New Labour has something worse than a dilemma: it has a trilemma. The word comes from David Miliband, former head of Tony Blair's policy unit, now an education minister, and the theme ran through last weekend's seminar with US Democrats and some European socialists.
The trilemma is this. First, Labour has embraced capitalism with enthusiasm and flair. Second, economic growth has allowed it to increase spending on public services though not to change relative rankings among the population: all ships may have risen on new Labour's incoming tide, but the rowing boats are as far away from the luxury yachts as ever.
But third, new Labour intended to be socially liberal. The patrician liberal Roy Jenkins's vision of "cultural diversity in an atmosphere of mutual tolerance" would, it hoped, come to pass everywhere.
It is coming to pass, but not everywhere. Part of Labour's heartland vote now sees the party as too socially liberal. These people see themselves as British or English, not European; and they no longer care to understand politics, because they do not think politicians care to understand them.
Many are young men: in or out of work, they think of themselves as lost, or beyond the pale. Philip Gould, Labour's pollster, thinks they will drive what he calls post-socialist populism: the rise of a politics that is neither conventionally right nor left, but which empathises with alienation, legitimises feelings of being overrun and conjures up visions of lost community.
The far left sees it as ideological deviation - the work of fascists or racists which must be opposed, root and branch, as original sin. New Labour sees it as an expression of the problems of a malleable humanity, to which politics can have an answer. But the need for an answer is urgent: across Europe, a progressive feast has turned to famine.
The "legitimate" right threatens to invade the space the centre left thought it had made its own, while far-right parties have made breakthroughs at different times and of different kinds - from the "classic" anti-immigrant, anti-Semitic, semi-violent racism of France's Front National to the liberalism of the late Pim Fortuyn's party, which claims to fear immigrant threats to liberal values.
The far right is taking a share of power in coalitions, where it ties in the working class by agitation for, and achievement of, measures to limit immigration, to distance the state from EU projects (especially eastward expansion) and to give at least rhetorical expression to nationalism.
The centre left had thought that, by capturing the centre, it had solved an electoral problem for perhaps a generation. It reckoned, rightly, that the working class had no alternative on the left. It reckoned without an alternative on the far right.
How will new Labour recover its position? It will pull back from a multiculturalism that seems indifferent to new citizens' responsibilities to their adopted country, and insouciant about whether or not they adopt civic norms. It will make clear the reciprocal duties and attitudes of citizenship. It will propose more active involvement in, and aid to, the desperate countries from which people flee.
The alternative, it believes, is to abandon ground to those whose liberalism is much more suspect, and whose desire to win back and retain power is more ruthless than is Labour's own.