In April 1993, black teenager Stephen Lawrence was stabbed to death at a bus stop in south London. The Metropolitan Police Service (MPS) bungled the investigation, and by 1997 Britain's new Labour government announced a judicial inquiry into the matter. The report was published in 1999 and found that "institutional racism affects the MPS, and police services elsewhere." It also made recommendations aimed at "the elimination of racist prejudice and disadvantage and the demonstration of fairness in all aspects of policing."

Since then the country's police services have been suffering a public nervous breakdown, quaking at every public-relations setback and buckling under mounting restrictions on their ability to do their jobs. The Metropolitan Police is also leaderless, its commissioner having resigned last month in the wake of the phone-hacking scandal.

What has happened to the British police in the last decade is a textbook example of how to wreck an institution. In November 2010, when students and anarchists took to the streets in protest of rising tuition fees, they vandalized property and smashed the Conservative Party's headquarters. The police seemed unable to stop them.

A couple of nights ago a member of the public in an affluent London neighborhood accosted a group of rioters. They beat him into traction while a policeman looked on. He had apparently called for backup and could not do anything until it arrived.

Dysfunction does not only permeate Britain's police force. It applies to most of Britain's institutions, from schools to social services to local governments.

This week's chaos might signal an even more important moment for Britain than many people realize: Either the radical left's lies about the country—namely its economic and welfare system—will finally be exposed, or they will be reinforced by politicians eager to rewrite history. The leaders who helped bring us to this pass seem intent not merely to repeat their mistakes, but to deepen them.

Within hours of the riots starting on Saturday, the left-wing former mayor of London Ken Livingstone claimed the unrest was "the fault of the government," citing a 9% cut in central government grants to Tottenham, where these crime sprees began. Labour's Shadow Health Minister Diane Abbott made sure to garnish her condemnation of the violence with the reminder that in her constituency, "Haringey Council has lost £41 million from its budget and has cut youth services by 75%." Whether her constituents ever raised this issue as they looted luxury-goods shops, Ms. Abbott did not say.

Deputy Labour leader Harriet Harman behaved worst of all. Claiming on Tuesday that Labour leader Ed Miliband had been "well-received in Peckham," she compared this reception to the hostility that has greeted Britain's Conservative Prime Minister David Cameron and London's Conservative Mayor Boris Johnson this week. She claimed that the difference was due to the Labour Party's opposition to tuition-fee rises. Stuck in an even less functional radical-left tape-loop, Labour Parliamentarian John McDonnell blames bankers.

So the Labour Party has decided to draw political conclusions from the hooliganism. They have decided that these supposed breadline-rioters—who seem utterly uninterested in bread—are the product of political decisions the Tories have made in the last 15 months. Fine.

But these aren't the only political conclusions we can draw from this week. One is also tempted to point out that during Labour's 13 years in power it raised public spending to record levels to fund a massive increase in the welfare state. By the time the current government came to power last year, it had no fiscally sane choice but to reduce these unsustainable spending levels. Hence, the "cuts" (which still entail nominal spending increases) that Labourites are now blaming for all that ails Britain.

Did the country at least get anything for its money under Labour? Only a generation of young Britons who consider work not merely a "lifestyle choice," but a crummy one at that. Under Labour, a life on welfare appeared the best life to live.

It is no surprise that the north London borough of Islington has been among the riot scenes this week. Prosperous and left wing, it is also scattered with the welfare beneficiaries whom Labourites have created. To that extent the borough was the postcard exemplar of leftist Britain. And now it's up in smoke.

A few years ago former U.K. cabinet minister George Walden wrote a terrific short book about the country, called "Time to Emigrate?" If it gets reprinted this year perhaps the publishers will consider dropping the question mark.