Has Edinburgh lost its edge? Has the Fringe become the mainstream? Stewart Lee thinks so. The comedians' comedian began his run at the world's largest arts festival this year in characteristically cheery style, by bemoaning its homogeneity, loss of spirit and transformation into a "Chipping Norton of the arts, its sluices greased by Foster's lager".
While garish lager branding and "As seen on Mock the Week" poster flashes are now as unavoidable at the Fringe as unfeasibly chirpy people handing out flyers, giant puddles and face-painted loons re-enacting Marat/Sade on the Royal Mile, you still don't have to veer very far from the well-beaten path between Bristo Square and the Pleasance to find cheering examples of the traditional questing spirit. This is one of the world's most eccentric democracies after all – a community of 20,000 performers with no artistic director and just one rule: to accommodate anyone with a story to tell and a venue willing to host them.
So, for every overpriced "work-in-progress" show by a big-name television comedian – Michael McIntyre, Harry Hill, Reginald D Hunter and Alan Davies have all jetted in with unfinished money-spinners this year, not to mention others (Rhod Gilbert and, yes, Stewart Lee) who are taking advantage of the global cluster of comedy fans to stop off here with shows they have been touring for months – it is still the living, breathing works in progress of fresh talents that make Edinburgh tick and buzz.
Nor does that progress stop on the first night of the month-long marathon. Throughout August, new ideas, shows and collaborations bloom daily. Where else could you start the day with a play about the Olympics, written the night before and performed script-in-hand over breakfast bacon butties in a theatre bar, and finish it at a late-night comedy gig where Josie Long, Susan Calman and friends don neon balaclavas to form their own tribute band to the arrested Russian protest singers Pussy Riot?
This year, one year on from the riots, comedians and theatre-makers alike have answered the call to comment on the state of the nation. Stand-ups are tackling everything from the super-rich and gay marriage to the pleasures of activism and the politics of pole-dancing. There are plays about civic unrest, satires on the coalition, verbatim dramas on the BP oil spill and silent comedies about the election. There are one-man shows about illegal raves and Thatcherism and one-woman shows setting George Osborne's Budget speech to death metal. Yes, really.
The theatre programme alone is the most nakedly politicised in many years. The riots in particular have inspired a smash-and-grab among opportunistic playwrights, from verbatim tracts straight out of Tottenham to modern-day dystopian fairytales called Peter Panic. Not all of them are good. I'm not sure that Shopping Centre, an overwrought monologue from a paranoid loner in combat gear who lives in a bunker beneath his local mall and spends his days dreaming up sexual fantasies involving pricey leather sofas and David Cameron, added much value to the debate around Broken Britain.
Better are the weekly Theatre Uncut sessions at the Traverse in which international playwrights tackle austerity in 10 minutes flat, from Neil LaBute's generation-gap drama about the Occupy protests to Lena Kitsopoulou's surreal take on the Greek bailout which imagines a supermarket where everything – from baked beans to babies – has a price. The Traverse's main draw this year is a double bill of Scottish political plays – David Greig's The Letter of Last Resort about a female Prime Minister grappling with the protocol of nuclear attack is paired with David Harrower's Good with People, which roams from Helensburgh in West Scotland, home of the nation's nuclear defence programme, to the Middle East. Nuclear power rears its ugly head, too in Coalition, a pleasant, Radio 4-style satire which imagines the death throes of the current government, and in particular, of the Lib Dem leader who sells his CND badge for the price of, well, not very much power at all.
The most memorable and engaging works, though, aren't those set in the corridors of power but those which roam the alleyways of youth culture, written by those who know it best. Chapel Street by Luke Barnes, 24, is a wry two-hander about Binge Britain and disaffected youth in which a young boy and girl deaden their ambitions with cider and shots, drinking to alleviate their boredom, "to make the moment worth living". Beats, on the other hand, by the rising star Kieran Hurley, 26, is a techno-fuelled one-man rave, the gritty monologue of a 15-year old at his first illegal gathering which posits the free party movement as an uplifting alternative to individualist, capitalist society.
Teenagers are making their voices heard, too. Many will identify with the angst and delicate black humour of Caroline Horton's Mess, a play about anorexia while Simon Stephens' Morning, devised with the Lyric Hammersmith's Young Company, is a troubling tale of adolescent violence which ends on the bleak note: "Everybody wants hope shining through the darkness and there isn't any. And we could take to the streets but it won't change anything. We could form a protest movement and it won't change anything." All That is Wrong picks up on the theme of futility as a pale and anxious 18-year-old girl silently chalks up a demented Scrabble web of her fears – from Goldman Sachs and the Batman shootings to Syria – on a black stage.
If further proof were needed that 2012 is the year that the Fringe got serious, take a look at the fastest-growing genre in the programme – the lecture. Perhaps it's a response to rising tuition fees but there are an awful lot of performers this year who want to spend their hour teaching us something, whether it's a look at the Virgin Mary's place in art history, a spoken-word tour of the concentration camp at Dachau or an exposé of working conditions at Apple Inc.
Steve Richards capitalises on the current appetite for stand-up with a cerebral punchline with his Rock'*'Roll Politics show, which offers insights into the workings of Westminster, gossip and impressions from the lobby and lively debate every day before lunch. His contention is that "satire is dead", that it's no longer enough simply to poke fun at Prezza's malapropisms; politicians need to be held to account, seriously, and not by high-profile celebrity comedians who earn more than their targets. On the day I saw it, the audience members were more fired-up than most stand-up crowds, shooting off questions about Scottish independence, celebrity MPs and mistrust of the media.
On the latter, Richard Peppiatt's One Rogue Reporter offers a timely, lively, if probably litigious, perspective. The young ex-Daily Star reporter resigned by writing an open letter to The Guardian in which he criticised the working practices of his employers. Now he is twisting the knife with an inside view on life before Leveson. In a series of video clips he shows himself pulling audacious Trigger Happy-style stunts on red-top editors, turning the tables on them to hammer home points about privacy and the paparazzi. It's less stand-up, more a demolition job with jokes, but the sell-out crowd lapped it up, proving that nothing unites a room like a common enemy, especially when that common enemy is the British press.
Even economics is packing in the crowds. In Man 1 Bank O, Patrick Combs tells the extraordinary true story of how, in 1995, he deposited a junk mail cheque for $95,093.35 in his bank for a joke – and it cleared. The San Franciscan Mick Jagger lookalike tells his David and Goliath story with hyperactive zeal, as if for the first time. "Any time we make a mistake, they stick it to us. It's time to stick it to banks, man," he shouts to whoops and hollers from the crowd, like an anti-banking Messiah.
The Price of Everything, written and performed by Daniel Bye, is the best of the bunch, a thought-provoking hour of storytelling and stand-up around the idea of value. How much is the human body worth? What would people pay for an air guitar, or an imaginary friend, on eBay? What would you do if you were given £20 and asked to perform a random act of kindness? Pouring every ticket-holder a glass of milk, Bye informs us that the arts cost each UK taxpayer the equivalent in value, 17p, a week; in return they generate 35p. So is this show worth the ticket price? A resounding yes.
As for comedy, both Josie Long and Andrew Maxwell are back with strong political surveys this year. Long, still frustrated by "obvious baddies" (the Coalition government, the super-wealthy) and the dismantling of public services, sets the left's lack of progress against her own milestone of turning 30. Maxwell's approach is a little more aggressive, taking on everything from Alex Salmond ("the jowly charlatan") to the "massive £10bn sports day" of the Olympics and even the cowardice of the BBC, who have just given him his own series. Both shows are like being in the pub with your wittiest, angriest and best-informed friend for an hour.
Elsewhere, Mark Watson makes cerebral, if scatty, points about digital overload in The Information, asking the audience to tweet and text him throughout in order to "interact" with them instantly. "We used know stuff, now we look it up on Google", he says sadly, before showing off his knowledge of times table and capital cities. And Nish Kumar peppers his accomplished debut with intelligent observations on life as a British Asian. He talks about racism, his (failed) attempts to "reclaim" the word Paki, and offers his own take on the "coconut" jibe recently levelled at the footballer Ashley Cole for being "black on the outside and white on the inside". Kumar has no time for such ignorant distinctions, labelling those who have accused him of the same crime "Easter eggs", or "brown on the outside, completely empty on the inside".
The stand-up shows that have really got people talking are the ones that come with a clear message attached. Susan Calman's This Lady's Not For Turning Either is the charming tale of her journey to a civil partnership last year – from growing up gay in Glasgow ("like being a vegan in an abattoir"), coming out and shopping for her wedding list with her mother. It ends with an impassioned plea to her audience to support gay marriage. "All I want is to get married to someone I love", she says, revealing that she has already received hate mail about the show. Trevor Noah, already a superstar in his native South Africa and lauded on Jay Leno's Tonight Show in America, makes his debut at the Fringe courtesy of Eddie Izzard who spotted him while travelling. The Racist is a softly spoken world tour of stereotypes and meditation on the human desire to belong. By far the strongest material comes from Noah's own life story. "Born a crime" under apartheid to a black mother and a white father, he recalls having to walk on the opposite side of the street to his father and how his mother would drop his hand "like a bag of weed" if she spotted a policeman.
Over on the Free Fringe, Chris Coltrane's Activism is Fun, directed by Josie Long, is a Pollyanna-ish hour of "protest stories to inspire and delight". Political activism doesn't have to be all grim marches and petitions says the UK Uncut man whose own direct actions range from a sit-in at Vodafone to turning a branch of Barclays into a comedy club. His aims for this show are simple, he tells us: "to smash austerity and beat the Tories". He doesn't quite manage that but it's an admirable attempt.
More free Fringe spirit can be found at Hunt and Darton, a pop-up café/art installation in an abandoned shop just off the Royal Mile, offering fondant fancies among vintage furniture. Forest Fringe launched their Paper Stages book here last weekend, leading audiences to a secret late-night performance of Torycore, Lucy Ellison's eardrum-tearing monologue in which George Osborne's budget speech is performed as a death metal rant. Copies of the book, containing Edinburgh-based activities created by 20 artists, are available at the café for the price of an hour of your time. There's a menu of tasks on the wall for volunteers to choose from – do the washing-up, make a café playlist on Spotify, bake some crispy cakes, even.
So there you have it, the Edinburgh Fringe's own inimitably odd and subversive take on the Big Society. And not a pint of Foster's in sight.