion. So there impends, indeed has arrived, a drastic tear - a hiatus - in the continuing tapestry of time. History itself is at a pause, as the dominant sources of its energy, which at present are the armies of trade and production, look for meaning and direction.

It is the purpose and function of the university to propose such meanings and interpretations of history as will offer bearings as to the moral direction of a society. "The best that has been thought and said" - and done and made, the best that we can do for ourselves, our country and, where possible, the world - these things are the subjects and objects of our livelihood and our vocation. The ordinary conversation of our culture still yields confident judgements as to the good, the true and the beautiful, each viewed as essential components of domestic and, dammit, political life. We name, with justification, certain lives as good lives, certain objects as beautiful, and could not move through the crowded world without determining the truth about things and the truthfulness of others in reporting them.

Any undergraduate course, whether in, say, physics, literature, nursing care or sports science, retains implicit and explicit reference to the public duty of the discipline, to that corner of the good society in which the principles and content of the discipline may flourish.

But there looms over us a hateful new ideology that may be called "technicism", which justifies an absolute severance between the knower and the known. This deep cultural tendency is at the heart of the threat to the meaning and purpose of the university. The result is that the principles of the market and its managers more and more deeply suffuse the practices of education. Market relevance is the key criterion for the selection of intellectual discourse. Knowledge is divorced from people, their allegiance to value, their life commitments. Knowledge, as Pierre Bourdieu told us years ago, has become capital. The centuries-old and valid tradition that taught the inwardness of knowledge, its pertinence to the deep structure of the self, the defining relation of one's discipline to one's self, is being thinned out to the point of fracture.

The primary importance of universities to the good society is that they hold and renew the bond between the individual and the strictly impersonal life allegiances and principles that give the personal life mass and energy.

For example, a conscientious teacher of nurses might not put things in such exalted diction, but he or she would certainly intend that their best students be sufficiently inspired by their studies to transform their new knowledge into energy and resourcefulness. And through this transformation they would so enlarge the debauched concept of "training" that - discovering in the study the "courage of enormous incompleteness" - each would find the determination to draft a working map of nursing knowledge, enough to feed both judgement and wisdom even when faced with a sickness unto death.

For a future civilisation - which is certain to comprise a new economics with China and India in charge, a natural world heading out of control, the likelihood of barbarism implicit in both phenomena, and our trusty old weapons of hope and resilience - for the moment, the university remains at once court of appeal, workshop of restoration, theorist of novelty and custodian of the good.

To keep it that way, university teachers will need to cultivate a hardness and bitterness that sit unhappily with their easy-going assumptions about the world, and the supposition that - whatever the clowns in government do - they will more or less manage to play the system.

If a passably good society is to be created under very stormy-looking skies, universities will need, at least, a lively commando of tough and intransigent thinkers. It is a fact that post-Cold War politics have failed. A whole generation - mine, as it happens - is rotten with failure. The enemies of the good society are powerful, and can be faced down only by arguments and actions designed for victory.

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The amiable passivity of the academic life must be abruptly shaken off. The philistines are upon us, they are in the Senate House itself, and it is well past the time for rewriting the ludicrous research excellence framework (the very phrase an affront to our vocation). What is needed is a vehement call to scholarship of a more cutting, angry and indomitable style.