Bruce Anderson: Social breakdown is a threat to our quality of life which we ignore at our peril

If the City barrow boys turned bond-dealers are Thatcher's children, so is the underclass

The symptoms of a broken society are all around us. Over a million British youngsters are neither in education nor a job. The incidence of knife-crime has doubled in two years. New victims fall prey to the feral young on an almost daily basis. Even if they do not necessarily host homicides, many public spaces are steadily growing scruffier and dirtier. They look as if there should be a sign: "Decent people keep out."

Yet we are a rich country. Private affluence is rivalled by record levels of public spending. There is no excuse for deficient public provision. But it often seems as if the right motto for Modern Britain would be: "Nothing works."

Other societies seem vastly better than we are at avoiding social disintegration. The Palio in Siena is a cross between a medieval pageant and the Grand National. During the weeks before the festival, the town's young rehearse their roles. On the day, they march in procession, and in medieval costume, behind the banners of their contrade (parish). But the spectacle ends in a climax: a horse race around the cobbles of the Piazza del Campo . This generates huge excitement. When I watched it, on temporary scaffolding outside a restaurant, I feared that the shaky structure might collapse, such was the commotion.

The jockeys come from Sicily. There are annual allegations of old Sicilian practices. The favourite never seems to win. At the end of the race, anger spills over, often into scuffling. When I was there, a few hundred young men squared up to each other. But calm was quickly restored. I did not see a single punch thrown. Numbers apart, it was no worse than the average on-pitch confrontation in a rugger international.

In the evening after the Palio, Siena is replete with banqueting. By 11pm or so, apart from the ones on waiting duty, the entire young male population is flown with wine. But if you were taking the air or finishing your own dinner at an outside table, the worst you would have to fear is a raucous cry of "Va bene", an arm around your shoulder, and the offer of a swig from your new friend's wine bottle. How different from the home life of our own dear young.

Those tempted to sneer at the absurdity of comparing Siena with modern Britain ought to pause. Social breakdown is no more fore-ordained than economic breakdown. Thirty years ago, it would have seemed silly to suggest that Britain's economic performance could ever rival Germany's. Although social breakdown may be harder to correct, that is not an argument for despair, but for redoubled efforts.

There are two principal diagnoses of Britain's social ills. To the Left, it is all Mrs Thatcher's fault. Proclaiming that there was no such thing as society and insisting that nothing counted except the cash nexus, she made war on the working class and its communities. If the City barrow-boys turned bond-dealers are Thatcher's children, so is the underclass. We will never solve the problem without repairing the damage to the national ethos which Thatcherism caused.

The Right believe that the problems stem from the breakdown of discipline. From the Sixties onwards, in pursuit of the permissive society, there has been a steady erosion of authority. Policemen, parents and teachers have all come under attack. As a result, many of them have lost their nerve and some have actually defected to the Liberal enemy. These difficulties have been compounded by immigrants. At a moment when Britain appeared to have lost its self-confidence, we admitted large numbers of people who neither shared our values nor cared anything for our history and traditions. Yet all is not lost. Look at the Armed Forces. Their performance proves that if properly led and disciplined, the British young are as good as ever.

It is easy to adjudicate between the two opposed positions. Both are largely true, as far as they go, which is not very far. Neither offers a solution, though both implicitly recognise the core of the problem and the reason why English youngsters are so different from Siennese ones. Most of them are brought up in stable families.

It is true that the economic changes associated with Thatcherism have exacerbated social problems. But this was not the Lady's intention, nor was there much that she could have done about it. Thatcherism merely accelerated the move from status to contract which is basic to modern economic life. In traditional societies, social standing was influenced by a range of factors, including age. In a globalised economy, so much depends on earning capacity, which depends in turn on the added value that an employer can extract. In such contracts, age does not confer status or inspire deference.

Thatcherism had another unfortunate consequence. It destroyed a large number of jobs which were suitable for unskilled men and which gave them a chance to express their male prowess. That said, we should beware of romanticising the way of life associated with heavy industry and manual labour. For much of the time, it was grindingly hard. Moreover, it was inevitable that those jobs should disappear to the Third World, where the workforce is so much cheaper. The problem did not arise from the loss of the old jobs, but from appalling educational standards which mean that many school-leavers are only fit to do work which is no longer available.

If Mrs Thatcher had not acted so decisively, the pace of change would have been slower. But the pressures of globalisation would always have driven British society towards the Anglo-Saxon model, just as they are now driving the French. Equally, if Mrs Thatcher's predecessors had been willing and able to introduce economic reform, the drastic measures of the Thatcher years would not have been so necessary.

But the main problem is not economic. The decline of the family is the greatest cause of our social discontents. That was already well underway by 1979.

Around the beginning of the Thatcher era, I was in a supermarket. A haggard, harassed mother, looking 35, probably about 19, was trying to control her offspring. "Put that fucking thing down, Wayne, or I'll belt yer. Trace, I've said no. Another word out of you and you'll get a thick ear."

A depressing spectacle. I described it to an acquaintance, who happened to be a sensible social worker: not quite an oxymoron. "Yes," he said, "We call them gits." "Gits?" "Grandmothers in their thirties."

That girl probably is a grandmother by now, grumbling about the trouble it takes to visit Wayne in prison, and worried about Trace, who has three kids by different fathers and who lives on the 12th urine-stained floor of a tower block. It is hard to believe that the gits and the Palio young come from the same species.

In 1979, the British way of life was under threat from economic failure. In 2007, social failure is the greatest threat to our quality of life. It ought therefore to be the major preoccupation of government, and of all concerned citizens, for many years to come.