On a chilly autumnal evening last month, the Berliner Platz in the eastern German city of Cottbus was buzzing by the time Sahra Wagenknecht appeared. One activist, busy handing out leaflets promoting the latest maverick force to disrupt European politics, said she was there because Wagenknecht “understands people like us”. Anti-war banners were dotted around the square. One elderly woman proudly displayed a badge reading Omas für Frieden (grandmothers for peace).

Formed only last January, the eponymous Sahra Wagenknecht Alliance (BSW) has been collecting voters from across the political spectrum, although mainly from the left. An unscientific straw poll suggested much of the Cottbus audience had previously voted for the Social Democrats, or the Left party to which Wagenknecht used to belong, or not at all. Her stump speech checklisted blue-collar anxieties: the cost of living crisis, declining healthcare provision, a lack of access to good jobs and affordable housing, and meagre pensions. Mainstream political and cultural elites, Wagenkecht told many nodding heads, suffered from an abject lack of empathy with these “ordinary realities”.

What’s not to like? Well, quite a lot, it turns out. Popular, charismatic and combative, Wagenknecht is the rising star of German politics following elections in which the BSW came a strong third in three states in Germany’s east. Her origins are on the left, but to say her rise has not been welcomed by mainstream progressive opinion would be to hugely understate the level of antipathy.

Wagenknecht was once a youthful communist in the former East Germany. Pairing her with Björn Höcke, the current neo-fascist luminary of the far-right Alternative für Deutschland party (AfD), one high-profile commentator recently told Die Zeit: “Wagenknecht and Höcke are the political bride and groom of the moment. What belongs together in the former GDR is growing: the heirs of Hitler’s national socialism and Stalin’s national communism.”

The hostility is not difficult to explain. Founded by Wagenknecht at the start of this year as a hybrid “left-conservative” movement, the BSW’s avowed mission is to provide working-class voters tempted by the racist authoritarianism of the AfD with an alternative. But in the eyes of its critics, the BSW’s approach has been to echo the AfD’s talking points on the war in Ukraine, immigration and the climate crisis.

In town squares, and previously as a high-profile author and talkshow pundit, Wagenknecht has rejected progressive causes with provocative relish. She refused from the outset to back western military support for Ukraine, talking up popular anxieties over a wider war and prioritising the restoration of cheap Russian energy for German industry.

On migration, the BSW’s policies are closer to those of, say, the French prime minister Michel Barnier than the AfD’s ethnonationalism and racist fantasies of mass repatriation. But Wagenknecht’s language on the need for tighter borders and faster deportation of failed asylum-seekers has played to the gallery in inflammatory terms. And in one interview she said: “There should be no neighbourhoods where natives are in the minority.”

A rejection of net zero targets, characterised as an unnecessary burden on less well-off people, has been combined with polemical attacks on the “virtue-signalling” liberal middle classes. In her 2021 bestseller, The Self-Righteous, Wagenknecht deplores city-dwelling “lifestyle leftists” who supposedly vaunt their ethical superiority by driving electric cars that remain unaffordable for most, and waste their time on identity politics.

Such provocations have unleashed a tide of disapprobation. But designating Wagenknecht as beyond the pale is too easy. As the far right courts blue-collar voters across Europe with increasing efficiency, most recently in Austria, her political success deserves a more considered and self-critical response from progressives.

Contrary to the assertions of her more hyperbolic critics, Wagenknecht is not seeking to resurrect the authoritarian spirit of the GDR. But in an important way she does represent a political throwback to the world before the fall of the Berlin Wall. After the collapse of communism and the deregulation of financial markets, the global economy metamorphosed at extraordinary pace, and with minimal pushback in Europe from disoriented social democratic parties. What Wagenknecht labels “BlackRock capitalism” – finance-driven and restlessly seeking short-term returns – became a destabilising and disruptive force.

A new mobility – of people, information and above all of profit-seeking capital – stripped regions, businesses and workforces of security and protections they had previously enjoyed. Governments hemmed themselves in with fiscal rules designed to appease market sentiment. Inequality rose and social cohesion diminished.

The “conservatism” of the BSW relates to a defensive restoration project, on behalf of the losers in this revolution. In a lengthy recent interview with the New Left Review, Wagenknecht describes her party as “the legitimate heirs of both the ‘domesticated capitalism’ of postwar conservatism and … social democratic progressivism”. Much of her approach is redolent of the kind of “old” left programme that was buried in the ideological fallout of 1989 – a proactive state, substantial redistribution through taxation, huge public investment in services and infrastructure, stronger unions, higher wages and better pensions for the least well off.

These social democratic priorities faded from view from the 1990s onwards. Strikingly, given Wagenknecht’s communist backstory, they are combined with a commitment to support medium-sized manufacturers – the increasingly beleaguered German “Mittelstand” – against the predations of multinational corporations. The “domesticated capitalism” of the postwar period, argues Wagenknecht, accorded a power and status to blue-collar voters that has been lost. Its abandonment has been felt as a betrayal.

One does not need to endorse the full range of Wagenknecht’s iconoclastic views to accept the power of this economic diagnosis. In Cottbus, the crowd was filled with the same disillusioned demographic that has been peeling off from mainstream politics across Europe. The left will not succeed in winning back these hearts and minds without real evidence that it understands their disenchantment and is willing to address it.

During his successful election campaign in 2021, the SPD German chancellor, Olaf Scholz, appeared to get this. Referencing the American political philosopher Michael Sandel’s book The Tyranny of Merit, Scholz noted the “dissatisfaction and insecurity” felt by non-professional classes, “not just in the US or UK, but also in the Netherlands, Sweden, Denmark, Finland, Norway, Austria or Germany”.

The solution lay, he argued, in a restoration of “respect” that would come through the fairer redistribution of social rewards and esteem. But levelling up Scholzian-style was doomed by the decision to create a centre-facing coalition that included the neoliberal, austerity-backing Free Democratic party (FDP). The consequences of that choice were summed up last year when ministers attempted to make the rapid installation of climate-friendly heat pumps compulsory. A refusal to offer adequate subsidies to assist less well-off households contributed to a boom in AfD membership across Germany.

The BSW is attempting to fill the political gap left by such failures of leadership. As the world struggles with era-defining geopolitical and environmental challenges, progressives need to learn lessons from the provocative rise of Wagenknecht, rather than raining anathemas down on her head.