PICKING a Labour candidate for Falkirk shouldn't be hard.

Stick a pin anywhere in a list of people who do not bear the name Eric Joyce and you have already done the voters a favour. Problem solved.

Had someone come up with that ploy, a lot of grief could have been avoided. While Unite and Labour grandees tear lumps from one another, while the Scottish party is made to look inept and irrelevant, while Tories enjoy their sport and a shadow cabinet member resigns, a bit of perspective might therefore be required.

After Joyce, does it matter who gets the job for life? Outshining the individual who became the first MP to run up a cumulative £1 million in expenses before preoccupying the tabloids, the courts and the Commons authorities barely counts as a challenge.

Perhaps Ed Miliband and Len McCluskey, the union's general secretary, could toss a coin. Heads or tails, no-one loses. Ringing declarations of mutual admiration and common purpose could follow. What, as the person on the Falkirk omnibus might ask, is so complicated about that?

The alternative, as it has unfolded since the Sunday Herald broke this story, could hardly have been worse for Labour or the union. The party has been treating its benefactors like embarrassing in-laws. Unite has been caught acting as though participatory democracy is a kind of voucher scheme. Each is disgusted, to hear them talk, with the other.

Tom Watson, stepping down as Miliband's General Election co-ordinator, gave a flavour of this in his resignation letter. Beyond the usual expressions of loyalty there was a reference to "the unattributed shadow cabinet briefings around the mess in Falkirk". Watson is a friend and former flatmate of McCluskey. His office manager, Karie Murphy, is a Unite official and was the union's candidate for Joyce's seat before the brawling began. A mess indeed.

The Tories love it, of course. Anything likely to damage Labour and the unions simultaneously is the kind of luck David Cameron can't believe. Miliband in hock to McCluskey; "barons" roaming the land; vested interests flagrant in their contempt for the democratic process: a dream. The coalition couldn't have written a better script. It takes a special kind of genius, though, not just to write this farce but to act it out.

Labour is shocked – shocked! – to hear that Unite has been promoting a favoured candidate for Falkirk and packing the constituency with new-minted activists. It is refreshing to hear that no member of the shadow cabinet ever had union backing in a selection meeting. And remind me: which union pushed Ed Miliband over the line in the leadership contest with his brother, muscling aside constituency members and Labour MPs?

Meanwhile, Unite has been shouting about smears and legal action. McCluskey, too, is shocked, and has dubbed Labour's internal inquiry a "stitch-up". The very idea that there could be jiggery or pokery in nailing a safe seat for a union's favoured candidate is without precedent in the annals of the movement. And now Labour dares to "disenfranchise" the 100 or so individuals, consciousnesses newly raised, who were eager to do their bit in Falkirk? An outrage.

Some facts are worth bearing in mind. One is that trade unions give a lot of money to Labour and see precious little in return for the cash. Another is that the party is in desperate need of the money, but equally desperate to keep the unions at bargepole's length. Both partners are therefore in a bind.

The private donors of the Blair-Brown years have fled from Miliband's Labour. Anyone who remembers Bernie Ecclestone's offer of £1m might not mourn the fact, but it has left the party more dependent on the unions than ever.

With debts approaching £10m, Labour would be bankrupt without McCluskey's members and others like them. Currently, the trade union movement supplies 82% of Labour's donations. Unite alone has given £8.4m since Miliband became leader. Roughly speaking, it has provided 20% of Labour's cash. The old Tory jibe is therefore factually correct: the party is in the pocket of the unions.

You can see why McCluskey might be a little irritated, then, over that mess in Falkirk. His union wants a Labour government that will serve the interests of working people. What else would a trade union want? Unite is therefore in the business of giving its backing to candidates who will share its objectives. What, in principle, is wrong with that?

Instead, the unions are keeping Labour afloat while being told that a Miliband government will stick to Tory spending limits and reverse few, if any, of the coalition's cuts. Living standards are collapsing – down by 3% last year alone, according to the Institute for Fiscal Studies – and George Osborne has earmarked another 144,000 public-sector jobs for destruction. The response from Miliband and Ed Balls is to capitulate.

McCluskey, predictably enough, is furious – in a recent New Statesman interview he said as much. Then the row in Falkirk exploded. Unite does not regard that as a coincidence, it seems, especially when Peter Mandelson is on the scene. Alleged unsavoury practices that caused not an eyebrow to be raised in the Blair years are suddenly a huge controversy. Why is that?

Probably because there is a struggle going on for what passes for Miliband's soul. McCluskey wants a party committed to working people. The Blairites who congregate around the cabinet table regard the "union link" as a vote-loser and yearn for another "Clause four moment". In their world, it is always useful for a Labour leader to pick a fight with the left.

They also calculate, probably correctly, that threats from Unite and others to cut off funding are mere bluster. Where else would the unions put their money, after all? How would they fare without access to the politicians?

One side is bluffing the other. The unions know that Labour cannot survive without their donations. Some in the party conclude that a shrunken trade union movement would lose what influence it still possesses if it dared to cut Miliband adrift. Any larger moral purpose for Labour is utterly forgotten by politicians who understand only "positioning".

What would Miliband offer instead of a party dedicated to the service of working people? His One Nation gibberish? Tory austerity with a sympathetic face? Just another painted pony on the Westminster merry-go-round?

Trade unions created Labour because a workers' movement stood in need of parliamentary representation. The need now, as Unite argues, is as great as ever. Ordinary people are being crushed. But fixing a few parliamentary seats, by fair means or foul, is no sort of answer – not when Labour itself is the problem.