In Brixton they burned her image and in Belgravia they bowed down before it. And in between was every possible strand of dislike or adulation. But one thing both Margaret Thatcher's admirers and detractors seemed united on was that she created, for good or ill, the world we now live in. The right, doing what the right does best – slashing public services and cutting taxes for the rich and corporations – triumphantly asserts it. While a battered left makes up in indignation for its lack of an alternative narrative. But is it actually true?

There's no doubt she is the dominant political figure of the past 30 years. But if we stand back and take a longer view, how fares her Hayekian vision of a residual state and privatised society?

Looking around what do we find? Threatened by privatisation as it is, we still have a National Health Service, paid for out of taxation, treating millions of people every week, without charge or worry to its patients.

Despite the encroachments of free schools and academies, the state education system still educates, for free, 93% of our children and young people, and the leaving age is about to rise to 18. Over 40% of young people go on to a state-supported university. By historic standards this is astounding, even if we are falling behind by international standards.

And blasted as the benefits system is, it remains substantially in place – much to the chagrin of the Tory right – with the biggest component of the system, pensions, escaping relatively unscathed by cuts. Around 60% of families still receive some form of state benefit.

In terms of the economy, the market fundamentalism of "cut the state and leave it to the market" has been such a disaster that already covert state pump-priming has returned to the agenda. The funding for lending schemes for business, and mortgage deposit subsidies, may disguise the fact that the state is intervening to boost the economy – and be inefficient and probably ineffective in how it does it – but that is the reality, with more direct public spending on infrastructure and housing likely to follow as we get nearer to an election.

So whose world is this? Thatcher's small state, free enterprise utopia? Or is it pretty much the world of the postwar settlement established by the Attlee Labour government – a truly transformative government – which created the social democratic institutions which actually still shape our society?

And how about the other leg of Thatcherism, family and fatherland? Well, we are manifestly not becoming more socially conservative. We have, as near as damn it, gay marriage, more children than ever are born out of wedlock, capital punishment remains resolutely unrestored, and the Tory party has openly gay, black and Asian MPs. Oh, and the head of the nation, our dear Queen, was last year co-opted to appear in the most significant expression of our cultural identity in recent times, the opening ceremony of the Olympic Games: a raucous vision of multicultural classlessness and social solidarity.

Is this Thatcher's world? Or is actually the world of Harold Wilson's 1960s government – which abolished capital punishment and liberalised the laws on abortion, divorce and homosexuality – and his mid-70s government which passed the equalities legislation under which our current diversity blossoms.

Maybe the obeisance to Thatcherism says more about the capitulation of a section of liberal opinion to the noisy myth-making of the right, and the short-termism of its permanent revolution of initiatives and reorganisations.

Just before she was dumped by her party, Thatcher expressed a desire to beat the record in office of the early 19th-century prime minister Lord Liverpool, who served for 15 years between 1812 and 1827. But who today remembers Lord Liverpool, or has even heard of him. If they do at all it is probably for the Peterloo Massacre and presiding over one of the most reactionary and repressive periods in modern British history.

He too dominated his age, in an attempt to restore an old aristocratic order and turn back the radical ideas of the late 18th century. But within 10 years of his death, the repeal of the combination acts and the reversal of the Tolpuddle judgment legalised trade unions, Catholics and non-conformists gained their civil rights, the Great Reform Act was passed, slavery abolished and the first factory acts put on the statute book These are difficult, even desperate, times for those who still believe in civilised social democracy, and there is no doubt of the Tories' intention to turn over as much as possible of the public realm to private profit. But that is not inevitable. In the end, Danny Boyle's unruly social solidarity may hold the line. Social democrats my regain their confidence – even the Labour party is daring to mention once again a commitment to full employment.

It may be that in 10 or 20 years, Thatcher will turn out to be a barely remembered transitional figure; like Lord Liverpool, a reactionary irrelevance in the long view of history.

Be not afeard.

Guardian