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David Howell (Lord Howell of Guildford) is a former Secretary of State for Energy, Secretary of State for Transport, Minister of State in the Northern Ireland Office and has served most recently as Minister for the Commonwealth in the Foreign and Commonwealth Office, and as Minister for International Energy Security. He is the author of several books, including Blind Victory (1986), The Edge of Now (2000) and was co-author of Out of the Energy Labyrinth (I.B.Tauris, 2007).

‘David Howell challenges pessimism about Britain’s role in an evolving world, and sets out with rare clarity how she can improve her status. He has produced an excellent and very readable book – for today and many years to come.’

The Rt Hon Sir John Major KG CH, former Prime Minister

‘The resurgent Commonwealth is one of the most glorious paradoxes of the global economy – and it is great news for Britain. As Europe stutters and stalls, it is time for us to lift our eyes once again to those countries with which we have historic ties of friendship and kinship and which are experi-encing sensational growth. As David Howell rightly argues, Britain’s future must be at the centre of the global economy.’

Boris Johnson, Mayor of London

‘In a digitally networked world, Britain enjoys great softpower resources in the form of its culture, institu-tions, public diplomacy and historical connections at all levels through the Commonwealth and other associations. In this engaging and provocative book, David Howell presents his view of a smart power strategy to take advan-tage of these assets. It is a good read!’

Professor Joseph S. Nye, Jr, Harvard University and author of The Future of Power

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‘Who said you can’t have your cake and eat it? Certainly not David Howell. Here he argues pungently that Britain, acting wisely, can choose the best of our relationship with Europe, with the Commonwealth, and [can] sometimes… [be] simply little Britain.’

The Rt Hon Frank Field MP DL

‘In elegant and simple prose, Lord Howell presents a powerful argument for a future consisting of networks among nations of people, not blocs of governments of countries.’

Matt Ridley, author of The Rational Optimist

‘A very stimulating book, which maps out the revolution in diplomacy which the networked society of the twenty-first century will bring.’

Paul Ormerod, economist and author of Positive Linking: How Networks Can Revolutionise the World

‘Repositioning the UK in a changing and growing world economy is not just a challenge, but as David Howell outlines, a fantastic opportunity. He outlines many reasons to be optimistic about the role Britain can play globally in the future.’

Gerard Lyons, international economist and Chief Economic Advisor to the Mayor of London



Published in 2014 by I.B.Tauris & Co. Ltd6 Salem Road, London W2 4BU175 Fifth Avenue, New York NY 10010www.ibtauris.com

Distributed in the United States and Canada Exclusively by Palgrave Macmillan 175 Fifth Avenue, New York NY 10010

Copyright © 2014 David Howell

The right of David Howell to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

All rights reserved. Except for brief quotations in a review, this book, or any part thereof, may not be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher.

ISBN: 978 1 78076 815 1

A full CIP record for this book is available from the British LibraryA full CIP record is available from the Library of Congress

Library of Congress Catalog Card Number: available

Typeset in Sabon by 4word Ltd, Bristol

Printed and bound in Great Britain by Page Bros, Norwich


CONTENTS

Introduction 1

PART I BRITAIN IN A NEW LANDSCAPE 7

1. Riding Two Horses 9 2. The Sixth Phase 17 3. The View from the Watchtower 29 4. Old Links and New Ties 42

PART II LIFTING THE BARRIERS 59

5. The Age of Delusions 61 6. How Tomorrow Never Came 73 7. The Party of 23 January 97 8. The Onward March of Folly 120 9. The Economists’ Shadow 13010. The Energy Imbroglio 144

PART III POWER AND PERSUASION 161

11. Softpower Revisited 163


Old Links and New Ties

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12. The Face of the Future 17313. Drifting No More 190

Epilogue 199

Annex A. A Departure Note 209Annex B. Authority Has to Learn New Tasks 213Annex C. The EU’s Climate and Energy Policy 219Annex D. Commonwealth Accredited Organisations 223

Notes 227

Index 235


Acknowledgements to many are in the text. Gratitude is to the reader for opening this book. Expectations are from the reviewer. Support is gratefully received from the many who look today in the same direction. Hope rests with the people of Britain.


I have made a gift to mine enemies, I have written a book.

Anon


IntroductIon

History and its chroniclers tell us that without a constantly renewed sense of purpose and direction, divisions grow within societies, hopes decline and things fall apart. this book contends that, for Britain, there is a better prospect in store. It is not about past history, and certainly not another polit-ical memoir. It is about the present, not the past, about what is holding our world together and what will continue to do so in the immediate future. It asks whether the commonwealth model, and the changing characteristics of the commonwealth (which will figure strongly in the pages ahead), could be a big feature in the unfolding story – much bigger than believed in recent decades – although it is only part of an even wider picture with many perspectives.

the focus is essentially on the possibilities for Britain in an already completely transformed international landscape – a scene of networks and connections of such a density and of such a new kind, and with power so diffused, that almost every past assumption about the nature and conduct of inter-national affairs is being challenged, and almost all fixed ideas about Britain’s place, interests and direction in this new setting are coming into question. Above all, this book seeks to show

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how Britain can stay fit to perform well in the global race, now already under way, although it is a race with many new rules and along an unfamiliar route.

Inevitably, it will be necessary to go back somewhat to trace the roots of current dilemmas and prospective developments – to see and understand, in the words of that master realist John Maynard Keynes, what is actually happening. It was not so much with rival theorists, Keynes said, that he had his fiercest quarrel, as with those who simply refused to recognise what was actually going on and happening right before their eyes and under their noses, but which they doggedly and dogmat-ically failed to acknowledge. these are our prime targets here as well.

But this book’s main purpose is certainly not destructive. It is to show how Britain is already being fundamentally reposi-tioned in this transformed world; how the West is down, but by no means out; how, in the digital network age, the nature of relationships between states has been altered. It seeks to explain how much of the economic analysis and theorising underpinning the old order has ceased to be relevant or illumi-nating, let alone informative about the next stage in Britain’s fortunes; how a double revolution in the world’s pattern of energy resources has irrevocably altered the distribution of power and influence across the planet; how democracy comes in many forms; and even what it means to be a democratic state has changed in the new instant communication conditions (and with the growth of so-called contact democracy).

Amidst all this mêlée of shifting trends and views the question is whether and how Britain can regain a stronger degree of confidence, and some greater sense of collective and national purpose. It will be argued that the chances are good, not least because of its fortunate worldwide commonwealth connections.

If so, why is it that such an aura of pessimism prevails, that a feeling is so widespread that somehow the country is being held back, that we are trapped by an infuriating mixture of restraints? the proposition here will be that while the road ahead is good and wide, there is nonetheless a barricade of obstacles strewed across it – deep-seated delusions, popular


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introduction

misconceptions and plain failures to grasp and understand the total changes in Britain’s world setting that have already taken place, let alone what is to come. In particular, we are still locked in backward-looking ideas about Britain’s European role, about relations with America, about Britain’s true economic position. We still hark back to financial and political prophets who have turned out to be utterly wrong-footed by events. We still fall for shallow interpretations of democracy, what it means and how it works, in the information age. We still cling to theor ies about climate patterns and energy devel-opments that turn out to be false. these are just some of the layers of delusions and myths that somehow have to be cleared aside or hacked through if that more open road can be reached.

the chapters which follow pick up each one of these themes. they deal in turn with the main forces and trends that are already giving shape to the new context, and the interna-tional realities which we can just discern emerging through the mists of confusion and past misconception. In Part one, the first four chapters show how a new phase has emerged in world affairs to which Britain must and can now adjust, how the repositioning of Britain in an unfolding new era demands different mindsets and necessitates an assault on orthodoxies and derelict ideas (chapter 3), and how new openings can be seized (chapter 4).

Part two looks at some of those major obstacles and barriers that are holding Britain back and blocking the way ahead. First, a route must be mapped out to escape from the dismal polarity of the European debate. Leading chinese commenta-tors are forever warning the British about not having all eggs in one (European) basket. there should be no need whatever for that warning, and yet the European issue continues stub-bornly to dominate British debate – a vexing obstacle in the way of wider visions and wider adaptive strategies. Both those who urge Britain to go further ‘in’ with Europe and those who, in contrast, insist that the only way is to come ‘out’ offer us the falsest of false choices. A maddening ‘diagnostic alli-ance’ (to use robert Skidelsky’s phrase) confronts us between those who argue that the Eu is so strong and so wedded to integration that Britain must withdraw, and those who make



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exactly the same analysis, starting from the same viewpoint, and conclude that therefore we must plunge in deeper, without protest, and submit to the full integrationist discipline. the uK Independence Party (uKIP), which has had such success, interestingly holds both views at once – that the Eu advance towards integration into a single state is unstoppably strong and yet that the Eu is bound to break apart and is fundamen-tally weak.

All these camps, the chapters will argue, are the children of defeatism, the messengers of lost confidence, the apostles of decline. Britain will neither be subsumed and rendered power-less, marginalised, inside a fast-changing Eu, as some highly articulate voices keep claiming, nor isolated and marginalised outside the Eu, as a great galère of politicians, commentators, think-tank experts and even industrialists continue to insist (although some have begun to qualify their views). Instead, the forthcoming chapters will show how the continuing European dilemma for Britain can be transformed from an obstacle to an opportunity, from an endless irritant into a healing force (chapters 6 and 7).

Subsequent chapters address some of the other main factors that are holding Britain back from assuming its new global role with vigour and confidence – matters that ought to be preva-lent in debate among academics, intellectuals and the thinking commentariat, but which regrettably are not. For example, as chapter 8 discusses, in the network era the British–American relationship is plainly overdue for resetting, with further follies avoided, the dangerous simplicities of American strategic policy checked and twentieth-century leadership replaced by twenty-first-century partnership.

Meanwhile, false and misleading economics still ensnare us, confusing the way forward (chapter 9) and disguising rather than illuminating what is actually happening, masking the new trade and business realities in the network age on which Britain’s future prosperity and innovative resources depend. then there is the energy scene (chapter 10), where the situation ought to be giving Britain strength and support in moving on into the new landscape, but is instead doing the opposite, being undermined by utterly misguided energy and climate policies,


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introduction

while little is being done to combat climate change. Meanwhile, revolutionary reconfigurations in the global pattern of energy and natural resources are rearranging the chessboard of inter-national power and influence.

In Part three, chapter 11 explains the new techniques and levers of power and persuasion, and the re-tuning of priorities, required for Britain to adjust, survive, prosper and contribute in the coming age of unparalleled interdependence – the diametric opposite of the isolation that some fear. It is shown how hyper-connectivity shifts power and how the world is now not just flat, as thomas Friedman has taught us, but bursting with new opportunities, enabling a country like Britain to carve out a new role at last.

chapter 12 brings us to the commonwealth again, Britain’s lucky legacy, and to a description of how the trans-continental and spreading web of commonwealth connections, embracing a third of the human race, has acquired a central and rejuve-nating role in the changed global scene – becoming a potentially transforming vehicle for Britain, as for all commonwealth members, in a deeply troubled world.

chapter 13, a conclusion and gateway, shows how within, through and via this newly invigorated network an agile and confident Britain can find its lost role and pathway, and bring to an end the years of national drift. It is over six decades since dean Acheson made his wounding speech at West Point about Great Britain having lost an Empire but not yet having found a role. I met Acheson just once, in Washington at a Georgetown dinner – he was a noble statesman of great charm. He died in 1971. For him the message now is requiescat In Pace; all is oK; the role may be different – the global network asks for partners, not leaders. But it has been found. We are there – nearly. our role is within reach.

Finally, the Epilogue reflects, on a more personal note, on the heroes and struggles of yesterday, and the path they set us on to present concerns and tomorrow’s needs.



Part I

Britain in a new Landscape

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Riding Two HoRses

it was a morning in June 2011. There had clearly been some mistake. Algeria wanted to join the Commonwealth. That is what i was being told at my desk in the Foreign and Commonwealth office.

How on earth could this be? surely down there in the Maghreb, Algeria belonged to the French sphere – although in past years it had had some strong Russian connections. And anyway, what was this about the Commonwealth?

wasn’t that just a yesterday club, a scattered and nostalgic collection of countries across the globe who had had some connection with the old British empire, and who liked to meet occasionally to talk about values and principles (but not always practise them), dine with the Queen and go on their separate ways?

Yet there it was in the diptel,1 in black and white. Algerian ministers were enquiring about possible association with, even membership of, the Commonwealth – a network stretching across 54 independent nations, embracing 16 realms and 38 republics or other monarchies and somewhere above 2 billion people, just about a third of the human race – and on paper at least an economic colossus with 20 per cent of the world’s



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trade and growth prospects that would make european eyes green with envy.

The Algerians, it seemed, wanted to be part of it.Admittedly this was not my first surprise about would-be

Commonwealth membership. The queue had already been forming long before that message. Mozambique and Rwanda – neither with any past British connections – had already joined. so had Cameroon, with only a tenuous British link. Then there had been south sudan – a brand new (and struggling) nation. There had been suriname, Burundi, Angola – a long string of ambassadors and visiting ministers calling to express interest. There had been the Kuwaitis, repeatedly asking about the Commonwealth. There had been little somaliland, not even a fully hatched country, and Palestine, the same. A long list trailed away from the understandable to the improbable – a word from dublin about ireland’s increasing interest; a call from Yemen; a thought that Burma (Myanmar) could join in due course; a murmur from mountainous Bhutan; there was even said to be interest in Baghdad. From outside were coming continuous enquiries. Japan in particular had shown particular interest in links at local government level (through the highly active Commonwealth Local government Forum and through the Commonwealth Parliamentary Association).

But why this club, this network? it seemed as though these aspirants were searching for something new in the way of international togetherness, something the great multilateral institutions inherited from the twentieth century were failing to provide. Had they all realised a point that had not been quite grasped in London? were there now new and more complex trade routes emerging, new investment flows forming, new economic, cultural, commercial and political synergies taking shape, new markets, new growth patterns, new alliances and common interests that did not fit into the old western world-view? Had the Commonwealth network, with its common (mostly) working language, its similar legal systems, its vast criss-cross trelliswork of linkages, mostly non-governmental and at every conceivable professional, business and cultural level, somehow acquired new relevance in the digital age of instant and total communication and hyper-connectivity?


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riding two horses

Could it even be that the global statistics of income and output (if they could be believed) were beginning to signal a new story – for example, that 70 per cent of world gross domestic product (gdP) growth over the next two decades was going to be outside the Atlantic area and the organisation for economic Co-operation and development (oeCd), that the huge new megacities of Asia, Africa and Latin America were set to be the magnets of wealth creation, and the fountains of new thinking, innovation, technical and even social advance not seen for centuries past, that in the rather patronising terms of some commentators, the Rest was about to outpace, and even come to the rescue of, the west?2 And was the pinning on of this apparently sought-after Commonwealth badge somehow becoming an entry ticket – not the only one, but a very useful one – to this new catallaxy3 of like-minded peoples and communities, all connected up with an instantaneity and intensity unparalleled in human history, a network combining both real and virtual cohesion, like no other?

if there was this new world emerging, a new constellation not just of economic entities but also of powers, poles, alliances and influences across the global scene, then some big changes of mindset were going to be needed up in northern europe and especially in Britain.

Forty years before, in 1972, we had been told the complete opposite. we had been told that Britain’s global role was over, that the lessons of suez were crystal clear and that the nation’s markets, its destiny and its future prosperity lay in europe and in wholehearted membership of the then european economic Community. Britain could safely turn its back on the Commonwealth economies, which seemed to promise only slow growth and shrinking markets compared with glittering europe. There might be a problem, of course, about the special relationship with the UsA and there might be some awkward choices ahead. But europe came first.

it seemed so obvious at the time – especially in non-socialist circles. Britain in the 1960s was mired in slothful corporatism, overbearing trade unionism, swollen state ownership – an innovation desert. Having won the war, so we believed, we had lost the peace. surely the Common Market was the place



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to be – even the word ‘market’ had its allure. in the younger end of the Conservative Party, although most definitely not in the Labour Party, the mood turned strongly pro-european. This was where efficiency and competition lay, this was where the stimulus to slow-moving Britain would come from. And this was where modern-minded, brisk (and brusque) edward Heath, the newly elected Conservative leader, would take us.

Led by the infallible doctor Hindsight, opinion in some quarters now inclines to condemn the thinking of the 1960s era, condemn Heath and depict that move as a gigantic error, as well as a calculated deception, a conspiracy. But at the time it was not like that at all. To most of the younger generation it seemed entirely the right thing to do. The difference now is that we are more than four decades on. The difference is surely that we are now the other side of a colossal informa-tional and digital revolution which has changed the world economy, changed the pattern of global power, created a vast and largely ungoverned cyberspace, shifted the world energy balance, altered the role of states and the reach of govern-ments, changed even the kinds of statecraft needed to survive and prosper in utterly transformed world conditions.

with that query from Algiers, i was looking through a window. i was gaining just a glimpse of something completely new – a totally, radically altered international landscape. Half a century earlier, the world had scoffed at Hugh gaitskell as he spoke of a thousand years of history being threatened by British entry into the (then) european economic Community (eeC). To mainstream opinion he appeared ridiculously wrong and out of date. The facts seemed to contradict his predictions. Time would show, it was believed, that his political fears were overdone. economic survival was the priority.

But 50 years later, the future is picking up the tracks from the past, although in ways that no one could have remotely foreseen, or did foresee. The global markets on which the British consciously turned their backs then are now the big new markets of the future. The wheel has turned full circle.

of course the British are still and always europeans, placed by history and fate in a fabled region. nothing is going to change that. The new economic patterns, spaces and


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riding two horses

imperatives of a network age, now taking shape all around, cannot be seen as alternatives to trade with eU countries right next door – our neighbours, our village, our community. The health and prosperity of the european neighbourhood inevi-tably remains a central British concern. The growing divisions and bitterness in europe, slicing down the middle of the euro-zone, call for full British support for reunification and the healing of intra-european wounds (as so often in the past). The British love affair continues on and off with France, awe of german excellence remains, delight with Mediterranean europe continues, romance with Central europe and the great medieval fortresses and the soft autumn spas, the burning spirits of independence and freedom – all of it remains as strong as ever.

But – and it is all in that word ‘but’ – may not Britain’s prime interests be starting to lie as much beyond our europe as within it?

if europe seemed the spearhead then, all those years ago, are not the giant economies of the indian ocean and the Pacific Rim, the dawning energy-rich African states, the prospering Antipodes, the reinvigorated Latin Americas, the spearheads now? in many respects, geography no longer matters very much at all. The history books teach us about capital and investment flowing from the ‘advanced’ industrial west to the developing world. But now it is becoming the other way round. Massive Asian and African savings are coming to finance the west’s tardy modernisation. Confident new networks, enliv-ened by instant connectivity, are springing up all around the world. in truth a vast global bouleversement seems to be taking place. Bewilderingly, the developing are fast becoming the developed. The poor are becoming the less indebted while the rich, the so-called ‘advanced’ nations, are mired deeper in debt than ever before in history. The savings of the east and the south are coming to the rescue of the north and the west. The so-called backward states turn out to be forward – in some cases, ahead of the west both technologically and education-ally. The small are setting the pace for the big – as david Lloyd george (the welsh wizard) once claimed, they always have done so throughout history.4 The advanced are being advanced



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upon. Power is slipping away to the powerless. Vaclav Havel’s dazzling insight becomes the new reality.5

The modern Commonwealth network, a totally different construct from the past, is only a part of this entirely new and unfolding international scene, an international community of a new character and texture, conforming far less to any blue-print, shaped much more by principles of self-organisation. But for both Britain and all its current members, as well as for the aspiring ones, it must surely be a huge potential asset, a gateway and portal, on which others already look with envy – and, it must be said, with some puzzlement – that we don’t make much more of it. The more the new picture emerges, the more it seems pure folly, after the decades of relative disin-terest, not to join in wholeheartedly with all the other members in further strengthening and developing the Commonwealth.

in the Foreign and Commonwealth office, when being briefed to answer tricky House of Lords questions due from a daunting array of deeply informed expert peers about remoter parts of the world and their often tragic problems and misfortunes, and explain how Britain could somehow help, beyond mere hand-wringing (and expressing ‘deep concern’), i used regularly to ask officials, a bit crudely, just what was in it for us, the British?

Apply the same discipline to the modern Commonwealth. Just where are the benefits for Britain, for the British, for everyday life and future prospects? Questions like this – and their answers – need to be phrased with care, because if revived British enthusiasm for the new Commonwealth network seems to sound and feel like just another British promotion for British ambitions, a last gasp and belated attempt to stay at the top table of nations, that would be counterproductive and very coolly received by other member states. There is history to be lived down, baggage to be shed, new degrees of trust and mutual respect to be built up.

But didn’t James Maxton once say that if you can’t ride two horses at once then you had no right to be in the bloody circus. or was it denis Healey?6

it does not matter too much. Through all the decades since world war ii, foreign policy experts have been saying the same thing about Britain.


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riding two horses

All along, it was that Britain could not be both a good european and America’s closest ally. it could try to have it both ways. it could talk about being some sort of bridge across the Atlantic. But in the end it had to choose.

Those who now espouse the Commonwealth cause face the same kind of critique. A choice, it is insisted, has to be made. But does it? The Commonwealth Mark Three today is both Anglo-centric and not Anglo-centric. it is a filigree lacework of countess bilateral and multilateral connections criss-crossing the world, by no means always including Britain, which remains just a member among more than 50, and not always a very good one in the recent past. Britain is anyway not even currently a member of the inner guiding committee, the Commonwealth Ministers’ Action group. intra-Commonwealth linkages criss-cross the continents in a maze of new connections – Canada with the Caribbean, Australia with Africa, india with Africa, south Africa with india, Bangladesh with its Asian neighbours, for example.

Yet the British monarch is the Commonwealth’s head, London is still undeniably a sort of Mecca, the Commonwealth secretary resides in his palace in the Mall, Marlborough House, english is the working language, cricket is the game (mostly). British customs, culture, legal procedures, business standards and methods suffuse the system – and everyone likes afternoon tea on the lawn served in worcester china. even Robert Mugabe, who took Zimbabwe out of the Common-wealth before being asked to leave anyway, is said to be waiting for his invitation to take tea at the Palace. Alas it will never come.

we will seek to show in the chapters ahead how, in a changed world, Britain can indeed ride two horses, how it must do so to survive, how the old choices said to confront the UK (between europe and America, between the west and the rising east and south) no longer exist, and how the ambiguities of a role in the modern world, a role in europe and a role in the Commonwealth can at last be resolved.

The French are admired for their skill in putting both europe first and France first, for being the best europeans, and yet it all turns out to be for the glory of France.



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should not the same now apply for both Britain and europe and Britain and the Commonwealth? Cannot the British be both the best supporters of the rapidly changing Commonwealth as a whole and yet use membership to their own immense advan-tage? surely the two horses can be ridden at once. we have the training and the experience, the sensitivity and the skills, to do just that.

so that news from Algiers that morning was not really new. what was glimpsed through the window was not a new revela-tion. it was confirmation of a growing conviction, a finger-tip feeling, a journey in the imagination that was becoming an emerging reality – which we, like other nations, had to under-stand and be a part of to survive.

Like music half heard and coming from a distant room, it was an intimation that completely different forces were gath-ering on the world stage and that it was becoming time for Britain, too, to join the party.


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THe sixTH PHAse

History is a prison warder. it compartmentalises and confines to cells the events, the memories, the experiences of the past, and it conditions each step a nation takes as it stumbles about to find a meaningful, intelligible and consensually-supported way forward. nowhere in recent times has Britain’s history from earliest times been traced and spelled out so well as in norman davies’s magisterial history of the British isles.1 At the end of it all, after traversing the battles, struggles, upheavals, triumphs and disasters of the millennia, Professor davies’s judgment is that today the United Kingdom is heading for imminent break-up and that the european Union may offer some kind of alternative salvation. The raison d’être of the United Kingdom has been destroyed. The forces of history and events are proving too great. we must, in a phrase, chuck it in.

The conclusion here is the very opposite. it is that in this age of globalised contact and almost total communica-tion, unmatched in human history and at every level, not just governmental and official, the future for the United Kingdom, indeed for the whole British isles, could prove to be uniquely favourable, with the european Union playing a significantly



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lesser part in our affairs and our positioning and prospects in the wider world a much greater role.

The reasons for optimism are that the more one exam-ines the staggering intensity of today’s network relationships, whether between governments or peoples, the more they appear to introduce an entirely different dimension into the foreign policy picture. Contacts and culture at non-governmental levels become infinitely more important and influential. international involvement becomes a better description of a nation’s over-seas relationships than foreign policy. The latter implies that a nation or state can shape its relations with others, and with great global trends, by deliberate acts and stances of national policy, and do so with some latitude. Yet there is much less than commonly believed – and what scope there is can be lost entirely unless the new context is understood and the initiative regained within it.

in the British case, relations with its continental neighbours will of course be close and can (and ought) to become both comfortable and, in a broad sense, settled. But although the political noise level about european affairs remains high, they are already a shrinking part of the new picture. The bigger part is being filled by a criss-cross lacework, a vast new ribbonry of connections – between Britain and the newly gigantic cities and powers of Asia, Africa and Latin America, between Britain and the wealth-laden city states of the Middle east, and between Britain and the scores of small nations which popu-late the global network, to which globalisation has not always been kind, and which deserve a fresh degree of respect, under-standing and friendship.

The network of nations forming the modern Commonwealth system, knitted together not just by its British origins (in some cases thin to non-existent) but also by its working language and the dnA within that language, is a central feature of this new tapestry.

From the diplomatic angle, the essential point to grasp is that the peoples of the Commonwealth are not foreigners, they are family. it is no accident that Britain’s lead depart-ment in overseas relationships is named the Foreign and Commonwealth office (although it nearly was an accident,


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the sixth phase

narrowly avoided, when in the early 2000s some short-sighted officials in whitehall tried to drop the Commonwealth bit, but luckily were repelled).

The governments of Commonwealth states may be unfriendly at times, critical, awkward, even hostile, but these are family matters (however strained at times), not foreign policy matters. The difference is crucial because the handling of family matters requires a quite different approach to the handling of matters either with neighbours or strangers. Commonwealth blood is thicker than international water. instant digital connectivity has turned the Commonwealth from a yesterday club into a very live, all-powerful networked system. it is as though the withered arteries of old Commonwealth connec-tions had all been given a huge transfusion. This is the new transformation that has not been widely understood – that we are now confronted with two worlds: the official, visible, phys-ical world of alliances and common interests between states, and the empire of cyberspace – the vastly greater and exploding world of unofficial contacts, virtual links and connectivity at every level of human activity. The Commonwealth, as we shall see, and almost by chance, belongs to both.

As we shall also see, the old picture of the Commonwealth as a fading, nostalgia-ridden institution has long since crum-bled under the impact of new realities. The proof of that probably comes more eloquently from the emerging figures of trade and economic performance, as will be shown, than from any sentiments, eulogies or futurology. The growth that seems to be eluding Britain’s main european export market is alive and well in many of the larger Commonwealth countries. it is currently expected to be 7.2 per cent over the next five years for the whole Commonwealth2 (higher still in the main Asian economies), against a european zero, or actual shrinkage. The potential advantages of trade and business links between coun-tries with a common working language, similar legal systems and many other familiarising ties were there long ago. But what has galvanised the pattern of transactions recently is the rise of instant and continuous communication, allowing an ease and intimacy across peoples and communities which no other inter-national network could possibly emulate. Take a planet-wide



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common working language, similar legal systems, a new weave of business alliances in friendly and familiar markets, a cross-pollinating stream of educational linkages, scholarship schemes and a plethora of professional associations, and mix all these in with the age of broadband and the internet. An extraordi-nary new trans-continental brew of connections and exchanges emerges, the like of which has never before existed. That is the new Commonwealth case, and it is the reason why so many roads in the chapters ahead lead to and through today’s constantly evolving Commonwealth system.

But are any of these points all that novel? not really. in March 1996, the Foreign Affairs Committee of the House of Commons, chaired by this author, issued a Report on the future role of the Commonwealth. its explicit and central conclusion was that ‘the Commonwealth is acquiring a new significance in a rapidly transforming world and that United Kingdom policy-makers should bring this change to the fore-front of their thinking’.

of course, they did no such thing. A new Labour govern-ment was on the verge of power (1997), imbued with the zeal of converts to the cause of european integration, having swung round 180 degrees from the position under Hugh gaitskell. excited by its newly acquired european faith, this government gave barely a moment’s attention to the Report or its conclu-sions. it had almost no time at all for the Report’s view that ‘the new positioning of the Commonwealth network, and of Britain within that network, has to be seen in the context of growing Asian importance both in economic and now in polit-ical terms in the world scene’, or for the need to recognise, as the Report urged, ‘that in shaping our industrial and trade policies growing interests and opportunities for British busi-ness now lie in the emerging markets of the world of which several happen to be Commonwealth members’.

Far from bringing these points to the forefront of thinking, ministers pushed them to the very back. The official unit within the FCo concerned with Commonwealth affairs, already minuscule, shrank even further. while platoons of offi-cials scurried about the FCo corridors on eU business, the Commonwealth connection was relegated and forgotten.


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the sixth phase

The 1996 Report also illuminated one more key feature of the Commonwealth which perhaps even the government machine could be excused for not understanding at the time, but which turns out to be even more relevant today, almost twenty years later. This was, and is, the sheer size and reach of the non-governmental side of Commonwealth life. The Committee said they were struck by the number of Commonwealth non-government bodies and noted that the directory of Commonwealth organisations at that time listed 43 official Commonwealth organisations and 199 non-government ones. The Commonwealth secretariat subsequently updated these numbers to 46 and 202. They were, said the Report, ‘very much the lifeblood of the official Commonwealth’.3

There the Commons Committee were touching on some-thing the significance of which perhaps even they did not then grasp, and which certainly eluded officialdom. it was that the unfolding communications technology of that time, nowadays multiplied in power and coverage tenfold, was bound to give this particular unofficial global web of great density and world-wide coverage a new lease of life and a powerful new injection of vitality. Ahead, therefore, lay not only a far more important place in British affairs for the Commonwealth, and a far greater interweave between Commonwealth countries everywhere at governmental (and visible) level, but also the empowerment of the unofficial Commonwealth on a multiple scale.

The new pattern now emerging is proving neither partic-ularly Anglo-centric, as the introduction suggested, nor eurocentric, nor even Atlantic-centric, although in practice modern Britain, with the enormous reach of its financial and supporting services, will continue, if it is skilful, as the main entrepôt for growing intra-Commonwealth financial business and capital flows, as well as for global finance generally.

For the peoples of an island kingdom like Britain in this altered world, there are limitless possibilities – possibilities which four decades ago, when Britain decided to apply to join the then european Community and turn away from its tradi-tional global links, just did not appear available or in any way on the cards. official government circles and policy establish-ments may still not have understood how the situation has now



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come full circle, if only because much of the development has lain outside the purview of governments. But away from the public sector, and below the radar of governmental concerns, peoples, communities, businesses, professions and civil society organisations certainly have both understood and reacted. governments may have their disputes and differences, but beyond government, away from the glare of officialdom, the intertwining spreads to every corner of international life.

indeed, governments and states are increasingly confronted by dual interests and priorities, pulling in opposite directions. societies and citizens want maximum openness and accessibility to the global information and connections system. Young people long to discuss everything and anything through the social networks, to push aside privacy, share all secrets. interests, campaigns and causes want total link-up across all national boundaries – all in a gloriously ungoverned environment.

But the state has rival concerns. Predictably, the impulse of those who govern is to control what is purveyed on the network, to limit vice and criminality, and prevent if possible the use of the internet for evil purposes and terrorist activity. These are legitimate and proper instincts, even in the most democratic and open societies. Less democratic and more authoritarian states want this kind of control even more, and exercise it more extensively and less sensitively through filtering, blocking out and crude censoring of the information flow and other devices.

softpower and networks rule

A central international feature of this altered state of things is that it is driven increasingly by what has come to be called ‘softpower’. it used once to be said that trade follows the flag. But that is no longer the case. Trade – and investment – oppor-tunities unfold as a consequence of the patient cultivation of linkages between peoples, cultures and markets, layer upon layer, promoting all the conditions of trust and familiarity on which both secure alliances and good business ultimately rest. now it would be truer to say that it is the new skill, the exer-cising and deployment of softpower, which trade now follows.


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the sixth phase

Bilateral trade missions have their place, but only at the end of the process and after many layers of trust have been built up, usually in areas far removed from trade negotiations and trade deals.

The statistics (where they can be extracted) concerned with trade growth, capital movements, educational linkages and social and professional activities confirm this to be so. what we know for certain is that there are now at least 2 billion people daily on the internet and web systems – by coinci-dence just about the same number as the population of the Commonwealth. even more amazingly, there are now more than 6 billion mobile telephone subscribers.4 with or without the blessings of authorities, the everyday world, in all its mys-terious complexity, is being woven together as never before.5

All this flies in the face of current, but gradually disinte-grating, orthodoxy. nations like Britain, off the coast of the european continent, are still believed to be threatened with isolation and marginalisation unless they join larger blocs. it is supposed to be the age of the big global battalions. influential voices like that of the former prime minister Tony Blair can be heard on the airwaves extolling the virtues of size and equating it with power.6 This, he believes, is today’s raison d’être for the european Union – its ambition to become a world power. economic strength, he claims, goes with population. Therefore, the bigger the agglomeration of peoples, the more clout.

well, maybe that was the way things worked in the twen-tieth century. But is it still the right conclusion today? does population size mean power? is it that simple any more?

This new landscape is not only in a state of constant shift; it is one with many new occupants – not just new states, large and small, but new groupings, new alliances, new non-state powers and linkages, new cyber forces with no allegiance to any state. it is not just multi-polar but also multi-cellular. what is more, it is very volatile. Above all it is a world in which almost all the old rules, relationships, assumptions and assertions no longer apply. novel political forces, not in the diplomatic textbook, now prevail. Thanks to new and still newer technologies, economies, markets and trade flows now seem to operate in completely new ways, with multiple non-tariff barriers far



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more important than visible tariff levels, and export success far more dependent on cultural affinities, professional tie-ups, tailored services, educational linkages and the deployment of softpower in all its new manifestations (see Chapters 6 and 12 for much more detail of what has in practice occurred). A simpler world, in which global ground rules for international trade and economic relations could be hammered out, as was envisaged at Bretton woods in 1946 and in the multilateral institutions set up at that time, has given way to bundles of criss-cross bilateral and regional trade agreements. The overall number of registered agreements (probably well short of the total) has jumped from 70 in 1990 to 300 today.7

within this whirlpool of change, old and simple phrases like ‘the single Market’ simply no longer mean what they did. does the eU single Market really now exist at all? systems of governance have also altered – indeed, traditional patterns of Burkean representative democracy are being distorted, and even supplanted, by real-time voting and the instant interac-tivity of broadband and the mobile phone, now in the hands and at the ears of a third of the human race. it is only one step, already being designed in the hands of innovators, from texting votes for television reality shows to texting (with suit-ably policed identity and anonymity checks) in elections and matters such as public planning issues.8

Meanwhile, on another front, global energy sources and flows have shifted radically, changing the international power balance yet further. Power and resource control are being established and deployed by new methods and by new players. so-called developing countries not only outpace the supposedly developed, but reject the old maxims of western economics as they advance. old lenders become new borrowers and vice versa. Quite suddenly there has come upon the world the realisation that ideas of trade blocs, superpowers, spheres of influence, the third world and other twentieth-century phra-seologies are all now heading for the museum of international affairs. The rituals and great gatherings of twentieth-century international institutions are becoming a kind of harlequinade.

if Britain has a worry about staying at ‘the top table’, then it has to appreciate that in the world of new networks and super


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the sixth phase

connectivity there are many new top tables, some linked, some separate. none has either a dominant or a permanent lease on global power. The world has indeed been turned upside down, and so the mental settings to adjust to it must be as well.

what many who regard themselves as being at the intel-lectual forefront of both domestic and international progress persist in seeing ahead is the continuing integration of old nation states into bigger and bigger units. To them, this has seemed obvious. These respected voices have been at one with both the founders and the latter-day leaders of the european Union, who have sincerely believed all along that big is best and that europe must be propelled into some form of superpower status to compete with and face up to the other super-blocs of the world.

But could they be mistaken? The wind of change is surely blowing in a different direction altogether. Unstoppable tech-nological forces that will work decisively the other way are coming over the horizon, localising instead of centralising and exerting immense centrifugal pressures on all societies and national entities.

Take, as merely one example (there will be many more ahead), digital fabrication – and its full social consequences. This is the new frontier of technology, building on 3d printing, where data can be turned into things, and where materials themselves are digital. Transmitted information may be global but actual fabrication becomes localised and indeed personalised. The outcome is to bring many kinds of industrial activity, once held to demand overwhelming scale, right down to the level of the town, the street, the village, the local community, the home. in essence the route from design to creation of physical objects is about to be dramat-ically shortened. A new kind of consumer-centred localism lies not far ahead. Admittedly, years of development could ensue before, in the words of Professor neil gershenfeld of MiT, complex manufactured objects, such as a drone, ‘can fly right out of the printer’.9 But, he argues, it is not necessary to wait: ‘Although today’s digital manufacturing machines are still in their infancy, they can already be used to make (almost) anything, anywhere.’ weapons have already



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been made by this technology, so have all kinds of machine tool, mobile telephones and, according to the chairman of google, eric schmidt, and his colleague, Jared Cohen, an entire motorcycle!10 digital fabrication is already exten-sively used in architecture and construction and in forensic pathology. Artefacts of almost all kinds can be produced, and the machines involved can of course reproduce themselves or make new machines. Before long this kind of production will be in the locality and in the home.11

The essence of the matter is to grasp that instant and contin-uous communication, or super-connectivity, have given a new meaning to flexibility. Forces and causes can come together and then dissolve or regain local status instantly and frequently. small units can instantly coalesce into larger entities to perform specific functions where size and weight are required. similarly, larger units or groupings can instantly dissolve or be disag-gregated into smaller ones. The village website can combine with a thousand village websites, bringing devastating political push to bear in minutes. The seemingly minor cause, quietly pursued, can erupt into a globally networked campaign over-night. instant alliances can be formed, and cyber battalions enlisted, for instance, to promote a particular trade policy or react to some specific threat or aggression, and such alliances can be dissolved and demobilised just as quickly.

in short, across a huge range of human activities, causes and endeavours, there is no longer any need for massive phys-ical and organisational scale on a permanent basis, whether in social systems, industrial structure or between nations and whole communities. Comprehensive hold-all long-term treaties are becoming an encumbrance. All can now simultaneously be ready to come together in self-organised unity or operate separately as circumstances require. governments and policy-makers have to operate, and think, in two overlapping spheres – the traditional and real, and the digitally enabled virtual.

As will be shown, it is looser and far less official networks – like the modern Commonwealth – that are beginning to look far more suited to these new conditions than tighter and more rigid blocs, cemented together by elaborate and inelastic treaty obligations.


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the sixth phase

of course, small-scale will never win on all fronts against large-scale configuration. The big battalions will have their place, and collective action by nations tailor-organised for specific aims at specific times will have its place. But in the matter of social and political organisation, technology will increasingly be the friend of the smaller scale, questioning the logic and permanence of size and the need for central control, and working against the drift of nations into population agglomerations and power blocs, outdated visions of which seem to fire the unifiers in their search for greater and greater integration into ever-larger physical units.

new technologies such as digital fabrication will pull strongly in the other direction. Localism will pull life nearer to the empowered, web-connected individual, the citizen, the consumer, while supranationalism and big state thinking will pull the other way. it is an unending tug of war. somewhere in the middle will be the balancing influences of nationhood and the human instinct to belong, to have collective pride and purpose, to have identity.

indeed, holding this balance will be the highest task of statesmanship in the decades ahead. And the global structures that embrace both kinds of world are the ones which will grow in strength and influence – the Commonwealth being a good example, although of course not the only one.

we dub this changed and unfamiliar scene, where new forces begin to make a practical impact on events, the sixth phase, because it confronts Britain with the sixth great revo-lutionary cycle in its situation and prospects since the end of world war ii, and the sixth need for a massive change of atti-tudes and directions (see Chapter 2). world conditions have been basically transformed six times since then. At each bend in the road, an entirely new vista opens up, and opinion-shapers become aware of these vistas often much too slowly.

such is now our situation. The intellectual underpinnings of the past orders – the ‘givens’ of the post-war and post-Cold war worlds – have collapsed. Technology has trumped history and geography. in the digital age, size matters less and place matters less. The chapters ahead will be a plea for a fresh realism as the starting point for Britain’s repositioning in the



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global network and for regaining a degree of initiative in a transformed landscape. Along the way, they urge that Britain helps reunite a europe supposedly already united but in reality dangerously divided. And they argue that it is high time for Britain to ‘rejoin’ the modern Commonwealth, of which it is supposedly already the centre and hub, and indeed whose Queen is its head, but to which in practice it belongs only formally rather than in heart and spirit and creative action. These are the tasks that confront us in what turns out to be the sixth great phase or era of change for Britain since world war ii.


3

THe View FRoM THe wATCHToweR

To explain the present, we need the past. Five distinct phases have conditioned Britain’s fortunes in the 70 years since 1945 – Ve day on 8 May and VJ day on 2 september, that warm distant summer of high hopes – five periods in which Britain found itself moving or being moved into an entirely fresh inter-national context, and in which national attitudes, moods and senses of identity and purpose changed accordingly. A sixth phase is now opening out. it is new, it is complex, it involves technologies which few people understand. And it changes our national direction.

of course, attempting to impose neatly labelled eras, turning points, watersheds, defining moments and all the rest on the jumble of past events is always an arbitrary and super-subjective business. others will have quite different views, but as a child of wartime, this is how the pattern looks and has felt to me as i lived through it.

First, there was the immediate post-war world. in those heady days of hope America was Mecca. everything new and bright came from that direction. From the land of rations and utility clothing we saw America as the shining world of plenty. still hidden from one’s youthful view until the late



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1940s and early 1950s, although all the signs were there if one looked hard, would be the final end of the British empire, mostly peacefully except in the blood-soaked india-Pakistan Partition, the Malaysian emergency and the Mau-Mau rebel-lion, and with the high drama point marked by suez, but then with a long aftermath, including Rhodesian Udi (Unilateral declaration of independence) and years later, in almost a final aftermath, the handover of Hong Kong to China. Meanwhile, the iron Curtain had descended and a grey age of shortages was drearily carrying on in europe, but America had saved the world, America was rich, and the visitors from tired Britain came back with the hopeful message that ‘we Too Can Prosper’.1 That was Phase one – the post-war era.

By the late 1950s and early 1960s, a second phase had begun to take shape. Continental europe, lifted by the generous Marshall Plan, started prospering. indeed, the european near-neighbours seemed to be doing better than Britain – strange and unsettling, we thought, since surely the British had won the war. some of the continentals were coming together to form a common market. Jack Kennedy was talking about the two Atlantic pillars. was Britain missing out? The argument raged and the first embryonic thoughts about British involve-ment, even membership, began to form. Britain, said those who knew best, would have to make a choice.

in the 1970s came phase three, the first cracks in the soviet empire, paving the way a decade later for what looked like the grand and spectacular finale of the Cold war that ended – for most – in the tearing down of the Berlin wall. For years before-hand, the signals had been clear that central planning and state tyranny no longer worked. information that things were so much better in the west could no longer be stopped from seeping in. The first features of the coming information revolution meant that technology was simply overwhelming the centralised state control and domination which Communism demanded. Yet some were still surprised and continued predicting the eternal durability of the soviet system even while it collapsed. This would also coincide with the end of the twentieth century’s love affair with state socialism and centralism. They were proving not only ineffective and undesirable, but unnecessary.


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the view from the watchtower

The next and fourth phase, leading into the 1980s and overlapping soviet decline and fall, would be the apparent triumph of the west, America’s unipolar moment, with the european Community expanding across the liberated satel-lite states, the bright Atlantic future between two super-blocs, that shone for a brief period and then began to fade as yet more earth-turning new realities took over. This was the era in which free markets seemed to have won out completely – almost too completely, some said. it was here that Margaret Thatcher found her moment as the embodiment of the new mood. it was where critics and seers like george soros spoke of ‘the bubble’ of American supremacy, which was soon to burst in a swirl of fury and dismay as the limits of power were exposed in the Middle east, iraq, Afghanistan, Libya and a dozen other places.

The fifth cycle in moods, mindsets and public affairs would be the onset of the instant information age, with the rise of Asia, the internet-driven, market-driven e-empowered emer-gence of 3 billion new capitalists, the age of the BRiCs2 – the penetrating acronym which brought my former swiss Bank Corporation colleague, Jim o’neill, such well-deserved fame and fortune. with all this would go the dwindling of western hegemony, of Pax Americana and American global chieftain-ship – again with realisation running years behind reality, and still not perceived or accepted to this day by sections of American opinion. The unipolar moment had gone.

For Britain that ‘inevitable choice’, so insistently predicted, began to look less inevitable. The global context was changing. The conversation of decline became more hesitant.

now it is ‘all change’ again. over the horizon come inti-mations of a sixth revolutionary phase, barely perceived as yet – an assembly of new forces marshalling only half-observed before dawn for a new invasion against minds still stuck in the past grooves – and still busily ‘discovering’ the previous phase even as it fades.

This, the great sixth cycle of fate for Britain since world war ii, is what this book is all about. Just as the previous eras could be seen taking shape long before their defining moments made them visible to the generality of commentators, policy-framers



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and approved ‘experts’, just as ideas about Britain’s position, purposes and interests continued to be locked in the previous phase, just as it took years for the media and the public to grasp the full implications and impact on world affairs of the web and the information revolution, so now the new condi-tions remain largely hidden, largely ignored and still largely misunderstood.

the coming weakness and volatility

Through the mists of future uncertainty, and if we climb to the top of the watchtower, crane our necks and shade our eyes, we can just discern some outlines.

it will be an era of weaker, much weaker, central govern-ments, far more obsessed with short-term popularity, far more swayed by ephemeral opinion polls, pouring ill-digested and short-sighted advice into the ears of political leaders. governments will find it far more difficult to manoeuvre and control either national or international trends. it will be an era of constantly shifting public viewpoints, probably resulting in unstable and constantly regrouping political coalitions. it will be an era in which soft and subtle new influences, outside the reach or control of governments and official machinery, and lying much more in the cultural, educational and private sector spheres, will play a very much bigger role. softpower will increasingly dominate foreign policy and all international rela-tions, just as softnomics (economic processes taking a much broader account of welfare gains and knowledge benefits) will dominate domestic affairs.

it will be an era of unnerving impermanence. interests will constantly need reinterpreting, and alliances constantly forming and reforming to meet new and specific problems –many of them unanticipated. Volatile public opinion will rock governments to and fro. it will be an era in which no state can manage on its own, even America, but in which, paradoxically, no state would be wise to tie itself too closely or too perma-nently into permanent bloc arrangements and permanent treaty commitments. it will be an era of intricate and tortuous supply


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chains across frontiers which make a nonsense of a great deal of national policy thinking. it will be an era without super-powers but one in which smaller states who play their hands well will acquire great significance, well beyond their size. The stronger their internal political stability and economic vigour, the more influence they will acquire.

it will be an era of new networks and alliances, between both states and non-states, with international and multilat-eral sets of initials barely recognised, replacing the old familiar ones. Many of these networks will bypass the Un; some will be regional, some continental, some ignoring geography alto-gether. All will become necessary participants in addressing the main global issues, such as Middle east instability, nuclear proliferation, economic recovery, economic development, maintenance of free trade (if possible) and containment of rogue states. The Commonwealth network, largely under-used, could in fact play a significant part in this new scene.

engaging with this shifting pattern will require great agility, both diplomatic and intellectual, on the part of the British nation and people. A new alignment of foreign policy will be called for. The full range of instruments of softpower influence and persuasion, at every level (governmental and non-governmental), will require to be deployed. new markets, trade flows and capital flows will have to be built up, but these will only work if founded on trust and new kinds of familiarity and mutual respect.

even to label the new players as ‘emerging markets’ gives off a faintly patronising whiff of superiority. Many parts of many of the rich new countries of the globe have ‘emerged’ – some of them considerably further than parts of the UK. Their universities are gaining on western and British rivals.3 Their technologies are advancing as fast or faster. in these circumstances, the old missionary tone of foreign policy will become completely inappropriate. This kind of left-wing imperialism becomes as big a turn-off, and as likely to generate hostility and antagonism, as the earlier right-wing variety. The British attitude, skilfully deployed in the more distant past, has to be that we are neither better nor worse than, neither superior nor inferior to, our new partners and



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new allies. where there was a bad old relationship, a new one now has to be worked for.

At every point the governmental touch will need to be light and respectful, with the real international linkages forming almost organically and mushrooming with incredible rapidity, well away from the government-to-government limelight and connecting at countless informal levels and ‘softpower’ contact points, all barely given a glance by media channels. This is a process the British, when they are thinking clearly and not emotionally, have always been able to manage very well, and scores of British institutions, professions, interest groups, lobbies and businesses are already quietly getting on with it. From architecture to zoology, from bee-keeping to voluntary work, from museum creating to every aspect of design, from medical research and health administration to primary school building, from water management to traffic management, from science to law, from university to univer-sity, from interest to interest, from everything to everything, the guiding geist has to be exchange, each learning from the other, and not – repeat, not – condescending one-way dictation.

Why, in the sixth phase, the old diplomacy and relationship strategies no longer operate

it is not just a question of the number and complexity of modern states. The information revolution means that states are now operating in a new intellectual framework and therefore also operating between each other in new patterns, frameworks and routines (more of this later).

Just as the national or state economy is no longer a machine which can be precisely planned or manipulated, if it ever was, so associations of states and the network of relationships between states are also non-mechanical, non-systematic and non-linear, despite assumptions to the contrary by generations of planners and believers in rational behaviour. (This will be examined more closely in Chapter 5.)

The reality is that national independence has been replaced by total interdependence. Behaviour and trend in any one


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country now affects its neighbours more directly, more swiftly and more intensely than ever before. This is so not just at official and governmental levels, but at a myriad of non-governmental contact points in every sphere from markets and trade to culture and causes, and via every conceivable lobby, professional grouping and interest along the way. This is the world in which real and virtual influences, connections and exchanges become irretrievably mixed.

There is nothing new of course about one country’s actions affecting another. nothing new about the danger when the neighbour’s house is on fire. no man is an island or ever has been. The novelty lies in the intensity and density of the network relationship, in what Thomas Friedman calls its hyper-connectivity. whatever is going on, not just with the neighbours but anywhere in the network, instantly transmits its impact to all the others.

in the network age, a nation’s internal behaviour patterns and experiences may be driven either by copying others or by reacting to the acts and intentions of others, or merely by physical events in other parts of the system. it does not matter which – all are caught up, as never before, in this process of ever-increasing connectivity.

Take Britain’s position in europe. in a sterile and polarised British debate, the status of independence is posited as the alter-native to increasing integration. A country, it is argued, must make its own laws. But in the network age, no such condition exists – if it ever did. The alternative to further political and juridical integration in the european Union is not independ-ence but interdependence, both of laws and policies. There is literally no escape from the network.

This intensity of connections is something new and the implications are not fully understood. of course, nations and societies have been closely reliant upon each other, and closely influenced by each other’s behaviour, since the dawn of the nation state era, and long before that in past ages of fiefdoms and tribalism.

But there was an underlying assumption. it was that a sovereign power broadly had sovereign control. Taxes could be determined, and levied, throughout ‘the land’. As nations took



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shape, laws could be both enacted and enforced according to custom and under clear national direction. safe assumptions could be made, reinforced by economic argumentation and theory, that a citizenry could be governed by measures, and economies regulated by laws, which would produce rational behaviour responses in the sovereign zone in question. As we shall see in Chapter 7, much of the recent debate about the British economy, and whether it can somehow be jolted into a new growth pattern by central government action, continues quaintly to be conducted in the same terms. in the financial columns, solid-sounding measures of national aggregates – final demand, investment, savings, economic growth down to the last tenth of a per cent – are all assigned a spurious and precise reality, and weighty arguments and recommendations then piled upon them, only for it to turn out later that they were wrong in the first place.

in a digitalised world, when almost everyone is connected, this assumption, this view of the national economy as an entity, in fact as a machine to be regulated or a vehicle to be steered, is no longer secure. every action, every intention, is wired with unparalleled intimacy into a global pattern. neither the theory of rational behaviour within one state, nor the assump-tion of rational or stable behaviour between networked states – modern world theories that have underpinned sovereign independence and national economic management, and inter-national alliances and treaty commitments – can any longer be relied upon. Long ago, well before the information revolu-tion age, Jane Jacobs delivered what should have been the coup de grâce to the myth of neatly controllable national econo-mies when she questioned whether nation states, although they might be legal, political and military constructs, were really the salient entities of economic life at all, or really the right starting point for understanding the mysteries of economic development.4 Her message plainly failed to get through to large sections of the economist world, especially to the latter-day Keynesians, who continue to believe in a world which the great man himself would have rightly ridiculed.


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a new kind of diplomacy

These novel conditions do seem to demand additional diplo-matic skills. sensitivity to the international consequences of national measures and actions clearly needs to be heightened to unparalleled degrees. Respect for and understanding of the concerns of every participant in the network, large or small, nearby or distant, with cultures ranging from the roughly familiar to the utterly alien, has to be demonstrated at the most expert and profound levels. every cluster, cell, node or crossing point within the global network has to be analysed and understood. despite the ubiquity of the english tongue, every language and dialect across the planet has to be mastered. Almost all already have their place in cyberspace.

More demanding still is that relationships are not static. system is in fact process. waves have to be ridden if they are not to drown the diplomatic swimmer in the constantly shifting network relationship sea. ironically enough, these changes give representation on the ground in every corner of the planet a major new significance. The fashionable futurology view used to be that networks and electronic information flows would outdate embassies and ambassadors. information would pass between ministers and governments faster than it could be gath-ered and monitored on the spot. The reality and the new need have turned out quite differently. on the ground, connections have turned out to be vital. Relationship diplomacy overtakes transactional diplomacy.

in these revolutionary conditions of intense connectivity, the consequences of any move by any player become harder than ever to assess.

First, there is no guarantee, no safe assumption, that the response to any measure will be rational or stable. Volatile public opinion, being measured and delivered electronically almost by the hour, can put intolerable pressure on elected governments. Reasonably rational and consistent behaviour is the basic assumption of modern liberal economic theory. But it is becoming a flawed one. Because neither consumers or citi-zens in one country, nor consumers and citizens in another



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connected country, nor their governments nor representative organisations, can possibly have full information about any given situation (whereas, of course, economic theory assumes that participants will always be fully informed), instant response, now possible at the screen touch of a smartphone, is highly unlikely to be rational or considered.

second, because measures or steps taken in one part of a network will have been taken by those with limited knowl-edge about the rest of the network, the chances of unforeseen outcomes are very high.

Third, the complexity and speed of modern networks means that impacts and consequences across the system will be of a nature which it is beyond human competence to grasp or manage, or indeed to put in intelligible words. such has already been the dismaying experience of the wisest and most rational planners and regulators within single jurisdic-tions, with the collapse of the soviet system after seven decades of growing chaos being a classic example. what has already demonstrably occurred within states is many times more likely to occur across the network, which wires together dozens of jurisdictions as never before.

Finally, what appears an acceptable and rational response to new laws or measures in one period may become quite the opposite in the next. These variations through time in response are getting shorter and shorter as reaction and feedback times become instantaneous, and opportunities for interactive response ever easier and more plentiful. Volatility of opinion is vastly amplified; the power of persuasion and argument to sustain support for any fixed course vastly weakened. Public opinion, so perceived, which used to shift over weeks or months, can now turn through 180 degrees in hours – which is of course why advice based on opinion polls and so-called focus groups should be treated with ever greater reserve.

These are now circumstances in which the frequency of movement lies well beyond human capacity. whether the arena is the financial marketplace, the patterns of trade and com-merce, the broad forum of public opinion, the fashion trend of academic thinking, the direction of creative arts and culture, the challenges of security, the threats of terror, or the shifting


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sands of faith and belief – in all of these a new fluidity takes them far beyond the power of government. However wise and clever the authorities may be, they can never quite catch up.

in the sixth phase we are now entering the anxieties about roles lost and quests for new ones become redundant. The network system takes over. The task for a nation or society becomes to survive and succeed within a milieu of complete and constant connectivity. The official minds of the recent past have found all this very difficult to assimilate. This is under-standable. After all, governments tend to address, and give priority to, what they can see as lying clearly in the govern-mental sphere. departments tend to think about issues that appear to be unambiguously within the departmental parish. The starting assumption of government machines must be that they are in charge and have the power, even if the facts increasingly contradict this mindset, and even after power has slipped away.

in the international sphere, this helps explain why govern-ments cling so tightly to ‘existing arrangements’, existing procedures, existing treaties and alliances, existing institutions. it explains why officialdom likes to return, especially in matters of foreign policy, to a default position that fits comfortably with the past. Immobilisme is a necessity. An alternative world in which forces operate, events are controlled and relation-ships shaped outside the purview of government and national administration is not only deplorable but unimaginable.

Yet it now exists.

Last days

in the summer of 1944, my father was working in the under-ground war Cabinet rooms, secret work about which of course we knew nothing. He would return each weekend to suffolk where we were staying with my grandfather, having been evac-uated from London. This was just as well because our rented house in Hereford square, no. 2, had taken a direct hit from a stick of bombs, and the remains had to be bulldozed away to make space for post-war replacements.



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on 16 August 1945 the war Rooms were closed, the lights turned out and the doors locked. The previous day the Japanese emperor, explaining that the war had not gone entirely to Japan’s advantage, announced his country’s surrender (it was formally signed on the USS Missouri 18 days later, on 2 september).

My father was on duty that last day. He recorded infor-mation coming in that two Mitsubishi Zero fighters had been shot down that morning – presumably the pilots having not got their emperor’s message from the day before. (other Japanese military personnel of course never got the message at all, and remained on a war footing in the jungles of south east Asia for decades to come.)

Twenty-five years later, when i had an office a few floors above, i asked to see the still closed war Rooms downstairs. At this stage they were still exactly as left. Cobwebs and dust had spread across the desks and the tea stands, Miss Havisham-style. Hoarded sugar lumps were in the drawers, with stubby pencils and unused notepads. duty rosters were on the wall.

in the last days of operation it had been ernie Bevin, by then Foreign secretary in a new Labour government, who bellowed through the supposedly sound-proofed door of the secure transatlantic telephone booth. Churchill, who had spent so many hours there throughout the war (although he never slept there), padded about no more.

A new world was unfolding – harsh, cold, desperately hard to adjust to and full of unforeseen challenges – for Britain as much as for many others. Being the victors made no differ-ence – in fact, the conquered states soon seemed to be doing better. Changes in Britain’s world position, its direction and its fortunes lay ahead which Churchill and his colleagues could not possibly have imagined.

now, almost seven decades on, the international landscape, already altered beyond recognition, has shifted once again. Power is in dispute – within states, between states and between regions, between governments and non-governments, those within national laws and systems and those without, network against network. Just as all those years ago, there are plenty of


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long tunnels, and not much light at the end of them. Yet for a resourceful country like Britain there is a way through, as there was before. The initiative can be regained, the role established, the sense of drift banished. The basic requirement is to know truly where we are, to know what is truly happening, and to grope through the thick fog of past assumptions, delusions and invalidated beliefs until the outlines of our new position and new opportunities become clearer.


4

oLd LinKs And new Ties

Pope Benedict xVi, now Pope emeritus, moved round the room, murmuring and repeating ‘Fifty-four countries’ as he went, a swirl of hovering attendants encircling him. A few moments earlier, when he had clasped my hand, i had explained that i was British Minister for the Commonwealth, the vast english-speaking network across all the continents, with its 54 member states, covering almost a third of the human race. i could not help thinking that while his flock, the global Catholic network, might be big, the Commonwealth was even bigger and that the two might work together in many areas of the world.

Benedict xVi, his successors and the princes of organised religion will now, like the rest of us, have to work out how faith, doctrine and belief link in with the virtual world. worldwide interactive information systems are already working two ways – towards the powerful dissemination and sharing of doctrines, but also towards questioning and challenging of traditional hierarchies of belief as never before. Can centres of authority hold in these transformed conditions?

Harold Macmillan’s pessimistic musings about London as the old Athens and washington as the new Rome have gone. why? Because in a network world there is no established,


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old links and new ties

reigning Rome, no top-dog nation, no superpower. And no member of the network is isolated. All are connected in one way or another and the acts of each one send signals, tremors and pressures through the network to all others. And of course networks have no centre, although they have thicker and thinner links and bigger and small nodes, and connecting points or hubs. in a network world, every country struggles to be a hub. every great city aspires only to be Rome for a day.

All this is proving difficult to assimilate. on both sides of the Atlantic a crust of certitude has built up in opinion-forming circles so thick, and so resistant to new perspectives, that the glaring realities of an utterly changed international landscape, and in consequence of national governmental agendas, have been ignored, swept under the carpet, bypassed or hurriedly locked away for fear of upsetting conventional thinking.

when, to my amazement, i was asked to return to govern-ment – for the third time – and enrolled as a Foreign and Commonwealth office minister, at the outset of the 2010 Coalition, after more than a quarter of a century out of office, i wondered what specific and fresh contributions i could best make to our country’s interests and future.1

That of course was over and above my almost daily task of being required to answer an unending stream of questions in the Lords – a legislative chamber stuffed with foreign policy expertise to a degree unmatched, i believe, by any other similar assembly round the planet.2

My pondering was soon answered when the new secretary of state, william Hague, assigned to me what he called ‘the issue of your dreams’, namely the Commonwealth, together with responsibility for international energy issues – a subject for which i also had some sort of track record.

These two areas may sound disconnected. But in reality, unfolding world developments are weaving them together. in fact, they cover two of the central issues of British foreign policy in the twenty-first century, and are set to become nearer and nearer to the heart of our purposes, our well-being and our whole future, as the century proceeds.

First, though, a brief summary to clarify what point on the journey we have now reached and which course we must now



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set. we do now appear to be facing, and must surely rapidly adjust to, a totally new pattern of international power, influ-ence and trends. governments and networks now have to share power as never before in history. in the new digital dispensa-tion, the west is unarguably less dominant, although by no means permanently relegated (as we shall see), and the great cities and economies of Asia, both Central and Pacific, of Latin America and now Africa are on the rise. Their social systems are increasingly e-enabled but operate differently; their work ethics are not ours; their politics do not fit traditional western patterns; their goals, ambitions and attitudes are different – and endlessly variegated.

There is a residual tendency to divide this new world between ‘The west and the Rest’ – the rest being the ‘emerging’ powers of Asia, Africa and Latin America. events are now turning this worldview on its head as it transpires that the driving forces of economic growth and technological innova-tion are increasingly located in the latter – the Rest – grouping, with ‘the west’ having to scurry along to pick up the crumbs!

For the British the prime task is to reset their attitudes and policies in the new landscape, to make maximum use of their extensive, indeed unique, skills, talents, experience and connec-tions – so as to at worst protect existing interests and national welfare, and at best further and promote these interests and maximise the British contribution to global goals of peace, stability and genuine development and escape from poverty. The warming thought is that through accumulated (sometimes very bitter) experience, and through history, the British, with luck, are going to be rather better than most at the adjustment required, providing, of course, that nerves are held, confi-dence maintained and government does not again get ‘blown off course’ by some of the notions, fallacies and errors this book explores.

Britain’s grand purpose must be to stay solid in its rela-tionships with America and the eU neighbourhood, but also to reach beyond and make its old friends its new friends by strengthening links determinedly, at all levels of contact and exchange, with the new centres of power and influence, notably in the Middle east and the gulf, in Central and east


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Asia, in Latin America and in the booming markets of south east Asia. Britain has to be quick off the mark in recognising the new centres of influence – often in localities that used to be regarded as peripheral and largely ignored or viewed as tiresome problem areas. To do this, Britain will need to use every available network and some more. And it should always try to proceed with full respect for the interests and dignity of nations large and small across the globe who look to the British as friends, partners and providers of welcome affection and support – always on equal and not in any way patronising terms. After all, at the Un, where the smaller countries feel ineffective, they still have one vote each, and that can be useful.

This instinct to respect, almost to defer to, the customs and values of other societies, is something the British have acquired through time and long experience – some would say after trying quite the opposite in early imperial days – and this is what ought to give the British a head start in the great adjust-ment now required. However, a clear grasp of this point is by no means prevalent in all quarters. Regrettably, the lecturing and hectoring still goes on in some areas, laced with tones of superiority. others are instructed to adopt Britain’s allegedly perfect models of behaviour, its perfect values and perfect ways of government, even though from a distance these ‘perfect’ values seem to have collapsed and the ‘perfect’ forms of govern-ment appear increasingly shaky.

The trap is to allow the sensible and necessary task of upholding our own principles and values (where we are not doing all that good a job) to become hopelessly confused with trying to thrust them on other societies and other cultures. Peoples and cultures across the world are increasingly devel-oping their own networks, rather than being subordinated to western-flavoured systems and the values and assumptions embedded in them. western lectures are received, usually quite politely, rather as one would receive ghastly gifts and souvenirs one has no idea what to do with, before being put at the back of a cupboard or kept for the next tombola.

Amidst this scene of tensions and new thinking, an obvious and key network in making new connections of the right kind now needed must surely be the 54-nation Commonwealth,



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embracing just under a third of the human race, approximately a fifth of its gnP and a score of the fastest-growing markets in the world. This is where geography can be put aside and the immense power of digital systems, using common language and familiar practices, takes over. Yet although this clearly is a huge asset for the UK, it continues to amaze as to how little this is understood by many in the generation and circles who have been brought up to think that the Commonwealth is a relic of yesterday and that our destiny lies inside the european bloc. The Commonwealth is not only a network, both real and virtual. it is also a gateway – to Brazil and Latin America, to China, through Australia, as well as through British-flavoured Hong Kong (which still interestingly sends representatives to meetings of various Commonwealth family organisations and boasts an active Royal Commonwealth society branch, despite being part of China) and to the opening markets of Central Asia.3

interestingly and surprisingly – to some – the Common-wealth network is a link both to Japan, still with 9 per cent of global production (which regards the UK as its best friend in europe – and whose industrial leaders realistically seem no longer to mind too much whether Britain is in or out of the euro currency, as once they certainly did),4 and to the vast purchasing power and friendship of the gulf states. The tricky part here is that while our values rest in democracy, there has to be some readiness to interpret democratic trends in an understanding and flexible way, rather than use general-ised assertions about westminster/Jeffersonian democracy and party politics as though they contained the full meaning of the democratic process (more of this near-fatal misunderstanding in Chapter 7).

As for our existing friends, the British Foreign and Commonwealth secretary william Hague’s long-standing twin adages provide two struts of the overarching framework – ‘solid but not slavish’ in relation to the UsA and washington, and ‘in europe but not run by europe’ in relation to Brussels and the eU. This leaves Britain well-positioned with old friends, but fully ready to make new ones and link itself securely into the immense new networks, markets and trade flows


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that stretch beyond europe, beyond the UsA and beyond the Atlantic west.

‘Beyond’ is really the key word. Perhaps there is a place for a third adage – since our interests, destiny and very survival are now going to depend on this ‘beyond’. Maybe ‘well connected with all’ would do, or some such wording, to indi-cate that setting sights beyond europe and America does not mean marginalisation. it means integration, but of a different and more comprehensive and effective sort than european integration. it means being embedded as partners in the inter-dependent global network system as never before.

it is 60 years since dean Acheson, in that cutting phrase, declared Britain a wanderer, its role not found (see introduction). now that this new role is becoming clearer by the day, spelled out for us by the dictates of the information revolution and the totality of global interconnection, a bold, insightful and wise leadership is needed to give it substance and momentum.

the argument so far – a recap

every trend and new realisation takes decades to dawn and mature, and fit comfortably into public thinking and popular ideas. it was schopenhauer who said that all truth passes through three stages. First, it is ridiculed. second, it is violently opposed. Third, it is accepted as being self-evident. in grasping the new truths about the way the world now works, we are about halfway through the process.

Thus it has taken 20 years for popular comment to catch up with the realisation, obvious from the late 1980s, that power was shifting away from the west – and the same length of time for the understanding to sink in that the information revolution alters radically the role of states, the power of governments and the character of democracies.

To grapple with this paralysis of thought and commentary, to break out, to find the therapies and treatments which will repair and re-energise, it helps to start by recapping the major elements, or building blocks, round which and on which British current foreign policy needs to be reshaped, so as to form a



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communicable and appealing narrative. Their co-ordinates are right now, even while we grapple with them, determining and shaping the position and direction of the UK for years to come. To a worried public they present many bewildering facets.

Yet when set in broad context and stitched into one tapestry, they ought to offer reassurance and hope. The more coherently they are presented as part of an overall picture, the stronger any British government will be in meeting the demand (sometimes critical) for a clearer foreign policy vision in face of stormy world events.

what will this picture look like? Later chapters will fill in the brushwork, but here is the first pencil sketch:

• Markets, wealth accumulations, influence and political power have all shifted – partly to non-western governments and states, partly to non-state actors, but all shaped alike by the total connectivity of the digital age.

• The world is now one of networks, not blocs (vide the prime minister david Cameron at Mansion House, november 2011, and the Foreign and Commonwealth secretary, william Hague, throughout his 2010–11 speeches), with proximities and webs of culture, language, laws and atti-tudes becoming more crucial to our security and prosperity than proximities of geography. network connectivity creates new degrees of immediacy and intimacy between states, with which neither traditional diplomatic procedures nor traditional media coverage of international affairs can easily cope.

• nevertheless, europe remains our immediate neighbour-hood, and we have to secure and maintain a settled and comfortable relationship within it. Britain has to find its most advantageous role in the changing european scene. That is the most immediate national policy task, absorbing huge amounts of time, political energies and print. But the eU is full of headaches, and the integrationist model is under growing strain – and will probably fail to solve the current dilemmas in the eurozone, which is structurally flawed in its present extended state (see Chapter 4).


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• Far from the UK being ‘isolated’, ‘marginalised’ or ‘out in the cold’ (as persistently argued by Tim garton-Ash, Philip stephens and other luminaries, by experts from think-tanks such as Policy network or the Centre for european studies and a host of others), the opposite is the case. This is our opportunity for closer integration in the global system. The next two chapters will examine in detail why this is so and why the marginalisers are out of date.

• The old British relationship with the UsA is no longer the right one. The American economy succeeds while American foreign policy fails. while the dynamic renaissance of a new low-energy-cost America lifts the world economy, the confusions and bewilderments of American foreign policy, in the face of fragmented enemies and hatreds, need to be more deliberately and firmly avoided. The UsA remains Britain’s strongest ally in the traditional military and secu-rity senses, and a vital buttress to the global economy. But global secur ity is coming to depend increasingly on new influences, pressures and alliances that we have to cultivate, using the full diplomatic and softpower armoury. The world wants strong American partnership, not constant insistence on taking the lead in reordering international affairs.

• The great new twenty-first-century areas of growth and dynamism, the new sources of influence, wealth and trade, and the new consumer markets, now lie outside the eU and outside the north Atlantic sphere (with the exception of Canada, now becoming a major energy power). we have to secure good access to these new markets and group-ings to survive.

• The Commonwealth network – or ‘family of people in the truest sense’, as Queen elizabeth put it in her 2012 Christmas message – is one of several potentially advan-tageous routes into the new growth markets and high technology zones of Asia (Pacific, south east, Central and near), and increasingly of Africa as well. indeed, the African story is taking an entirely new turn. seen until very recently as an unending parade of stagnation, corruption and poverty, the new Africa begins to move into the wealth creation phase, lifted partly by new resources and partly by



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the spread of better governance and new perceptions about the mainsprings of development.

• Britain’s ties with Latin America, once so close, now need to be refreshed. The Falklands issue hinders progress but should not be allowed to poison it, even with the ill-directed and ever quarrelsome Argentinian leadership.

• equally as important as the fostering of all these new network linkages is our national ability to stay at the fore-front of communications and creative technologies, and to think laterally in policy terms. The greatest ‘single’ market is probably now in cyberspace and on the web, rather than in the european Union or any other bloc or old-style hier-archy. To be at the forefront in the skills required for this repositioning demands a massive upgrade in our educa-tional and training systems.

The salient and obvious point from this rough outline is that a eurocentric policy for the UK will no longer do. Britain’s ‘destiny’ surely now lies in bigger hands and wider direc-tions. indeed, it is already being determined by much more diverse influences and pressures than membership of the european Union.

in pure trade flow terms, we export 27 per cent of our gdP, of which some 40 per cent (according to the CBi) is said to go to other countries in the eU, although this is affected by desti-nation distortions – that is, that goods marked for export to the netherlands are actually destined for onward shipment to non- eU customers – the so-called netherlands factor.5 Taking this into account, together with other re-export factors, and with goods going through other eU destinations to non-eU final cus-tomers (e.g. Rolls Royce engines for Airbus), this means that about 9 per cent of UK gdP depends on eU markets. A col-lapse of the eurozone might reduce this temporarily but would certainly not wipe it out. with the international Monetary Fund now predicting that by 2017 the eU will have only 17 per cent of world output, and the present eurozone countries only 11.9 per cent, the wonder is that an area so small in world affairs has been so dominant and utterly preoccupying for the British, almost to the point of shutting off a worldview.6


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with the changed global economic balance the high impor-tance countries outside the european neighbourhood – for the UK – are still the UsA, but also China, Japan, Turkey, Mexico, Korea, Brazil, the Central Asian states, such as Azerbaijan, Mongolia, indonesia and south east Asia generally. Add to that list the whole Commonwealth network, especially its coun-tries with large high-wealth components and enclaves (notably Australia, new Zealand, Canada, Malaysia, india, nigeria, singapore and south Africa) and its sparkling newcomers – economically, that is – such as ghana, Papua new guinea, Mauritius or Mozambique.

Between the eU and these expanding markets, the balance is changing fast. Forecasts tell us that most of the demand and market growth for the next two decades will come from these non-eU sources. indeed, documents like BP’s outlook 2030, based on vast amounts of data, suggest that between about now and 2030, 70 per cent of all world growth will come from not just non-european sources but outside the oeCd coun-tries altogether. what they call the low- and medium-income economies will be the rapid growth centres – that is, excluding europe, the UsA, Canada and Japan.

if one looks at capital and investment flows, the picture is tilting still further away from europe. The main sources of British inward project investment today are the UsA (still by far the biggest), but with india, Japan, Australia, Canada and China coming on fast (source UKTi 2010–11 report). Less visible, but possibly even greater, are the inflows from the various major sovereign wealth Funds (notably from Kuwait, Qatar, Abu dhabi and norway, but again others are coming along – e.g. Algeria). it is these colossal capital investment flows washing into and through London’s financial centre (many of them unrecorded), plus outward investment, that are radically reshaping our economy while we watch, since trade tends to follow investment, acquisition and asset ownership, themselves following on from ‘softpower’ influence and degrees of mutual trust and confidence.

in security terms, the same kinds of attitude and priority shift are visible as on the economic and trade fronts. There can be no disputing that America remains the most powerful



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hardpower military nation, and the largest source of raw infor-mation – through surveillance and electronic devices.

But in a world of dispersed power, cloud information stores and e-enabled non-state threats, new instruments and tech-niques of influence and persuasion are required to underpin security, and prevent the exercise of hostile force against British citizens and interests. we need the ‘camaraderie, warmth and mutual respect’ of other countries (words again of Queen elizabeth, Head of the Commonwealth) which our over-identification with American policy and approaches fails to deliver – in fact, in some areas it actively repels this.7

instead, Britain will rely increasingly for its security on its own new network intimacies in such fields as local govern-ment, educational links, language links, cultural connections, parliamentary links, common judicial practices, common law similarities, common professional and administrative stand-ards (viz. in medicine, science, accountancy, advanced research of all kinds), civil society networks, religious and faith ties, the enduring power of ideas and innovation in all fields, and every kind of service and design package that our creative and orig-inal thinking can generate.

This is not to suggest for one moment that the age of insur-gencies is over, or that irregular warfare, tribal and ethnic hatreds, spilling over into generalised conflict and hideous civil wars, will all melt away with the application of diplomatic balm. of course not. But the overlay of total connectivity, and the new pattern of power distribution it offers, will more and more affect the course of military affairs, bringing the hard world of violence and combat into an increasingly subtle and complex connection with softer kinds of power deployment.

each of these major shifts in the landscape substructure will be expanded in chapters ahead. Meanwhile, we can begin to assemble the first pieces of the new jigsaw, to string together the outlines of the narrative for Britain which is taking shape out of all these trends and developments.

in a highly connected but also highly dangerous world, in which we need to compete more intensively than ever – even to survive and maintain current standards, let alone rise higher – we will need to maximise all our new advantages


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that globalisation and the continuing information revolu-tion provide.

This means adjusting Britain’s position to the new interna-tional realities – and articulating clearly what is being done. it means demonstrating to the public at large that the British nation collectively has a purpose and direction in the new circumstances, and that it can satisfy the domestic aspiration to ‘belong’ (so evident in most parts of British society), bind the whole UK together, and offer a homeland towards which all people, including minorities, feel a sense of loyalty and in which they can take pride.

Like ‘rebalancing’, ‘adjusting’ is a nice easy word for planners and politicos. it glosses smoothly over formidable difficulties and challenges. in the new situation we face the task of remaining good and constructive europeans – despite the current popular mood in Britain – and, indeed, of taking the initiative with new proposals for eU reform which can win wide support from fellow members. These may actually include closer collective european action in some areas, although ‘less europe’ in others. either way, a bold challenge to outdated integration dogma is required, and bold promotion of new and more flexible patterns of european development rooted in the concept of differentiation (see Chapters 4 and 5).

‘Adjusting’ also means repositioning the UK as a global network player and partner, building with all we’ve got upon Commonwealth and other strong networks and bilateral links outside the Atlantic area. it means deploying with confidence, and in moderate and not bombastic tones, our exceptional British qualities, historic associations, english language strengths and worldwide cultural influence to our direct advan-tage in rising Asia, Africa and Latin America. And it means using the full range of softpower techniques (new and conven-tional) to protect and promote British interests across the planet.

Filling in the missing story

in the immediate present and future, no one (or no one who is reasonable) expects ministers and governments magically to calm the economic storm or still the waves, but below decks



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there is a longing for reassurance, for a voice from the bridge that the atrocious conditions will be weathered and that calmer waters and a welcoming port lie somewhere ahead.

The international scene, far from settling down in the 20 years or so since the fall of the soviet Union, has erupted into more and more instabilities. everywhere protest is organised and amplified by communications technology and the social media. Frightening stresses and dangers abound on every side in the Middle east. At the time of writing, there is absolutely no end in sight to the killing and the horrors – especially in syria, but not only there – despite the high hopes of the Arab spring. on the contrary, the syrian saga has fast slipped back into a kind of west-versus-east confrontation, in defiance of the new realities. At this time the one hope of a digitally connected world – that Russia and China would co-operate fully with other nations to contain the fast-spreading poison of syria’s bloody civil war as well as its chemical weapons deploy-ments – looks like it is being allowed to slip away.

Meanwhile, the egyptian future is in doubt; iraq remains unsettled and soaked in violence; unease spreads into Jordan; the gulf states are rattled by the unending turmoil in Bahrain; the suspense over iran and what the israelis might do next is nerve-wracking. in China the great economic machine is visibly hiccupping and slowing, with tensions accumulating – or rather, welling up again – between China and Japan. The United states, even under a second-term President obama, is still lost in confusion about its changed role and status, still seemingly infected with the itch for world leadership in an age which needs partnership (as Chapter 6 describes more fully).

Finally, the great european market, Britain’s erstwhile mainstay and the hope of 1972, is stagnating, and is forecast to stay that way. Voices among european leaders contradict each other in the eurozone, like the etruscans at the Tiber bridge, with those behind crying ‘forward’, to ‘more europe’, and those who are being pushed at the front – the hapless Mediterranean economies – crying ‘back’ and begging for the pressure to be eased before riots bring down the whole edifice. As we shall see in Chapter 6, the so-called internal revaluations in the Mediterranean countries are bound to


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perpetuate instability, both economic and political. The euro crisis continues.

Yet there is a message to be distilled out of all this – a message particularly, indeed almost uniquely, favourable to Britain. To repeat, the essence of it is that we now live not in a world of power blocs and superpowers, but in a world of networks. That is what the microchip and the worldwide communications revolution have brought about.

nowhere is there a better ready-made and more amazing worldwide network than the one of which by glittering good fortune Britain finds itself right at the heart, giving an entrée to precisely the places, markets and wealth centres we want to be heard in, co-operate with, trade with and generally have a strong presence in – namely the Commonwealth. it is what the Queen has described – with a percipience too many of her subjects seem to lack – as ‘in many ways the face of the future’ or ‘a family in the truest sense’.8

The modern Commonwealth is now teeming with millions of middle-income consumers generating huge wealth for investment (much of it administered in London) and offering a golden gateway to the giant new markets beyond – China (through Australia, and still through Hong Kong from inside), Brazil (through Trinidad) and the Middle east.

no wonder a queue is forming of countries that want to tie in somehow with this new Commonwealth, as it appears to be becoming the international club of preference in the twenty-first century. it is the extended family grouping that may have its quarrels and backsliders at government level, but that generates a constant pressure for enlarged democracy (in all its forms) and more entrenched human rights, and brings peoples together like no other multinational institution (details in Chapter 11).

Already vast new markets have emerged in Asia and Latin America, and now are opening up in long-neglected Africa. while europe flatlines, all around the globe brand new performers are entering the fast-growth league. Already, UK exports outside the eurozone exceed those inside it.5

it is not just a question of Asia and the southern world awakening, with their megacities of the future, their cultures,



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their values (often superior to ours when it comes to family cohesion and education), generally pulling ahead of us in enter-prise, new technology and wealth creation. That’s long since happened. Those schoolbooks about capital flowing from the west into the developing world are history. The wealth, as well as the research and technological skills, has long since been flowing the other way, with the debt-laden western ‘powers’ now turning east and south for desperately needed investment and capital from the massive savings and the huge sovereign wealth funds of Asia. it is now from india and China that we have so much to learn, not the other way round. They certainly don’t want lectures from us.9

the resource revolution

Yet even this world-altering ‘easternisation’ scene is being over-taken. A new revolution in resource recovery techniques is bringing oil, gas and mineral deposits within commercial reach on an undreamt-of scale and in some areas that previously felt left out of the globalisation bonanza. it is already working miracles in the United states itself, where cheap ‘shale’ gas and oil are bringing back energy-thirsty industries from Asia and creating thousands of new jobs – all of which are proving to be the saving of the Us economy. Meanwhile, the big switch in the UsA from coal to gas is bringing down greenhouse gas emis-sions much faster than in europe. (see Chapter 9 for the full implications of this miserable trend, largely engendered by the opposition of green zealots to greater use of gas.)

The resource revolution, bringing into commercial reach enormous new oil and gas deposits, has not only set America on the path to energy independence and cheap power, but has also further strengthened already energy-rich nations like Australia and Canada – two of Britain’s most stalwart friends. They are being followed by a whole raft of new players such as Mozambique, Tanzania and Kenya in east Africa, and in west Africa, ghana, sierra Leone and of course the nigerian giant, which will soon be overtaking south Africa if it can cope with internal turbulences.


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one common thread that binds most (if not all) of these potentially rich newcomers and old friends is Commonwealth membership – the network reaching far into everyday life, customs and attitudes – a good many of them originating in Britain. if, in the information age, softpower is increasingly becoming the means of advantage – promoting brand, reputa-tion and interests and hopefully trade, as well as winning allies and subduing hostility – then here for Britain is the softpower network to beat them all. no question of trying to resurrect Pax Britannica; that’s long gone, as now has Pax Americana. we are just one member state out of the 54 with plenty to learn from the others as they expand their trade and investment links, not just with us but with each other.

For Britain, once it has navigated through the present dangerous seas, it means the nation’s luck will be in – unless of course we throw it all away. Britain will be sitting plum in the midst of the world’s best network, both digital and real; it will be a safe haven, even more than it is now, for the world’s inves-tors; it will be increasingly well-placed in terms of resources and energy supplies, with the ever-friendly norwegians wanting to pipe over unlimited quantities of gas and with chains of frozen gas ships seeking our custom and sailing in, mainly now from Qatar and from Algeria, but a little while ahead also from the new rich African states, such as Mozambique and Angola (another seeker of Commonwealth tie-ups).

But what can be seen is just the tip of things. As with an iceberg, it is what lies below that makes the Commonwealth so supremely relevant in the internet age. it is the Commonwealth’s myriad non-governmental arteries, its incredible membrane of links at every conceivable level, from language and legal systems, to schools and universities, to medicine and account-ancy, to science and climate and energy issues, to sport, to almost every profession and cultural interest, and increas-ingly to every sort of business and trade, that ties this network together and makes it an open avenue to the new powers and markets which we simply have to penetrate just to survive, let alone improve our fortunes.

so that is the good story of where Britain is going as a nation: the purposeful and hopeful prospect, worth recounting,



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even while the cold wind of recession still keep gusting around us. it means that in the totally transformed world ahead, Britain is promisingly placed to become the networking nation par excellence.


Part II

Lifting the Barriers



5

The Age of Delusions

if the outlook is relatively positive, if old and negative assump-tions are being pushed aside by new opportunities, why is Britain still wrestling with so much disillusionment, and why is it still so widely assumed that the immediate future will mirror the recent crisis-ridden past? in his memoirs, John Buchan – author of The Thirty-Nine Steps, Greenmantle, Prester John and other timeless thrillers, but also a statesman and thinker of the highest calibre – has a striking phrase. it is that ‘in the cycle to which we belong we can see only a fraction of the curve, and that properly to appraise the curve and therefore to look ahead, we may have to look back to its beginnings’.1

looking even a short way ahead is even more difficult now than it was for John Buchan (lord Tweedsmuir, as he became). The thirst for even a little illumination of the future has never been stronger, but the difficulties of predicting have never been greater. To claim, as one national leader has, that one inch ahead is total darkness is perhaps being too austere. however, all the old verities are without doubt crumbling. it has become an age of impossible dilemmas, all-pervasive uncertainties, insoluble quandaries, puzzling paradoxes. Conditions of flux, dispute and indeterminacy extend to every level from the most



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personal and intimate to the loftiest international and global, from the blurring of old simplicities like the difference between right and wrong, and the virtues of family and marriage, to the global uncertainties as power is repackaged and redistributed away from the twentieth-century order.

for example, we do not know whether societies will hold together, whether individual nations will hold together, or whether violent chaos and unending civil war will be the fate of whole populations and states in, for example, syria, or egypt or iraq or iran. We are not even sure whether the european union in its present form will survive, let alone the euro currency.

The great international questions are there, but none of them have answers. how can islam possibly conquer the world and bring a new Caliphate? of course it cannot be done. how can the West begin to compete with the fervour and vitality of islamic youth or the energies of teeming Asia, or rising Africa or reawakening latin America? of course it cannot do so, or at least not by past methods. how can the glue of social cohe-sion in country after country somehow hold? how can Arab turmoil lead to political and social stability? so far the opposite is happening. how can open societies ever protect themselves against the random and twisted fury of terrorism, whether practised in copycat style by ‘radicalised’ individuals or as part of deadly and fully organised terror groups? how can governments, democratic or autocratic, keep control as power trickles away to elsewhere and everywhere and nowhere? how can paralysing cyber assaults be deterred when the attacker is neither a state nor a recognisable entity and has nothing to lose? how can 7, 8, 9 billion people be found room to exist, to be fed, to have access to essentials, half of them now packed into swelling megacities?

obviously there are no general or formulaic answers. That indeed may be the answer – that there are no settled positions to be reached, no new fixed patterns to be established. All that striving after so-called solutions, settlements, outcomes, completions of unfinished agendas, may be misdirected. utopia is not available. Maybe the panaceas are just not there. Constant flux and constant striving, debate and renewal, with the accompanying need for constant innovative thought, may


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the age of delusions

be the only norm – whether in moral, social, cultural, economic, environmental or security and cyber issues, or any aspects of the current international order (disorder). Maybe the mindset is wrong. Maybe in a completely interactive world of total and continuous connection – linking even to the poorest, even to the most remote – flux is the normal state, and the search for solutions, stability and settled relationships is in vain.

The focus here is on one aspect of this totally restless scene – namely how in insecure times and in this blizzard of new uncertainties, in which the contours of the whole international landscape are in upheaval, a sufficiently alert, well-led, agile, shrewd, perceptive, comprehending Britain (‘fly’ we would call it in the army) can adjust, stay afloat, play a useful part and even prosper.

roadblocks

But all sorts of roadblocks sit in the way of a clear view ahead. The path is strewed with policy misconceptions, popular delu-sions, myths of great strength, deeply embedded interests determined to resist change and great follies marching on (of which more later). some but not all of these will have to be shoved aside and a lot of enemies will be made in the process.

some myths are always needed by society. not everything is explicable or even graspable by the human mind, or can be put into language. Taboos have a purpose. They may become outdated, but not all of them should be broken by intellectual vandals for the sake of it.

The starting point must be to recognise what is really occur-ring – not, as so often, to extrapolate from what happened yesterday and is still being reported as today’s set of issues and problems, but at the really new underlying forces now at work. Most of these now tend to fracture states and societies to a degree not known before in modern history, many of them simply not yet on the radar screens of world policy-makers, advisers and commentators.

indeed, the new international scene, both real and digitally connected, is still mostly unmapped. foreign affairs ministries



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round the world, as well as in london, like to be guided by carefully graded hierarchies of states, in descending orders of importance, all painstakingly assessed, analysed and sifted by size, likely impact on national and domestic interests, threat potential, internal stability (as perceived from outside, and often wrong), market opportunities and other criteria. Yet such lists are hardly drawn up before they are out of date as the kaleidoscopic scene shifts, old assumptions are up-ended, old links broken and new ones formed. new states spring up (there are now 196 represented at the united nations, as opposed to 100 in 1970); new alliances and clubs of states and interests are formed. former peripheral states become central and vice versa. The old lists and hierarchies become jumbled up and out of date almost before the ink is dry or the printer has spewed out its first page.

The multinational institutions of the last century – the ones with the most familiar initials like nATo, the un, the iMf, the eu – are now all struggling to adjust. new sets of initials are swirling in the international alphabet soup – oiC, sCo, Au, gCC, Al, unAsuR, sAARC, AnMC, Pif, CARiCoM and many more.2 Procedures, attitudes, organ-isations and institutions have only dimly begun to reflect or adjust to what is happening – most of the media, with some brilliant and insightful exceptions, hardly at all. in a world of networks, relationships emerge of quite a different quality, priorities are reshuffled, new elements, previously ignored, suddenly come to signify something. in a digital-ised network system, everyone has to be kept in the loop. More than that, the networks become part of the legiti-mising process. Agreement for international action at the united nations has to be supported by agreement across the networks. All have to be consulted, won over and brought along, because all are now instantly and in most cases contin-uously connected.

All this is very recent and has come upon the policy-makers very swiftly, leaving most people, especially governments and officialdom, poorly prepared. Meanwhile, international (and national) diplomacy continues for the most part on twentieth-century principles, leaning on twentieth-century assumptions


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– a giant charade or pantomime of gatherings and communi-qués in a world that has moved on in reality.

What are the prospects of coping with it all? not so good, but there are precedents that give hope (and some that don’t).

To give one hopeful example, in the nineteenth and twentieth centuries, the power of the British monarchy greatly declined – it became Walter Bagehot’s dignified part of the constitu-tion – yet its influence increased and has gone on increasing – vide today, when the British monarchy arguably has never been more respected, more appreciated or held deeper moral authority, both within Britain and across the whole planet. is this power, or is it influence? And what now are the differences?

The institutions of central government – in the British case, Whitehall, Westminster – which were once seen as unques-tionably the efficient parts of the system are now themselves going the same way. Central government powers have gone into precipitous decline. But, as with a skilfully and shrewdly advised and led monarchy, the opportunities to replace official power lost with influence gained open out invitingly, as long as we can see some of what is coming. As with a transformed monarchy, the replacement and reinvention process for central government requires the development of new roles, new and subtler kinds of diplomacy, a new and more acute apprecia-tion of the emerging international context and the dominance of global connectivity. Above all, a new tone and language are required in the leadership’s public utterances, in communica-tion, in illumination of a shifting landscape and in explanation and piecing together the picture of what is actually happening.

As already intimated, the thesis and conclusions here will be both optimistic and hopeful, especially about Britain’s pros-pects. The optimism will be about what could be achieved; the hope must be about what would be right and good to occur. But it is no use being too starry-eyed. it has to be accepted that the capacity of governments, indeed of whole establishments, to become fixated on certain viewpoints, assumptions and poli-cies that are held with intense stubbornness, but that then lead on to utter humiliation and disaster, remains as strong as ever. As with the methods of the eighteenth-century wreckers, luring ships to disaster, there are plenty of beckoning lights ready to



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steer us onto the rocks of national (and international) destruc-tion. The chapters ahead will deal with some of these.

some of the notions, ideas, theories – call them what you will – that take hold are extraordinarily difficult to dislodge. here are a few contemporary ones: that bigger carrier fleets, more missiles, more comprehensive nuclear firepower ensure national security and interests; that the West is still in charge and on top; that there are still superpowers; that Western versions of democracy can be packaged up and exported; that trade blocs bring advantages; that pushing nations and socie-ties together can somehow unite them; that modern economic theory, based on implausible assumptions of rational behav-iour, can explain, let alone forecast, world events; that economies are systems that can be steered, managed and kick-started; that aid promotes development; that there is a world energy shortage and oil has ‘peaked’; and that humankind can control and somehow tame the world climate.

These and other dogmas cling like limpets to the rock of public opinion. Many of them have deep roots, bedded in sets of assumptions and beliefs which go back many years in some cases. They have become enthroned as the conventional wisdom, the consensus of our times. They continue to guide policies and measures even when they are patently harming the self-interest of the authorities that adhere to them, and in some cases the direct welfare of those they are meant to help.

The March of Folly

The John Buchan quotation at the outset of this chapter reminds us of the dangers of extrapolation and the impos-sibility of seeing more than a little way round the curve of coming events. But what follows here perhaps owes much as well to the American historian Barbara Tuchman and to her book The March of Folly, which rightly had a major impact when first published in 1984.3

What Barbara Tuchman picked out were instances – of which history offers plenty – where the overwhelming establishment and expert view was heavily fixed on a set of


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assumptions and in favour of a certain course of action – all of which turned out in due course to be catastrophically damaging and wrong. her examples started with the Trojan horse, when nobody would listen to Cassandra and thought her insane, and ended with the Vietnam War. The establish-ment simply refused to adjust to a changed world. once having taken hold, these views were advanced with utmost confidence and stubbornness and by large groups of people. They could not be altered. Critics were swept aside and belittled, dissenters silenced, dismissed as crackpots or ostracised. The argu-ments, asserted those who were loftily convinced they knew best, were over. There was no alternative. All right-thinking folk were united in favour, were they not? Yet in the end all the Tuchman episodes collapsed into utter chaos and disaster. The dissenters, the persistent questioners, the small voices of warning had been right all along, and the establishment, the cognoscenti, the whole fashionable galère of opinion – all had been proved wrong.

so, too, with the postulations and causes that cloud thinking today. We are at such a moment again. it is the over-extension of sometimes good and worthy preconceptions, the refusal to note warning signs or change direction, the fixity of belief and rigidity of mindset of the political and regulatory classes, which in the end create the damage and mark out these states of mind as the onward march of folly, instead of the guidance of common sense. it was said of Philip ii of spain – he who came to think the Armada against the irritating english was a great idea, he who was immune to questioning, doubt or delay – ‘no experience of the failure of his policy could shake his belief in its essential excellence.’4

something of the same rigidity must have been around at the court of the Ming emperors in fourteenth-century China, as Matthew Ridley points out.5 The viziers at the ottoman sultanate’s court were on the same track – absolute commit-ment to the old procedures and rituals, total opposition to and ignorance of the new international forces taking shape ‘outside’, along with ever-increasing control and regulation centrally to protect and enforce them. The future, they decreed, must be the past. There could be no alternative.



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The over-ambitions of the Western powers to export their versions of democracy, to ‘drain the swamp’ and build a ‘democratic’ greater Middle east, or with simplistic zeal to democratise Afghanistan, provide a particularly acute example of this international tramline thinking. even where the tracks lead inevitably into spiralling costs and repeatedly fruitless violence, the word is to press on as before. The dogma prevails. overwhelming force has overwhelmed in the past, goes the thesis, and will always do so.

overturning the orthodox consensus about the ‘right’ way forward, showing that ‘right’ is going to turn out ‘wrong’ and finding a better way forward, is not always impossible. it has been done in recent times. for example, something of this kind occurred back in the 1970s and 1980s, during the Thatcher era, when assumptions hitherto believed to be unquestion-able about the economy and how it should be organised and run were challenged and shown to be invalid. The unthinkable became the thinkable and then the possible. A new phase, largely unanticipated, in human affairs, pushed its way in, both internationally, with the collapse of Communist central planning, and domestically, in country after country but very much in Britain, with the rise of free markets and the unravelling of the old corporatist and heavily socialised economy.

Today, it is certainly not too late to begin preparing, to start the repositioning of Britain and to save ourselves much pain and hurt if at least some of the flaws and errors of past times can be exposed before the damage is done, and if the new revolutionary world of communication and information can be understood. More than 17 years ago in my pamphlet titled ‘easternisation’ (published by Demos) and a book, The Edge of Now,6 i pointed to the rise – economic, political, social and moral – of the great Asian states and societies. such ideas were indignantly pooh-poohed by the commentariat, especially in The Times. it was ridiculous. how could teeming Asia, impoverished Africa or idle latin America rival the advanced industrial West, Western hegemony and european civilisation? now, more than a decade later, things look very different – although, since movements always go to extremes,


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the peak of Asian power may have passed, and entirely new centres of influence and creativity may be emerging, just when the most cliché-bound and slow-learning commen-tator has caught up about the BRiCs (always a muddling and difficult concept), about power shifts to rising Asia and so on.

The Edge of Now (2000) predicted – drawing heavily, it must be admitted, on the brilliant trilogy by Manuel Castells (The Rise of the Network Society)7 – that the internet age would radically change the role of governments, the patterns of politics, social attitudes, relationships, lifestyles. All these had been largely ignored at the time by opinion-formers, especially social scientists, but now, more than a decade later, they were belatedly ‘discovered’ and presented as amazing new insights. The Edge of Now was written and published before the rise of social media, like Twitter, facebook and YouTube, before the horrors of 9/11, before the Arab spring took e-enabled social action on to the streets. But it warned that e-enabled terrorism lay ahead, and so it turned out. it warned that democracy was a many-layered and variegated subject that would evolve differently in the digital future (Plato said it led to tyranny). it warned that states had changed and therefore the whole texture of relationships between states was changing. it warned that trying to export Western versions of democracy would end in tears, and possibly anarchy. it warned that liberal economics was failing to explain the new world – and it has. The book forecast that big, mass-organised political parties, like other heavily centralised organisations, would come under increasing pressure, and so it is turning out. it argued that countries like Britain would best survive as part of networks, not geographical blocs, and so that could be about to be proved.

Many more powerful voices than this one here have joined in challenging the ruling mindsets, some gently, some fiercely, some merely urging moderation of opinions, some contra-dicting them outright. We stand on the shoulders of others as we peer forward. on my desk are works – essays, books and speeches – by boldly heretical and persistent authors from both sides of the Atlantic, such as edward o. Wilson,



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Paul ormerod, Paul Krugman, Wesley Mitchell, Paul Volker, nigel lawson, Matthew Ridley, Thomas friedman, steve Keen, Dieter helm, Diana Coyle, Andrew Bacevich, george soros, David henderson and a host of others, all of whom have sought, in their different ways, to steer opinion away from the straight-line tracks and blueprints of prevailing world ortho-doxies, economic orthodoxies in particular, and open minds to the new conditions, domestic and worldwide.

As Maynard Keynes said – and of course all sides can quote that brilliant economist-cum-journalist in support, including this book – the task (a long one) is to escape from ‘habitual modes of thought and expression’. exactly.

in executing this task we will proceed selectively and moder-ately – to suggest how in certain areas the illusions, delusions and confusions of our times can be responsibly unravelled or defused – and how one country, Britain, can take steps to repo-sition itself in the new conditions. As francis Bacon (lord Verulam) warned almost half a millennium ago, confusion is the most fatal of errors, which ‘occurs wherever argument or inference passes from one world of experience to another’. That is what we are now doing – passing from one world of experience to another. A time like this is always painful for some. it can cause misery, bafflement, even violence and war. The approach here will be gentler than that of some of the brave campaigners of our times. it is conciliatory rather than revolutionary – to embrace and lead on from present miscon-ceptions rather than to confront. When, as in my own family, a five-year-old boy is told none too gently by his older sisters that father Christmas is make-believe, he gets very deeply upset. here we aim to go more carefully, step by step, from old illu-sions to new realities.

in his admirably concise history of World War ii, A Short WWII History (Allen lane, 2013), Professor norman stone, looking back to the first one in 1914, observes how extraor-dinary it was to see how highly educated men assume as truth things that turned out to be grotesquely wrong.

in a hundred years, not much has changed in this regard. A century ago it was the widespread belief that bigger battle-ships meant security and conquest, that empires enriched, that


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territory gained brought power and benefits, that any war would be short and so on.

Today, new, popular but equally flawed delusions have gained prominence, sprouting new fallacies – especially about the future role of Britain, but also about the best way to meet climate challenges, the best ways to spread democracy, how to promote economic growth, how to govern europe or how to promote development – actually reinforcing the misconcep-tions of the past.

Today, the same questioning needs to be continued because the follies continue. We have to ask: why do people repeat the canard about individual nations, such as Britain, being margin-alised or isolated when we are all so obviously woven into an utterly interdependent network world, a meshwork of link-ages and deltaic streams of complexity totally changed from the textbook picture of international affairs and diplomatic procedures of only a decade or so ago? Why do quite experi-enced politicians insist that pushing nations into centralised bloc arrangements will help matters, or be sustainable? Why is economics still treated as a science and a system, when it is plainly an uncertain art and a process? Why are shallower and pelagic Western versions of democracy promoted and propa-gated so insensitively, and with such negative results?

our view round the curve is bound to be obscured – today more than ever. some of today’s currently powerful streams of misinterpretation and misunderstanding will eventually dry up. fashions will change. second thoughts will emerge. once the new scene comes into clearer view, many will wonder what the fuss was about, and laugh – a little nervously – about the past intensity and confident passion with which delusions were held and new ideas resisted. But maybe not. We cannot be sure things will always work that way. in the twentieth century, they most certainly did not. instead, theories, critically flawed and combined with terrifyingly unified belief systems and blind misconceptions, propelled nations to conflict and devastation on a scale unparalleled in history.

John Buchan was right. The future is always curved, not one of straight lines, not at all, and we can only see a very small way ahead. And Barbara Tuchman was right – that the



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follies and errors on a grand scale will continue. But it may be possible to shed a little more light, especially if we first look back. so we will have to wind back the clock a few decades. The focus is on today and tomorrow, but the full story begins yesterday or, more truly, around 50 years ago.


6

hoW ToMoRRoW neVeR CAMe

new ideas grow slowly, and from deep roots – and usually outside the political hothouse. The concept of an agile Britain operating successfully in a network world in a sense emerges from its opposite – the belief that came to dominate the post-war period in the ‘50s and ‘60s that Britain’s destiny lay within the european bloc, that continental europe had somehow found the secret elixir of growth denied to the British and that we must join in the european integration process or be ruined. if Britain is to rediscover its global role, although in an entirely new form, as technology and events now beckon it to do, a settlement or clarification of its european status is the quintes-sential condition. for Britain, the european question is not just about europe. it is about the nation’s global role, prospects and purposes. of all the obstacles to the wide open road ahead, the european question comes top of the list.

‘in europe’ or ‘Beyond europe’ are visions not necessarily in conflict. They only become so if pursued to extremes. The extreme view of a europe permanently integrated at every level, from the political downwards, with the uK well and truly submerged and subsumed within it, does indeed mili-tate against the more balanced network positioning described



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above. securing the right kind of european role, in the right and successful kind of europe, is an essential part of the repo-sitioning process. But that, regrettably, is not yet where we are. instead, the uK is on the defensive, reacting to every eu initia-tive, lacking an alternative view of how europe should develop and hence sliding fast towards the ultimate sterile and narrow debate – between being ‘in’ or ‘out’ of the european union.

There is, say both the campaigners for exit and the campaigners for more integration with full British involvement, no middle ground. The two wings are united in diagnostic alliance (see Chapter 1). Both camps share in the same anal-ysis – that the european union today is a powerful bloc that will always somehow outwit and downgrade British interests. Therefore – and here the road forks between the europhiles and europhobes – either we must be completely locked within the bloc, so as to avoid exclusion and isolation, or, from the extreme opposite viewpoint, we will always be outsmarted by clever continentals and must withdraw and disengage. This is the dual defeatism that continues, fatally, to dominate discussion in the uK about the future of europe and Britain’s place within it. how Britain stumbled into this impasse is a long story, going back decades. how we escape from it is also going to be a long story, demanding a clear understanding of past developments and the innermost character of the european project. This is something which the novitiates of the Westminster Parliament in the present era, as they demand back this or that power (or ‘competence’) as though these were shop window items that could be chosen at will, do not under-stand. fifty-six years of building up the european institutions, layer upon layer like lacquer-work, into a series of artefacts of unparalleled organisational artistry and complexity, cannot just be unpicked to order.1

europe remains our region, where we have to step forward and work out how to lead (for once) in the reform of the eu that half the continent is waiting and longing for. America remains our close ally, but the evolving Commonwealth is our family, with whom we should surely spend more time.

Without doubt the european matter has become the main constitutional, economic and strategic issue that Britain faces.


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how tomorrow never came

There has to be a way through to better things and a better world position. how did we, the supposedly pragmatic British, and how did the whole eu, reach the present unsettled and dysfunctional situation? To answer that gives clues to the next moves. To see where we now go, it is necessary to under-stand the past.

According to henry Kissinger: ‘the emergence of a unified europe is one of the most revolutionary events of our time’.2 he offered this view 12 years ago and today of course it looks distinctly odd. To most people, it is becoming fairly clear that the limits of Jean Monnet’s model of integration by means of a supranational Commission have been reached and overshot, leading not to more unification (more europe) but to more fragmentation and division.

once again, treaty changes lie ahead in the european union to enable it to meet yet another major crisis. Time after time when it comes to european treaty-making, Britain has strug-gled to preserve its interests, sought safeguards, demanded opt-outs, but has always been left on the defensive while the commanding philosophy of steady european integration has rolled forward. Tactical battles have been won, but the armies of integration and ever closer union have always been able to continue their onward march.

Yet the march has now faltered. The almost impossible tensions caused by flaws in the euro system have overflowed into strains and stresses, and sometimes outright mutiny, in the march columns.2 Can the whole direction of this unhappy kind of european ‘co-operation’ now be challenged at its philosophic roots, and who will lead that challenge? Could it be the British – again? or have they long ago forfeited the trust, and therefore the support, of allies to enable them to promote an alternative path for europe, a different model, a new philosophy?

The space and place where these fundamental questions have been brought most visibly to the surface is the famous David Cameron speech – the one delivered on 23 January 2013 at Bloomberg’s london offices – a speech, as its first line emphasises, about the future of europe. Contrary to popular impressions and insistent media coverage and comment, the speech was not primarily about Britain’s relations with the rest



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of the eu. it was about european reform, about a european union architecture requiring different relationships between the central institutions and all its members, Britain among them. The British change would be a fall-out from the wider change in the whole eu’s character and direction.

The questions left unanswered by this radical approach are about the form that a modernised, less centralised, europe should take, and about the methods by which change can be brought about and an escape from the arthritic and paralysed framework of past treaties engineered.

These questions cannot be answered, as some have seemed to think, by merely playing tough in negotiations and demanding new opt-outs, special arrangements for Britain and selective repatriation of eu powers to the uK.

it will be necessary to dig much deeper. if the engine of european co-operation and alliance is to be reconstructed to perform differently, if the DnA instructions of european togetherness are to be rewritten, there has to be a full under-standing of how the idea of european integration ever came to take such a hold on the imagination of europe’s leaders and thinkers, and how in particular the British establishment signed up so readily to ever closer union and why.

The Heath enigma

To address that question behind the question, we have to go back to the past and not least to the complex personality of edward heath, the Conservative Party leader and prime minister who was absolutely determined, from the very roots of his being, come what may, to get Britain into the european Community.

Whether he himself understood the full implications or destination of the integrationist cause, i am not sure. he had been chosen as leader by a Conservative Party who saw him as the embodiment of efficiency and no-nonsense modernity, and being in the european Community seemed to go nicely with that. in particular, heath was viewed as a Party leader more ‘in touch’ with his own party, who would purge the Party of its ‘grouse moor image’ and of its association with the class of


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wealthy aristocrats and old etonians at the top of the Party – a theme with strong echoes today. That at any rate was the perception behind edward heath’s choice as leader.

having worked very closely with Ted heath, and spent long hours with him at his Albany apartment, or on his travels, i believe he saw British entry more as a cold shower of compet-itive pressures than as an advance to political union, although many have accused him of deceiving the British people by not making the political destination explicit.

My recall is that he viewed entry into ‘the Common Market’ more as a therapy than a vision. ‘The Colleagues’, as he liked to refer to them witheringly, did not really under-stand. it was all a matter of getting on with it and joining the obvious path to modernisation. The detail could be dealt with later. for me, this was exemplified in his handling of the Party’s policy portfolio. Asked by the Conservative Party leader, sir Alec Douglas-home (former prime minister and by then in opposition), to assume responsibility for rethinking party policy after the 1964 narrow defeat (widened of course by harold Wilson’s much larger victory in 1966), Ted instructed me (a) to draft out a new manifesto and policy list for the Conservative Party; and (b) to travel with him to the hirsel, the ancestral Douglas-home seat (January 1965), to discuss Manifesto details.

We travelled up to edinburgh on the night train. A strange though comfortable weekend ensued. When we at last got down to the purpose of the visit – a discussion of policy – Ted went to sleep as sir Alec was handing over documents about the leadership. so sir Alec was left waving them in the air until i reached from behind the sofa and grabbed them. The Sunday Times ran a suitably deferential photo of the sofa scene on its front page. Details were not of interest. it was going into europe, come hell or high water, that mattered. The collapse of the Macmillan policy, thrown out by de gaulle three years before, had to be reversed.

We went for an icy cold walk by the River Tweed. After lunch on sunday, we headed south. Policy details were to be left to me to write up from notes on the non-existent discus-sions. i could not recall a single policy issue that had been



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raised. i left my pyjamas behind and lady Douglas-home very kindly forwarded them to Conservative Central office.

Perhaps no further discussion was needed – at least at the strategic level. A new view of Britain’s role and prospects had gradually come to dominate British thinking. The lingering imperialism of previous British policy, the Macmillan world of Atlanticism and a bridge-building role for Britain, the special relationship and the old Commonwealth – all were finished. Britain in europe would go along, in heath’s vision and view, with a new style of government at home, the powers and priv-ileges of trades unions curbed, the growth of government spending – and functions – halted, taxation reduced.

i was witnessing – although not appreciating at the time – the culmination of a long sliding trend, the moment when the torch passed from the old establishment to the new era – but an era with its own entropy, its own defects within, as time would eventually show.

The gradual turning process, occurring as first the voices of dinner party opinion, then the asides and ruminations of influ-ential figures in the remaining intellectual salons in london, then the rising think-tanks, then the great Departments, first the Treasury and then the foreign office, all came round to the opposite conclusion to the one they held earlier and began to urge an application for full membership, is all brilliantly set out in Bill Jamieson’s book, Beyond Europe.4 here, in a form better than most – better perhaps than hugo Young’s much-lauded account of Britain’s journey into the then european Community, This Blessed Plot5 – the whole huge shift, first glacial, then tumbling and finally an avalanche of views in favour of full membership, is laid out. heath was both the agent and the outcome. The obstacles would be overcome, the friends jettisoned, the opposition silenced. That was going to be that.

in hugo Young’s account, a picture is painted of heath as a complete convert to the dream of a united states of europe, with the conscious surrender of sovereignty, higher legal order and all. This, i feel, is not quite right. i am not sure hugo was close enough to the Conservative scene, and although he was right about heath’s impatience with detail, his account did not have any reference, for example, to the hirsel affair – nor to


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other key moments in heath’s path to leadership and then to premiership, such as the south of france visit which took place in July of the same year (1965).

By that time, sir Alec had resigned and Ted heath had been elected Conservative leader. The press were very interested in his visit – here could be the next uK prime minister. The Telegraph went as far as hiring a large yacht on which he could be photo-graphed – and interviewed. his meeting in Antibes with gianni Agnelli, the fiat supremo, was, i believe, one more crucial influ-ence in shaping the heath approach to europe and the policy acts that would follow once he was in Downing street.

The reality was that in london, the debate was all about the ability to compete, the dangers of being left out of the continental european boom, as exemplified by the german Wirtschaftswunder, the french model of indicative planning, the italian ‘Il Sorpasso’ and the visible rising prosperity of the Benelux trio. europe for heath and the heathites, of whom i was one, was quite simply an escape from British corporate socialism into a more market-driven milieu.

This explains exactly why most of the Conservative Party, and certainly the younger element, followed heath’s lead and enthusiastically embraced eC membership. Threats to sovereignty seemed far away, indeed non-existent, and the euro-corporatism that was to come in the Jacques Delors era was not even on the horizon. The Community was a destina-tion for all liberal Conservatives and of course anathema to the leadership of the British labour Party.

We need to go back even further still – to 12 June 1961 to be precise. This was the time when for me and many others of my generation, european issues began to be woven into the political debate – demandingly, insistently and challengingly – some 53 years ago.

right at the time?

on that day i stood with Douglas Brown, one of the Daily Telegraph’s most senior correspondents, among the crowds on the sidewalk of the Avenue de Joyeuse entrée in Brussels.



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The crowds were waiting for the King to drive by on his return from the ceremonies in Kinshasa marking the independ-ence of the Belgian Congo. There were going to be grim wars and turmoil for years ahead in that part of Africa (they are still continuing 50 years later). But for the moment it seemed that the task had been satisfactorily completed, the sun was shining on the popular monarch and the crowd was in a good mood.

But our interest was elsewhere. Douglas and i had been sent by the Daily Telegraph editor, sir Colin Coote, to find out about ‘this Common Market thing’. The mood in london was sceptical, in the offices of the Daily Telegraph especially so. The european free Trade Area seemed a much better bet for Britain and no one quite understood what the ideas of Jean Monnet really meant or how the new european Commission was supposed to operate. it had been decided that a pamphlet should be written on the whole project on the pros and cons of British membership, and sent out to all readers with their daily copies of the Telegraph. i was to draft it with the help of colleagues. hence the investigative visit to the offices of this strange Commission, which were then scattered round the Joyeuse entrée district (this was years before the Berlaymont had been built).

What we found was attractive and exciting – at any rate to someone with non-socialist and free market inclinations. There was going to be a gigantic european Common Market. The inspiration was the german social market economic model. The drivers would be the combined strength of the miracle economies of the german Bundesrepublik, booming northern italy and ultra-modern france with its fashionable indicative planning, also inspired by Jean Monnet.

Combined with the vigorous Benelux trio, this would then form the core of a united economic community of great weight and strength. Britain, said Commission officials, would be crazy to stay outside this project and should have jumped on the bandwagon four years before at Messina, when the original Treaty of Rome was signed by the founding six member states.

looking across the Channel from still heavily socialised and regulated Britain, the european Common Market seemed a


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golden vision, a beckoning haven of liberal economics, market forces and restored bourgeois values. here was a world in which there were no apologies about middle-class interests and ambitions. indeed, germany even had its own Minister for the Middle Classes, focusing on and protecting the concerns of family firms – the famous Mittelstand. (half a century later British politicians were still discussing this aspect of german economic effectiveness as something to be emulated.)

There were some odd and disturbing features, of course – talk of eventual political integration and monetary union. And everyone knew that behind it all lay the fundamental urge to achieve permanent franco-german reconciliation. But Britain, went the comforting feeling, could admire all this from a distance. The politics would not worry us too much. Anything could happen in the long years ahead. The market was the dazzling pathway, enterprise the vehicle and wealth creation (suitably spread) the goal. This was plainly the wave of the future – the wagon and the band.

What was attractive to liberal market economists, and the free market right generally, was inevitably highly unattractive to Keynesian economic managers, national planners and the left generally.

At this stage, it will be recalled, the British labour Party, led by hugh gaitskell, was wholly and doggedly opposed to the British involvement in the eeC (the proper name for it), while inside the ruling Conservative Party there was deep resistance from the older members and the traditionalists. But the mod-ernising market-friendly wing was in the ascendant and the feeling was swinging rapidly towards applying for full mem-bership. unknown to us in the newspaper world, the Cabinet was within a month of deciding, after long agonising, to start negotiations for full membership of the eeC – to reverse years of disdain and doubt and to become ‘good europeans’, along with the founding six.

With this of course went the deeply psychological deci-sion to turn Britain’s back on the Commonwealth and to abandon for good final lingering notions of a British imperium. indeed, the move went so deep that it could not be admitted. Contemporary speeches explaining the turn to europe were



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laden all along with assurances that the Commonwealth connection remained intact.

All this seemed right at the time. The implications of the suez episode half a decade earlier had finally sunk in. An inde-pendent global role for Britain was clearly and obviously ‘out’. furthermore, the ‘Common Market’ was going to be the escape route from faltering corporate socialist Britain. even the term itself excited. europe had become our economic destiny.

new trade paths

More than five decades after our sunny day in Brussels, almost every issue and every argument has been stood on its head, and every position changed through 180 degrees. The question now is ‘left out of what?’. few of the economic arguments that so worried the Macmillan Cabinet now have any relevance. The tariffs that would have impeded British manufacturing exports, and led to ‘disaster’, have dwindled almost to extinc-tion; they are, with only a very few exceptions, an insignificant deterrent to non-eu countries selling their products into the european market. Moreover, the character of international trade has altered beyond recognition. Modern trade now follows a different path from anything the world has ever seen. so says Professor Khairy Tourk of the illinois institute of Technology. in today’s heavily interconnected world, he points out, it is no longer a question of products manufactured in one country being sold to another. The advent of the modern supply chain means that most manufacturers use compo-nents from elsewhere in the network, often from one or more other countries.

in these novel conditions, markets are simply no longer definable in terms of tariffs, quotas and other protections, including non-tariff barriers. The current mantra is that the european single Market must be preserved. But the actual nature and meaning of the phrase ‘single market’ has been transformed. The common trading platform of the world-wide web is building up a new kind of supranational single market – highly competitive, very transparent, criss-crossed by intricate


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supply chains and knowing no regional boundaries at all. The often asserted ‘fact’ that the eu is the world’s largest single market is no longer correct. Cyber markets on the internet are far larger; Pacific Rim markets, including the new Chinese middle class, are just as large, with the growing consumer markets of india, Brazil, Mexico, Turkey, Thailand, Vietnam, east and West Africa and a score of other places coming on fast behind.

not only have old classifications like ‘manufactured goods’ ceased to have meaning. And not only have trade in ‘services’ (deemed in the 1960s to be hardly worth noting) and in knowledge-intensive products taken centre stage. The driving forces of international business have also shifted into a world only dimly understood all those years ago.

in particular the old idea that the path to free trade lay through negotiating down various tariffs and quotas has lost much of its meaning. it is the non-tariff barriers woven into countless procedures, customs and attitudes that stand in the way. Their existence and persistence depend not on tariffs but on deep cultural factors and processes. The assault on these barriers has to begin not with numbers but with the deploy-ment of softpower in all possible forms, all in turn depending on the power to communicate and persuade.

it is indeed influence which has become power. When eu leaders wax lyrical about the prospects of an eu–us free trade area, in which all sorts of restrictions on trade will be lifted and tariffs lowered, they are both fooling themselves and pinning their hopes on the trade patterns and trade determi-nants of the past.

To try to explain this real world, in contrast to the bleak and misleading statistics, i invented in my book, The Edge of Now, written in the late 1990s, the concept of mentefac-turing: the amalgam of products, services, information and technology that was already then taking mainstream position in economic activity. (Years later, the excellent Roger Bootle arrived at exactly the same word in one of his columns, strug-gling to depict the same phenomenon.)

To Britain’s great cost, the blindingly obvious prospect in the early 1990s of rising Asian economic and political power,



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as the information age began sewing the world together in new ways, was largely ignored by both the media and the foreign policy community until well into the twenty-first century. Media stereotype views continued to shape thinking. That an absolutely fundamental, mould-breaking shift had occurred was then ‘discovered’ by about 2009 when columnists such as those in the Financial Times at last began to have doubts about the centrality of the eu to Britain’s future, warning that perhaps after all ‘the eu was fundamentally unsuited as a vehicle of reform’ and that innovation would come from else-where. even more reluctantly accepted has been the unsettling thought that the ‘emerging powers’ might have the edge not just in economic performance, but in underlying family values, mores and social structures that held their societies together. The suggestion in my pamphlet ‘easternisation’ (1996) that the rising Asian societies were actually outpacing the West, not just economically but in standards of moral behaviour and social commitment (all of these things of course going together), was met with a flurry of clucking disapproval and disbelief from commentators in london.

increasingly, the main determinants of trade flows and contents are supply chain couplings and investment location decisions. Physical goods, and mixed goods-and-services pack-ages, move between nations not because a producer in one economy is selling a finished product into another, but because components and information are passing from one stage in the supply chain to the next, or from one affiliate or plant to another within the same company or corporate group.

The whole concept of bilateral trade links begins to blur as, for example, Toyota builds car engines in Deeside, with parts from its spanish factories, for transfer to its car assembly plant in Mexico and the onward sale of the completed product to Brazil. The questionable value, or point, of expensive uK trade missions to Brazil, or other markets like india, trying to promote ‘British’ goods becomes apparent. As Toyota them-selves say, when asked in which country they make their automobiles, the answer is ‘we make them in Toyota!’.

This trade pattern, winding through countless supply chains or between affiliates, has now reshaped the world’s commercial


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system. Regional trade blocs like the eu are having marginal relevance in boardroom decisions about where fixed invest-ment in new plants and new networks should go. local tax conditions, lightness and consistency of regulation, flexibility of labour markets, electronic infrastructure, broad pro-market culture, softpower background linkages, local receptive-ness and a hundred other crucial influences on the structure of competitive costs now have infinitely more influence on the location of new physical investments than has been supposed all along in the european debate.

Meanwhile, the ussR is long since gone and the entire shape of world markets has altered, with Asia, Africa and latin America (the so-called emerging powers), after heavy setbacks in the late 1990s, pulling ahead again fast in the ‘nough-ties’, pausing slightly now, but about to continue outpacing Western economies in production, in technology, in innova-tion in many areas, and generating over 60 per cent of world output – offering on the way new consumer markets of a size and sophistication, and at income levels, which have overtaken the european single market.

not surprisingly, it has become the free market right, allied with those who see network technology and globalism as making the whole eu construction obsolete, who are full of doubts about further european integration, while it is the old market-resenting left who are most determined to see the flawed euro somehow preserved and embedded in an increas-ingly politically integrated european bloc. The tables have been well and truly turned. Britain, once mired in socialist corpo-ratism with a massive nationalised sector, is now seen by many – correctly, it should be said – as a haven of liberal economics, competitiveness and flexibility, while the rest of the european union often appears to be the home of regulation and anti-competitive controls – a sort of last redoubt against sinister globalised market forces.

With the fading of all the economic arguments for perma-nent bloc-building, the underlying politics have come openly to the front of the scene, hand in hand with the single currency project. Commitment to political union, indeed its neces-sity if the single currency is to work, is the top and most open



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priority. The outlines of the united states of europe for which its founders longed are now undisguised, and the prevailing philosophy is one of convergence, harmonisation and stand-ardisation – the level playing field – in contrast to the bumpy diversity and inharmonious anomalies that increasingly drive competition and the market process.

The seemingly simple and original process of integration built on market doctrines and on market-driven decentralisa-tion, offering a way forward out of stagnation for Britain all those decades ago, has now become a structure resistant to mar-ket doctrines, to the global network and the digital age. The very advantages that gave the original six such economic drive and power – staid and orderly trade unions, limited state interfer-ence, reasonable taxes, modest social overheads and regulation – have all turned from being elegant flowers into gigantic gone-to-seed weeds, rooted in the ground, refusing to be shifted, and choking off flexibility and adaptation to the new conditions upon which competitiveness in global conditions insists.

Cores and concentric circles

Behind this mutation lies a still deeper shift. once, the polit-ical motivation for european integration lay in the need for eternal franco-german rapprochement and in creating a Western european bulwark against soviet expansionism.

But now the focus has changed. europe’s international role in a different form has now become the foremost preoccupa-tion. The open integrationist ambition is to form a bloc with its own foreign policy, its own military agenda and capability and its own ‘destiny’, to stand between the usA on one side and the Asian powers on the other, just as Macmillan guessed.

The motivation for a single united europe is certainly far from new. napoleon remarked that geography determined a nation’s foreign policy. Just as the driving problem for germany since its nineteenth-century emergence as a single state was its centrality, its mid-position between the Anglo-saxon west and the Asiatic east, so the new geist has become europe’s mid-way position between the Anglo-saxon and Asiatic worlds, and the


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imperative need to form a centralised and robust bloc entity in a world where the blocs have the battalions and really count.

Yet the forces that make the eu’s economic philosophy yesterday’s approach have done exactly the same for its politics and Weltanschaung. like the traditional state, the super-state bloc has necessarily to be a construct with a higher authority, a solid territorial unity, a core or centre region or grouping and lines to a peripheral ring of regions or localities – the antithesis of a network.

The vision to which the old school of europe-builders cling is one of concentric circles and of regional geography. At the heart of this vision is the real europe, the core or soul, which can both bring together the resources and power of the bloc and from which its binding influence radiates outwards and downwards. The concept is physical as well as psychological. islands and outlying groupings can be embraced and linked up to the system, but to be outlying is to be weak, maybe to deserve extra support and understanding to make up for such handicapped positioning by the whims of geography. Thus, the text of the Amsterdam Treaty contained a patronising ‘Declaration on island Regions’, with pitying references to outermost regions and border areas, pointing out their handi-caps and suggesting that specific measures may be justified to help them along as europe ‘moves forward’.6

The contention then (1997), and still the prevalent view today, is that the nearer to the core of the regional bloc a country lies, the better its access to the centre from which the vigour and life force of the union cascade downwards. it can be generously delegated, as is implied by the doctrine of subsidiarity, or sparsely delegated, as impatient centralisers and planners prefer. That some of the outlying and less central regions and member states of the eu are today more pros-perous than the stagnant core is unwelcome evidence. The facts do not match the theory. They must be disregarded.

either way, and organised on whatever principles, goes the thesis, the geographically delineated bloc is the entity, with a voice in the highest world councils and a space in the geopolit-ical order of the world. This is what the new europe aspired, and still aspires, to be, with Brussels as the seat of government



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and the centre point of the union (a role vigorously disputed by, and inefficiently shared with, strasbourg). This had to be the answer to big America, big China, big Russia and so on – a big, united european trading bloc to stand up for and protect its regional interests.

unfortunately, this entire edifice, this modern version of the old european unity dream, no longer fits the amazing real world that has rapidly emerged – so rapidly that it has left behind great pools of outdated language and attitude that still dot the entire eu landscape.

The problem is that networks have no centres, and scarcely any definable hierarchies, beyond a thickening of influence and power at certain points in the web of linkages. There can be no strong centre and weak periphery because there is no periphery and no physical heartland, only a mass of cross wires and connections, each working with and relating with the other. The operation of a network does not require a bloc. it rejects bloc structures, bypassing and undermining them. location becomes supremely unimportant. The small island at the edge can be as much integrated into the network as – or even more so than – the larger region or country at the old geographical centre. Being at the edge, and being small, may actually make for a better positioning in relation to the much larger global network in which power is now increasingly subsumed.

There is a traditional picture here of officials and ministers sitting either side of green baize tables head to head, bloc to bloc in negotiations on a mass of detailed trade issues, micro-phones in front of each place (be sure to press the button before speaking), interpreters tucked away behind glass screens at the end of the room. This is the ‘bigness’ case the eu inte-grationists cannot get out of their heads. But new realities have slid away from the green baize scene, with its draft agree-ments, communiqués, derogations, codicils, treaty texts and all the rest. if on occasion combined clout is truly needed – for example, to halt particularly blatant anti-free trade practices or create a common front on a security issue – then in the internet age it can be engineered instantly to suit the moment and the issue. individual flexibility can be preserved, or alliances solidi-fied, with a few clicks and a good dialogue stream.


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in the case of the uK, this is not just a matter of percep-tion or hunch about the way things are going to be conducted, but a solid and already established reality. This is partly because the english language dominates the entire communi-cations system, including the whole internet (80 per cent of all the world’s stored computer information is in english), partly through the history and the legacy of greenwich Mean Time and partly because the uK has already become the european gateway for international internet linkages. These factors simply put Britain in a different league from other european countries both in the development of new forms of commerce and trade on the internet system, and in electronic communi-cations generally.

But the real problem with the prevailing european ideology, and with supposedly ‘peripheral’ Britain’s relations with continental europe, is rooted in much deeper and older philo-sophical differences. The modern continental instinct is to keep politics out of things, to find the consensus that will give vastly able bureaucrats, backed by well-informed executive agencies, free reign to administer and manage society in the economic and social interests of all.

The more that quarrelsome politicians, bringing in their wake the vagaries and whims of unstable and often poorly informed popular sentiment, can be kept at a distance, the better for the ‘health’ of society and the easier the ‘way forward’ for europe. statehood is the obstacle to this technocrats’ nirvana. national parliamentary systems that actually enshrine the prin-ciple of disagreement, and encourage the voicing of contrary and critical views, work directly against the orderliness and unity that the vision seeks.

We are back here with the deepest fault line in the european integration project as currently conceived.

nation states, goes the conventional thesis, are primarily economies – plus, of course, various layers of regional and national cultural identity and local custom, which should be respected. With the coming of ‘globality’ they have inevitably lost most of their power and raison d’être as viable units, and should be subsumed as fast as possible into bigger blocs – states writ much larger – so as both to allow the marketplace and the



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social order to flourish, and to maintain a prominent place on the world stage.

Almost everything is wrong with this line of reasoning. nation states are not just economies and their citizens are not just happy families wanting only to be taken care of by wise, house-keeping administrations. They are sovereign and juridical entities, created by their (sometimes very long) histories and by circumstances, and sustained in most cases by democratic legit-imacy of varying kinds and strengths. Whether nation states have lost independent economic power to privatised owner-ship or global market forces, or network commitments to other states, or whether indeed they ever had much of this sort of power, is irrelevant.

What matters is their legitimate authority. That is what establishes sovereign states. They may be weak or strong, in economic, military, diplomatic or other terms. They may be internally divided or united. They may in practice be severely constrained in their freedom of action – and in the interde-pendent network world, they usually are. But they remain sovereign entities, and therefore the source of the rules of law and property within their jurisdictions, unless and until that sovereignty is removed in toto, either by legitimate democratic decision (cf. scotland and the Act of union 1707) or by violent invasion and occupation.

europe versus politics

even if none of this were so, and nations were really just tranquil economic entities, rather than living societies, it is questionable whether trying to merge them completely into a single larger economy would be the best thing for the market system, for competition and for general commercial and social well-being. economies and marketplaces are not just mech-anisms ‘out there’, but integral parts of the jurisdictions, the histories, the attitudes, the values and the traditions of the nation states that house them.

such things grow and develop, usually (although not always) over very long spans of time. They may be intimately linked


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with each other through trade, ownership and now through globalised finance and commerce. But they can no more be made into one unit than plants or animals of different species can be grafted or interbred (it is possible, but it tends not to work or last). They certainly cannot be glued into one big ‘economy’ to order. nor is it any longer necessary or logical for them to be so.

nor is the larger bloc necessarily the most agile and adapt-able structure in the age of one-click connectivity between the networks. nor is a world of big binding blocs inevitably more stable or better for world order. A bloc that solidifies relation-ships, that pins its constituent members down to the lowest common denominator of decision, to the hesitations of the slowest and to unending search for non-existent uniformity, is no longer a necessary feature of a hyper-connected cosmos. The microchip frees up international co-operation. i recall being shown one of the first manufactured microchip semicon-ductors at the ferranti factory at Wythenshawe in the early 1960s. it was explained to me that this tiny device would allow mass and standard production to be replaced by tailored prod-ucts, each designed for a specific purpose or requirement. This, said the engineers, would change the entire world. i was given four and had them made into cufflinks.

lift this on to the international scale and it begins to explain why today’s microchip-based connectivity allows alliances and projects to be assembled to meet specific purposes – instantly, effectively, but not permanently. focus is total; wider collateral impact, often unforeseen, is minimised.

This fantastic new flexibility is of course two-edged. Millions of network connections eat away at the power and coherence of all bloc arrangements, large and small. China’s leaders sleep increasingly uneasily as centrifugal forces and rival power centres chip away at central party control. The Putin clique in the Kremlin struggle to keep the Russian federation in one piece and its near neighbours on side. supposedly stable coun-tries, like Turkey or Brazil, suddenly tremble and judder. The historic American struggle between states and federal authori-ties, between market power and federal power, grows steadily more intense. The plates are shifting. Microchip-supported power is everywhere on the move.



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The divisive bitterness within the eurozone is one more grim example of bloc decay. nor do the definitions of the groups of functions claimed to be necessary to establish bloc adherence stay stable or unaltered through time. And benign, consen-sual, politics-free, administration of the wide social cosmos is not the best kind of government for free peoples. This, in Montesquieu’s phrase, is ‘government by strangers’.

A glaring paradox is evident in the character and aims of the european union as it has now developed. in contrast to earlier days, almost all its official leaders and opinion-shapers repeatedly proclaim the political nature of the project. Monetary union, banking union and fiscal union are depicted as decisive steps on the way to political union and the emer-gence of the united european state. The arrival at the centre of the european debate of serious proposals about complete budgetary and fiscal and, then, political integration are exactly in line with this vision.

Yet the politics so regularly referred to is really an ‘anti-politics’. The project is not to politicise but to de-politicise, to hand back to the world of economics the scientific task of building the borderless (and therefore barrier-free) single market, which will also be a political union, bringing happiness and world influence for all europeans. The idea that countries geographically juxtaposed should not converge, but on the contrary should in many respects go their different and some-times unpredictable ways, or ally themselves to new networks, or that groups within nation states should quarrel and disagree about ‘the way forward’, is anathema to such minds.

hence the proclaimed political character of the project, which both enthusiasts and critics of integration fasten on to, is really a cover for a profoundly non-political view of govern-ance, life and society.

More than a decade ago, in an effort to establish that the building of the european union bloc as a replacement for its component nation states was nonetheless a flexible and accom-modating process, the concept of variable geometry was introduced into the debate. however, it turns out to mean very different things depending on the angle from which it is approached.


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for strong and impatient enthusiasts for one europe, the variable geometry idea offered a way of pushing ahead with europe-building while letting the stragglers – those peripheral nations like the uK – follow at their own pace. The ‘hard core’ of countries central to the european integration aim could then press ahead at top speed while allowing other more hesitant nations, who had somehow failed to perceive the benefits of full unification, to dither and dally along the road. eventually, however, as Karl lamers, the Christian Democratic union’s formidable foreign policy spokesman, set out in a series of lectures round europe in the mid-1990s, the ‘magnetic pull’ of the leading core states would drag the laggards along. A nation trying to evade this influence, he explained, would be marginalised.

This interpretation of variable geometry was therefore bent into being another version of the concentric circles vision of european unification already discussed, although couched in more modern and technically appealing terms. seen from the periphery – for instance, from the British viewpoint – it at first sight seemed a reasonable way of letting the ‘islanders’ do their own thing, and some voices on the english side of the channel greeted it enthusiastically. from this latter perspective this interpretation seemed to offer an endless series of opt-outs from the less palatable parts of the hard-core agenda, while of course keeping the uK respectably within the camp overall.

But behind both views lay, and continues to lie, a question-able and outdated assumption – that the road map towards a new, integrated european state was basically the right one, even if some moved more slowly along it than others. The building of the new pyramidal hierarchy of world-class bloc power would continue. france and germany would lead – others might follow as and when they wished.

The inherent flaw in all this remains the same – that in a networked world no hard core, hierarchy or lead group has pride of place. There is no pyramid to build and no growing centre of solidity – and solidarity – towards which to gravitate, no fixed and determined geometry from which to vary.

economic prosperity is shaped inside each society and nation by the quality of its internal law and market climate,



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and the extent and efficiency of its external linkages into the global economic network. The variations in the way each national market process develops may make ripples and tremors throughout the whole network system, given its enor-mous interdependence and sensitivity. some parts of the web may actually be broken for a time. But there is no way in which some countries can be said to be ‘ahead’ on the track to a specific goal or winning post, because this is no longer a track event.

the fatal euro

Variable geometry was held to have particular relevance to the argument as to whether the uK, and a few other ‘periph-erals’, could stay outside the single-currency system of the euro while remaining fully inside the european union for all other purposes and in all other respects.

it was argued that the hard-core countries could push ahead with full currency unification without Britain. This, it was claimed, would present problems for Britain but not for the euro-participating countries. They would be the beneficiaries of currency stability and an independent monetary policy of immense influence and world significance. separate currencies, which were subject to all sorts of political influences and string pulling, would be replaced by a single currency ‘as good as the Deutschmark’ and appropriate to the size and status of the ever-closer european union.

here, however, is where the attempt to lift money out of politics, in parallel with the attempt to lift all economics out of messy national politics, has backfired. Amalgamation of national currencies, all of them controlled via quantity and price by national governments, into one denomination creates not a less political but an even more politically driven currency unit. As divergences occur (as they must), strains inevitably build up. Today, those strains have almost reached breaking point, as in country after country the straightjacket of a fixed external exchange rate has put intolerable pres-sures on domestic state expenditure programmes which have


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had to be cut and cut again to constrain budgets and meet eu rules required to qualify for bail-out assistance. The euro has become a string of periodic crises, with a lengthening roll call of mutilated states as the financial pestilence sweeps through them – greece, italy, spain, Portugal, Cyprus. Between this list being written and being published, it is very likely that new names will be on the casualty list.

The euro has therefore turned out to be the most highly political currency on earth, with its fortunes closely attached not to one single european government, since no such govern-ment exists (although the ups and downs in the controversial life of the european Commission do have some effect), but to the 17 participating governments, with all their motives, indi-vidual agendas, peculiar domestic worries and lobby pressures.

The european leaders who said that the euro would not work without full political union (i.e. one european state), and the opponents of the euro who agreed this was so, were both entirely correct – in logic. until and unless a real political unifi-cation can be manufactured in europe, with a single european sovereign authority formerly replacing the authority of the member nation states, the euro will remain a sickly construct – prone to bouts of illness, vulnerable to every passing finan-cial fever or disease. unless logic prevails and political union is imposed, a single currency can never work successfully. There will always be periods of crisis.

in no way can the euro problem be described as ‘over’ or solved. The huge downward pressure on the gDPs and living standards of the Mediterranean member states can only send debt patterns higher and keep their borrowing needs on the knife-edge of disaster. for some, at some stage, the knife is bound to slip.

The whole euro project was always out of sequence. it was always putting the roof before the walls, or, as some have put it, the cornerstone before the arch. for a while i sat on the 1987 Committee jointly chaired by Valerie giscard d’estaing and helmut schmidt to carry forward the euro project – the so-called Committee for Monetary union in europe, or CMue. The two men talked to each other in not very good english. Jim Callaghan was the other member but he never



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turned up to our meetings, which were held in prestigious surroundings in the various european capitals. The plan had been decided in advance, although initially it was to be called the ecu. The conviction was total – that fluctuating curren-cies would never allow the european market to develop, or european integration to proceed. My query about what would happen to national budgets was met with the reassurance that in due course political harmony and unity would bring these matters under central supervision. All would be well.

it wasn’t. The difficulty is that in human affairs, logic has seldom prevailed except for very short periods. in history it has never been the norm and in today’s internetted and interac-tive world, it stands even less chance of prevailing. sentiment, amassed through the social networks, will beat logic every time.

like Les Misérables, the visionary europe builders sang about tomorrow but tomorrow never came. There is indeed a new world, but it is not the one they foresaw or planned for. And now they, and we, must think again.


7

The PARTY of JAnuARY 23

escape from the eu labyrinth

The eu is an organization in peril.David Cameron

The party of January 23 is the party of european Reform. it stretches across the left and right patterns of both British and continental politics. The Cameron speech on europe of January 23 was not just a piece of political manoeuvring, as a largely ignorant and uncomprehending press assumed and insisted. it was a new opening, an invitation to adopt a new mindset in dealing with european reform and europe’s future role, as well as just Britain’s. The follow-on to the David Cameron speech – the strategy of 23 January – needs to form a central part of this new approach. it is this on which the British will be voting in the promised referendum of 2017.

how is this approach to be implemented and this apparent european sickness cured – both to Britain’s and the whole of europe’s advantage? how can the eu become something that carries Britain forward rather than holding it back? how can a reformed eu sit more comfortably with the new world of cyber power and networks, including the Commonwealth network? is there really a lasting cure, a settlement, a ‘comfortable



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outcome’, a completion of the single Market, a ‘solution’? This has become, and remains, almost the central preoccu-pation of politicians not just in the uK but throughout both the member states and the ‘accession states’ – those who, for various motives, want to be in the eu ‘club’, but look uneasily on its development and wonder whether they will ever fit in, or be allowed to fit in. of those in the waiting room, Turkey is far the largest and most important. Their application to join has become mired in an endless prolonged and – for Turkey – somewhat humiliating negotiating process. Their interest in a reformed eu is very similar to Britain’s. They should be near the top of the list in the recruitment of like-minded allies to take europe forward – in the right direction.

it is extraordinary that europe should have burdened itself with these agonies when the two other regions of the world with which it struggles to keep pace, the usA and a China- and Japan-dominated Asia, are untroubled by such worries, being broadly unchallenged nation states – although of course they have other problems in adjusting to the demands of globali-sation and the network world, and of unravelling their own traditional structures of government and society. But at least they can concentrate their energies on these things, and not be distracted by confused and flawed arguments in favour of submersion in a superstate structure which lacks democratic credentials and seems untuned to the digital world that has grown up outside it.

The current plans of the AseAn (Association of southeast Asian nations) to create a common trading area underline this point. The plan is to launch an AseAn economic Community by the end of 2015. in their ongoing discussions, the emphasis has been at all costs on avoiding a top-down organisational imposition on the region. Agreement, say the Asian member states, must come voluntarily and from within each country, not from central ukase and blueprints or top-heavy secretariats.

it is even more extraordinary that so much political and diplomatic resource should be diverted into the eu issue when the union is a modest and shrinking piece of the global jigsaw.

Yet for european nations, the issue will just not go away. The project has gone much too far for the core nations


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the party of january 23

– germany and france – to reverse tracks. But for Britain, uneasily inside the union but not the eurozone, for the would-be joiners such as the West Balkan states, Turkey and possibly ukraine, and for those like switzerland who are not even in the waiting room, the dilemma must somehow be resolved. A modus vivendi with the rest of europe, the common geograph-ical area, the neighbourhood and the historical and cultural home, has to be achieved as we move on to a new posi-tioning on a changed world stage. Tony Blair once described this, in a moment of great candour, as the need for ‘positive engagement’ with the union without having to digest all its flawed logic.1

The central task remains. it is to formulate a european policy of clarity, strength and purpose, dedicated to the vision of a wider europe, in which democracy and the liberal order are entrenched and which carries us away from the old franco-german arrangement, or ‘project’. This wider and more up-to-date perception need in no way be hostile to the innate value and purposes of the franco-german rapproche-ment. its aims will be to the benefit for all.

a British approach

Rather than becoming bogged down in sterile, polarising and ultimately divisive arguments about renegotiating Britain’s relations and powers vis-à-vis the rest of the eu (a situation towards which we are currently fast slipping), may the moment not have come for Britain to take the initiative for once in reforming (i.e. changing the direction of) the eu as a whole – and doing so in a thoroughly pro-european way? The British need to mount and win the argument for a better sort of europe – and do so in a manner which wins over allies throughout the eu and the best and brightest europhiles in all parties at home. it has to be shown that the integrationist doctrine has reached its limits (as everyone privately acknowledges) and that a better model, in tune with our times, is available.

There are always voices ready to assert – from both eurosceptical and europhile wings – that this is ‘not on’ and



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that the rest of the eu ‘will never have it’. But these views are rapidly becoming out of date. Big forces are building up not only at national and political level throughout europe, but also at the levels of intellectual argument and theory, which invali-date the old integrationist case and put in reach the alternative, but still highly pro-european, model of flexibility, diversity and decentralisation of powers.

The time is surely fast becoming ripe for Britain to lead in this new direction, not only in the interests of the eu itself, but also to head off major and imminent problems here at home. i suspect that i have been tangling with these matters longer than most in government – or in Parliament (since 1962 when i wrote the Daily Telegraph guide to the Common Market, after interviewing Monnet’s advisers). i don’t know whether that qualifies or disqualifies me from opining, but i do know that the need now is for a european policy – repeat, a European policy – not a policy for Britain in europe but a strategic framework for the reform of the structure of the whole eu enterprise, in line with common sense and completely up-to-date needs and principles.

We are constantly told by advisers that ‘no one in Brussels will listen’, etc. This is no longer so. lots of quality support for a radical overhaul of the eu – its powers and institutions – exists in france and germany, the netherlands (very strongly), in Central europe and even in Club Med. countries.

There is also the view that no initiatives of this kind would be appropriate until the present eurozone problems are resolved. But that could take ten years. neither Britain nor the rest of the eu can afford to, or need to, wait that long. Anyway, the intellectual conversion required takes time (just as it took time to convert the world to privatisation and market economics 30 years ago).

ideas on a reform programme for the eu emanating from British sources need to be purged of their surly and plaintive tone. They must be strongly pro-european, pro-france, pro-germany and pro- the smaller member states. Britain will get nowhere at all by sounding anti-european or withdrawalist (or anti-french or anti-german). The question is not about Britain v. the eu, as many seem to think, but about what


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kind of eu is best now aimed for and how Britain intends to use its full weight and intellectual capacities to promote that goal.

The watchwords must be decentralisation and flexibility. The balance of competences study being undertaken by the British government is a useful start – but only a start – on from which to build this approach. At all costs, this exercise must not be allowed to degenerate into an argy-bargy about Britain in europe, and about which powers we can take back or ‘repatriate’ unilaterally. That way lies certain polarisation into a sterile argument about withdrawal, inner or outer cores and so on. The British have been round this course before and it always ends in stalemate, bad feeling and divisiveness inside the Conservative Party, quite aside from further antagonising Continental friends. it would also suck us into an early in/out referendum which is not what most people want (as opinion polls tend to confirm). instead, the emphasis should be on the contribution British thinking can make to overall eu reform as it affects all member states (in different ways).

We come to the substance. What does reform really entail and how does it interrelate with the ongoing euro crisis and its resolution? There is first a profound intellectual conundrum – or indeed series of conundrums – to be resolved – which have been debated over many years in endless eC/eu conferences and informal circles.

What does integration in europe really mean? Does it mean conformity or diversity? To get on the right track, we first need to demonstrate that a new and better eu vision is superior, in european terms, to the outdated integrationist one. until the 23 January apertura, this approach had never been seri-ously attempted. Most of the campaigns for change on the eu front – including the current backbench fresh start one at Westminster – have instead begun from the narrower and shal-lower assumption that integration will prevail for the ‘core’ majority of member states, that it will work and that this there-fore forces Britain to review its relationship with Brussels on a bilateral basis.

A much better starting point is that integrationism is not the best thing for modern europe, that it probably will not



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work, that there is a better model and that new ideas can do more for the eu, and its future health and interface with the rest of the world, than the prevailing ‘more europe’ orthodoxy can ever deliver.

a different europe

how is that to be done? Could it not be time to open a new front of proposals and initiatives on eu reform? of course this does not resolve, or even engage immediately with, current headaches such as the european Budget issue, banking union, fiscal union and any consequential treaty changes, or other challenges. But the gap to be filled here is one of vision, strategy and direction – without which every second-order issue becomes another damaging and defensive struggle.

The central intellectual contention on which to build – which, to the world outside politics, is becoming a self-evident feature of the way society now works – is that networks triumph over hierarchies.

hierarchies produce pyramid thinking, constant centralisa-tion, laager mentalities and inclinations to wall-building and protectionist measures. The old eu is shot through with these tendencies. The current signs of growing support for climate protectionism are an excellent example of this.

so somehow a new strategy has to demonstrate (repeatedly) that decentralisation, diversity and flexibility (the ‘refashioning of the eu’ the British prime minister calls for) offer a superior model to political integration, more in line with twenty-first-century practices and technological possibilities, and bring europe closer to the people, in line with the (largely forgotten) principles of laaken.

More specifically an approach is needed which insists on real subsidiarity, not just tokenism. it demands the transfer of a range of competences back to national and local level – that is, making social legislation more intimately tailored to local needs and circumstances, and bringing employment and health legislation closer to the shop floor.


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We have to be able to argue convincingly that our model – involving a more variable and less standardised approach to european co-operation – is a better dedication to the integrity of the single market than the current euro-orthodoxies. it has to be established that the mindsets of those who still hanker after tax harmonisation, fiscal union, a financial transaction tax and other centralising trends lie outside the treaties and outside the interests of the union in modern conditions.

This applies to the whole continually troubled eurozone itself, for which clear legal separation from the evolving union should be confirmed. Whether pure political integration is the answer to the eurozone’s future – and whether it is actu-ally practicable if attempted, however logical – is for others to try out and establish. The reformers’ message should rise above that. ‘The force’, in the end, is with decentralisation, variety and member states acting democratically, rather than with central power attempting to rule europe. The essence of europe is diversity, and always has been. The web age of digital information and interactivity makes it ever more of necessity, as well as easier to achieve.

To make all this more than a set of mere assertions (or dismissed as another perfidious British try-on) it would be helpful to have serious economic arguments in support, instead of forever pulling the other way. it ought to be directly helpful that revised economic theory and example are recasting economic activity as a process, and increasingly rejecting conventional macro-economics as system-shaped and mechan-ical – leading, as it invariably does, to the apparent need for more and more central control, bloc planning and regulation. for europe, it has to be demonstrated and established that this does not and will no longer work.

Beyond economists’ arguments, many other professions and disciplines can be summoned in aid. The spearhead prin-ciples of today in science, biology and engineering all point towards self-assembly and self-regulation, and against central compression. from these new perspectives and insights there could flow the practical arguments for unravelling the existing accumulated acquis, for more competition, and for bringing



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social and economic policy much nearer the shop floor and the local office.

A further ‘pro-european authentication’ of this new direc-tion could be secured by tying it up with the widely accepted principle of subsidiarity. even the lisbon Treaty, despite its heavy integrationist bias, accepted subsidiarity as a founding principle of the union. on this growing consilience of modern theory and practice, together with the new social and tech-nological imperatives of the information and cyber ages, and the new economics, the case for a different europe can and should be built.

The delivery politics of this new approach are challenging, but a good deal more promising (and enjoyable) than the pros-pect of constant British defensiveness in face of new continental initiatives and treaty change proposals, and constant domestic pressures for eu withdrawal where British defences fail (as they inevitably do in places).

The first step towards getting on the front foot is to advance the arguments, with the real profundity and intellectual backing which are there to be mobilised from the sources enumerated above. The best brains in all parties have to be won over to the anti-integrationist case.

The second step for Britain is to join up in harness with the other eu member states, and the growing opinion blocs within them, who take the same view – pro-european and also pro-reform. The conventional integrationists and federalists have long been better organised than their critics. They have to be assured about new ways of proceeding as their old ones fail, not just confronted. There has to be mutual give and take.

The third step is to promote and apply, with the support of organised allies, principles of decentralisation, local inti-macy as against remote bureaucracy, and flexibility at all levels of decision-making within the union. specific focuses and strategies are required in all the official power centres and institutions of the eu, as well as the unofficial ones. The four official centres of directional drive are the Council, the Court of Justice, the Commission and the Parliament. The key lessons of lifelong experience and studies of union (and, before that, Community) progress are that decisions and trends are hatched


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in think-tanks and at informal gatherings, with which alliances of opinion must be sought and to which unrelenting intellec-tual pressure must also be applied.

further reinforcement for this whole new approach comes from events and developments outside the union. The eu is now dealing with, and competing in, markets that are no longer just developing, but are in some areas fully matured and pulling ahead of the West in sophistication and general standards. established Asian dynamism and market opportu-nities are now being reinforced rapidly by rising African and latin American prosperity. for the eu to survive in these new conditions demands an agility, flexibility and openness that the conventional integrationist approach cannot deliver.

Behind these remarkable shifts in the global economic pattern lie, among other things, big developments in energy prospects, revolutionised by enhanced discovery and recovery technologies. led by shale gas and shale oil prospects (already realised in the usA), the African states, both east and West coast, are emerging as major world energy suppliers. Across the southern Atlantic the same pattern, as predicted by geolo-gists, is emerging, with Brazil now taking its place as the sixth largest energy-producing power in the world.

Alongside these resource developments, and in part because of them, the emerging powers are becoming the world’s chief sources of wealth and investment capital. The flow of capital has been reversed. The eu, in making itself an attractive desti-nation for funds, has no alternative but to become less of a standardised and regulated bloc, and more of a region of varied opportunities.

in British prime minister Cameron’s words: ‘the eu is an organization in peril’. Another attempt at unilateral British recapture of eu competences is a dead end. it will strengthen the withdrawalists, antagonise Britain’s european sympa-thisers, friends and allies, divide our parties and undermine the Coalition. instead, the argument has to be won, as it now can be, against the traditional eu integrationist model and in favour not just of variable geometry but of a more decen-tralised, modernised eu structure. This reform strategy has to be built up and promoted (with allies) in a pro-european



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manner, as an attractive model for all those who genuinely want to see the eu survive and prosper in the transformed global landscape.

A Europe of endless bargaining

Why has the german approach, with the french in willing compliance, at least until recently, with its hard-core concept, its europe of concentric circles and its abiding dream of a nation-free europe, been so all-prevailing, carrying all opposi-tion before it and indeed marginalising all alternative european visions, successfully depicting them as ‘anti-european’?

The answer is that german policy has been consistent, driven by conviction and drawn from the deepest memories and lessons bitterly learned, in fact from the german soul. A european germany is essential and existential. There is no choice, nor has there been since 1945. half-hearted, nervous British policy, enfeebled by a deep lack of self-confidence and by a mood of weary defeatism, never had a chance by itself against this determination and will.

But technology is doing democracy’s work. in a network worldwide, new opportunities to change direction and move on now open out. The old european structure, with its enor-mous achievements, must now be reconstructed to match entirely new conditions. A younger german generation sense this and feel the consequent dilemmas acutely.

Both for them and us, the new unlocking insights may be that first, in the network age, there is no settled and complete european structure; and second, the definitions of functions or competences may not be fixed amidst societies’ changing needs and behaviour patterns. The language of europe-building is peppered with ‘completions’, ‘solutions’ and ‘unfinished agendas’ – next steps forward to certain integrationist goals and systems, towards which ‘momentum’ must of course be maintained – hence all the unending metaphors about buses, trains and boats missed.

But this may now be quite the wrong way of approaching the europe issue. in the informational paradigm, the process of endless bargaining and negotiation – about relationships,


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co-ordination of policies, nature of functions covered, appro-priateness of functional groupings, development of new initiatives and ad-hoc response to new emergencies and crises – may itself be the european ‘solution’. The debate becomes fuelled by light-speed interactive technology and conducted by a pluralistic mass of bodies and empowered individuals, not just by ministers and governments.

This kind of europe, far from lurching from treaty to treaty, amidst growing conflict and tension between economic consol-idation and political and cultural fragmentation, would be a club or networked web of communities in permanent session about its internal relationships, a ‘perpetual diet’, evolving common, and maybe diverging, interests and procedures.2 The so-called intergovernmental Conference of eu member states, convened from time to time to decide treaty changes, would become an expression (among others) of the union itself – the clearing house or hub of europe’s new nervous system.

genuinely concerned europeans, with the health of the union and the european neighbourhood at heart, should not now be deferring to the past but building on it and replacing it. There is no need to sound anti-european or xenophobic in doing so, and no need to talk of a two-tier europe, of inner and outer cores, of fast and slower tracks or associate status for some. no need to imagine a Britain outside europe – a geographical impossibility (although not a digital one). What has been achieved in past decades is magnificent and deserves deep respect.

But the successful pursuit of european effectiveness and prosperity now demands a completely different approach. it is diversity and sufficient agility to make unending adjustment to global requirements, and not some solidly crafted european uniformity, that must be both hymned and protected. This is the new music of european reform. And it should surely be the higher goal of an enlarged europe of free and independent nations, bound together in a whole variety of ways and inter-ests, differentiated by today’s relevant and real-life categories, not yesterday’s mindsets, that must take priority over the narrower aims of deeper old-style regional political integration and bloc building.



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The idea that unity and uniformity in every field have to be achieved, and a bloc solidarity welded together, can now be turned on its head. This kind of unity does not make markets, it paralyses them. Differentiation should now be the philosophy and theme, with functions carefully disaggregated and reas-sembled to fit today’s needs at today’s levels. europe prospered from the sixteenth century onwards, leaving ‘united’ China far behind, precisely because it was not fused and unified, nor comprehensively dominated by state officialdom – despite the internal centralism of parts of it – for example, france. The lesson of history is that the true market dynamic, the impulse for the discovery process, is difference and at least a healthy degree of disunity.

six tasks

on the pathway to the 2017 referendum, what should the Cameron strategy, the new approach to the revival and reuni-fication of a modern twenty-first-century europe, look like in detail? What would Britain actually be voting for – or against?

The first aim should be a determined re-sifting of the acquis communitaire – the 80,000-page catalogue of exclusive powers, or competences, amassed by and reserved to the european union collectively. A sift must be launched to comb out the practices and policies that are out of date, frankly socialistic and hostile to free market liberalisation, or bear no relation to today’s categories and concerns.

The task is to set in train a well-argued set of proposals for both circumscribing and repatriating powers in many fields, especially environmental and social, which in the information technology age can be better handled in a decentralised way at national level, and which were originally taken to the centre in a past age, when that seemed the best solution.

A second priority should be to reconcile eu trade policy with, and not allow it to be antagonistic to, the aims of global free trade as upheld by the World Trade organization. Many dedicated europe-builders have always believed and hoped that eu integration would pave the way to global free trade.


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But now these rhetorical hopes must be matched with policy. open regionalism must become the reality. for example, ideas for deliberately raising tariffs against imports from countries – mostly poorer ones – that have not imposed heavy anti-carbon penalties on their industries, much touted by low-carbon warriors, must be resisted and discarded.

Third, energies must also be summoned up to revisit the institutional issues that block the way to early enlargement of the union so as to bring in the new democracies, but to do so on terms that respect their independence and do not try to eradicate it. it is often argued that the smaller states of eastern europe cannot be allowed too much of an equal say in eu affairs in case they outvote the bigger nations on crucial matters. The riposte to this is not less democracy and small state representation, but more localism, more variations and less central accretion of central powers.

Probably the only way to tackle this set of challenges – unwelcome as it is to many – would be to draw up a new architecture for europe that will embed its confederal and nation-based character against a background of perpetual change and prevent the further drift of powers to the centre – the so-called ‘competence creep’.

The existing treaties of course provide a framework of sorts, but they are invariably out of date before the ink is dry on them. The issues of the digital age – e-commerce, new secu-rity threats, electronic money, borderless trade, instantaneous capital movements to the most favourable tax climates, prob-lems of capturing revenue on electronic trade and ‘weightless’ products, new functions barely dreamt about by the policy-makers of the past – all bound ahead of those labouring in the treaty amendment vineyard, so that their grapes are always rotten and their wine always undrinkable.

The eu lisbon Treaty was proclaimed at the time of its passage through national parliaments (2008/9) as the last eu treaty. nothing further would be needed to keep europe on the path to solid integration. With hindsight, although argued by many at the time, we can now see that lisbon was only the last of the rigid class of eu treaties (the last ‘battleship’ treaty – vast, vulnerable, cumbersome, costly). it would, so its advocates



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insisted, finally clarify and restore the role of national parlia-ments as the source of union legitimacy.3 it did no such thing. The role and powers of national parliaments remain disputed and still in need of much further strengthening.4

The whole language of europe has to be shifted away from ‘momentum’, inevitability, trains, buses, variable speeds and the rest, towards settlement combined with adaptability – an absolute, legal, halt to hierarchy construction and pyramid power-building, and the entrenchment of a much less ambitious and much more flexible and open european organisation. it would be a new dispensation which favoured europe’s smaller nations, even gave them the kind of equality that the senatorial system gives American states, very large or very small. it would become by that step alone a more democratic europe.

no one could convincingly claim that this was an anti-european or negative policy approach (although some will try). it would be far the most positive expression of european engagement yet to come from British policy-makers. it would be shifting the whole european unity concept into the infor-mational era and away from the deadening integrationist philosophy of the twentieth century.

When it comes to deciding on new entrants, the application procedures should be open to all european states west of the Russia federation. At the same time the full force of the acquis doctrine should be modified and the concept of second-class status for new applicants should be categorically rejected. The whole process should be given the maximum acceleration. The present timetable, which is drifting away into the mid-century, should not be tolerated. Turkey and Britain, two great nations full of history, should march together on this purpose.

looking back into the history of european unity, it is often asserted that the 1998 British presidency of the eu was the moment for the uK to take a confident lead in eu reform and in enlargement issues. But, in practice, the Presidential chair was never the best place from which to operate. Better oppor-tunities for real radicalism and new initiatives exist when the presidency role lies on other shoulders.

now, over a decade and a half later, it is high time to develop some of these with real energy and in a thoroughly


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positive and pro-european way. This should be the agenda for the Party of 23 January. This is where the advance to a new inter-governmental Conference (igC) has to begin.

in her scintillating work A Perilous Question, the histor ian Antonia fraser describes how pressures gradually built up for the 1832 great Reform Bill in Britain and how the debate took shape. something akin is now beginning on the european level about the absolute necessity for eu reform. The analogy could even be pressed further. The 1832 task was to get rid of the rotten boroughs which produced a Parliament disas-sociated from the people and dangerously out of touch with modern trends. The european Reform debate, and the treaty revision lying ahead, will need to address not dissimilar issues – including reform of a european Parliament elected by thinly democratic processes and remotely positioned from public concerns and popular wishes. Reform in this case will also need to go even further and alter the procedures and biases of the european Court of Justice away from one-sided commit-ment to more compression and consolidation of uneasy eu member states.

european insecurity

The list above does not include any revisions of common european security policy and defence, although initiatives in this field have been much in fashion. This is because wishful unrealities will impose their own practical constraints on some of the more fantastic aspirations.

it may very well be that joint-military forces can be deployed to undertake the sort of policing and peace-keeping tasks that soldiers nowadays are called upon, often by public demand pushing unwilling governments, to perform, increas-ingly combining both civil and military tasks under the general label of peace support and nation building.

But behind these strictly international and trans-national moves there is another agenda, which is to create a genuinely autonomous european military, peopled with men and women, regiments and units, supposedly loyal to an entity above their



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home nation states, and equipped to ‘go in’ (to what?) without having either to consult or to call upon the Americans.

And because even the most europe-minded of military thinkers is well aware that all military endeavour now depends almost entirely on very high and advanced technology, and not on size, weight of armour, artillery and rocket power or other outdated considerations, there is an agenda behind this agenda. This is that there should be, within the european union’s geographical confines, an industrial and technological capacity to rival America’s capabilities and provide europe’s army with the wherewithal to fight not only other armies, but the whole range of threats to the comfort and security of europe’s citizens that the scenario-setters can dream up.

one only has to set this wish-scene against the realities of globalised information and the interwoven pattern of european, Japanese, American, Taiwanese and mainland Chinese soft-ware and technological advance to see the absurdity of it. There must be few missiles from whatever source today, and wher-ever assembled, that do not include Asian-manufactured chips. in a global network environment, the concept of a separate and narrow euro-technology is nonsensical. no armed official of any european state can take a single step outside the military hQ or barrack gates without finding themselves enmeshed in this totally internationalised nexus of technology and commu-nications. The lowest-intensity kind of operation cannot be conducted without the communications infrastructure, the air transport back-up, and a dozen other technological props of American or Asiatic origin, from the fastest chip to the newest software. The proposal of the current Japanese administration, under its prime minister shinzo Abe, to liberalise the export of key Japanese defence-related technologies and items makes this even more likely.

The top security threat to the european order and to europe’s citizens now comes not from missiles or tanks but from cyber attacks. it is these which can now paralyse and then destroy whole communities and the entire civic order faster and more effectively than any conventional military action. for cyber warfare deterrence does not work. of course, a nation launching electronic warfare can be threatened with


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devastating response, but the attacker may not be a nation and may not even be traceable. in these circumstances, fear of deterrence cannot work because there is no one to deter. furthermore, cyber warfare knows no boundaries. The origins can be anywhere; the targets can be anywhere. how the guardians of national security can possibly deal with this is unclear. But one thing is completely clear. it is that neither prevention nor response can be organised on a purely european basis.

The dream of a genuinely separate european capability is a delusion of the pre-network and pre-cyber age. so, even more, is the dream of a separate european defence industry structure. These ‘yesterday’ ideas should have no place in europe’s prior-ities or in any agenda purporting to offer an innovative and modern approach towards european affairs in general.

end of an old road

Meanwhile, despite the persisting traces in official policy that ‘the future for Britain is in europe’, the British have in practice gone some way (again without much political articulation in support) towards a global stance in their affairs. some of those who originally saw the dynamic european Common Market as Britain’s salvation and the answer to ‘managed decline’ have begun to understand and acknowledge that the scales have tipped the other way. Despite a halt in growth (as elsewhere in the West), the British are now a prosperous people living in the fifth-largest economy – or part of the catallaxy – on earth behind the usA, China, Japan and germany. Britain has long ceased to be the poor relation of europe and has become a safer haven of prosperity and lower unemployment than the eu average (far, far lower than spain, italy, greece or Portugal), and a zone of high compatibility with global conditions.

Might not its global links (especially the Commonwealth network) give it huge and fresh advantages not available to its continental neighbours? if so, this would be a complete reversal of the popular view of Britain as the sick man of europe. When i first ventured the view in the house of



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Commons in the mid-1980s that the position for Britain was about to change quite radically, my comments were ridiculed in the press, so inured were commentators to the sick man story.5 People just could not believe that the relative position of Britain was changing so fast, and was continuing to change even more, or that Britain’s global interests were so large and being so successfully pursued.

like the concept of privatisation, the new global perspec-tive, and the adjustments needed to almost every policy and political utterance that follow from it, have all proved almost too difficult for europe’s chief architects and political elites to assimilate. Yet somehow the change of approach has to be engineered. someone has to take the lead. somehow, before it is too late, the policy-makers and opinion-formers must be persuaded to grasp what is actually happening in the world, not what their old theories and blueprints tell them ought to be happening.

Against this tapestry history of the european union issue to date, it is now possible to see, in the full daylight of the contin-uing crisis, that europe’s policy framers and advisers, and their critics, have come to the end of an old, old road. up to a point a diagnostic alliance exists and is there to be built upon. lord hannay, for example, at one stage Britain’s permanent representative at the eu in Brussels, mandarin par excellence, has written:

We need to be willing to set out confidently and compellingly a vision for the future of the european union which takes account of the visions of others and which does not solely consist of a long list of negative propositions, red lines and no-go areas.6

of course. But the road forks here. The confident and compel-ling vision boils down to a stronger security dimension and constant dialogue with the other larger member states – in other words, more europe with a bit added. others believe the vision involves compiling a wish list of things that we want to grab back from the eu, as it has evolved, layer upon layer, and then trying to negotiate to stay in the single market. This has


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been the favourite path of a younger generation of energetic and eager, but gloriously inexperienced, Westminster MPs.

But all these are the roads that peter out. We have been round both courses before and in the end they lead nowhere. The compelling vision leads to still more integration, while the younger enthusiasts at Westminster, calling for negotiations to ‘get back’ various powers, have found that there is no á la carte eu arrangement available and that their vision for Britain compels events only to withdrawal.

others again see the way forward in what turns out to be yet another version of a two-tier europe, with the inner core (again!) being the eurozone members and those who are alleged to want much greater integration and an outer ring of the less willing to integrate. in his book The Future of Europe, David owen argues for this sort of model. he would have the ‘core’ eurozone countries continuing to be called the european union, and the larger entity, embracing the outer non-core countries, notably the uK, being called the european Community.7

But this makes no sense. it rests on the heroic and implaus-ible assumption that the eurozone countries are indeed a united core, which plainly they are not and never will be. The interests both of europe and of the uK are that the union should stay together. This is where the real division, and the real danger, in modern europe lies, within the eurozone. The core is not a core; it is a split entity, a house divided, and by far the great-est threat to the unity of europe in the modern age. neither schism nor two tiers are the way forward. The eu crisis has now moved from the periphery to the core.

This now continues as the epicentre of the debate, both in Britain and throughout the eu. The case put forward for eu withdrawal rests ultimately on the conviction that the eurozone will cohere and solidify, forming a tight political union that is bound to exclude Britain’s different interests. in other words, the european project as originally conceived by its founding fathers in another age will happen; it will become a reality.

Yet evidence is mounting that points the other way. The message is reaching the political elites throughout the eu that they do not have the consent of their electorates for any further integration. on the contrary. The threat is of social



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collapse (say Church leaders among others) and street violence. There is no further progress in this direction. Road closed, try another route.

instead, the pressure from the people level – call it below or above – is for less ‘europe’, not more. That is why withdrawal is now defeatism and reform is opportunity.

reuniting europe

if in place of the present internal fissures, restorative visions are called for, the British one has to be profound, sincere and for the fundamental reform of the eu as a whole. This is where the Cameron 23 January speech struck such a relevant and central note – a surprise to most of the media and countless cynical commentators.

first, the case has to be made for greater differentiation within the european union, and this should be put forward as a positive policy for the eu as a whole rather than as a form of special pleading for uK ‘exceptionalism’. Differentiation is neither integration nor cherry-picking. it is bringing to the central issue of eu organisation, namely, who should have competence at which level, a modern and relevant focus. To push this along the British contribution has to be powerful, sustained, intellectually profound and backed by the best brains the nation can muster, both in and out of politics and diplomacy, in and out of the political parties, in and out of the professions, the universities, the think-tanks and the business world.

second, allies all round europe have to be won. They are certainly there and waiting. As the ongoing eu budget saga has confirmed, Britain is not alone in wanting new directions for the european union. We do, after all, have allies, both among member state governments and even more among member state peoples, as recent german popular support for a different europe has indicated. The isolation or marginalisation argu-ment that we hear so much of is nonsense. in a network there can be no such thing. everyone is perforce connected. Any action, any behaviour shift, any seismic event is transmitted, in


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greater or lesser strength, along the wires of the network. That is where we are.

Differentiation

however, calling for a reformed eu in general terms, or an alternative model – details to be specified later, King Lear style – is not remotely adequate. To make the case effectively and profoundly for an alternative path or model for the eu, we now need to draw on disciplines far outside the normal confines of diplomacy. scientists tell us every day that this is now an age not of centralism, top-down plans and blueprints, but of self-assembly, self-replication and legitimacy built from the bottom up.

The key concept that will matter in establishing the rela-tionship between member states and the eu institutions is differentiation. This is going to sound complicated, but that is the whole point. unravelling the existing treaties, with their decades of complexities, was always going to be intensely challenging and take us to much deeper levels than the almost lackadaisical champions of here-and-now withdrawal have understood.

The treaties invite us to think of powers and competences in aggregated chunks and groups that are frankly out of date. Areas such as social policy and employment policy are twentieth-century categories. in today’s world, they can be far more separated and disaggregated in deciding which functions should be of common concern, which should rest at national level – where the subsidiarity concept can be effectively applied, which it has not been in the past – and which should be tackled at a far-wider-than-europe level. The same could apply to agri-culture and environmental policies, which nowadays break down into all sorts of new categories.

for example, steps have now been taken towards a banking union within the eurozone countries. They cover only the larger banks (not, for example, germany’s hundreds of local sparkasse banks) and are by no means guaranteed success in rejuvenating the eu lending system. This is one more attempt



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– there will be many to come – to cope with the chronically sick euro system.

Yet, in fact, a supervised banking union is a classic example of a set of functions that need to be handled globally, not regionally, as financial experts in the City of london know well. That is why we have had Basel i, ii and now iii, to police and regulate banking practices the world over. And that is why it makes complete sense for Britain to keep its own glob-ally related financial system well clear of this narrow banking union endeavour, although with the appropriate safeguards against discrimination within the single market.

There is no reason at all why a policy of much more detailed differentiation in the treatment of various functions should lead to a split eu, which is exactly where the present drift of events is clearly leading. on the contrary, detailed unbundling and dissection of blocks of competences could lead to a far more varied and less divisive europe than we have today – and a europe far better adapted to the digital age. The analysts who keep telling us that there is no alternative either to locking ourselves into the integration process or withdrawing – notably in the columns of the Financial Times – are quite wrong, out of date and extrapolating yesterday into the future – the classic expert déformation professionelle. Policy-makers should be grateful to clear-thinking experts like frank Vibert, at the london school of economics, who have opened our minds to this second front in eu policy development in an age of complexity and to the strategy and philosophy of differen-tiation, which carries forward and greatly deepens the earlier concept of variable geometry in europe’s arrangement.8 Britain should not be afraid of taking the intellectual lead in eu policy. Many people around the union are waiting for her to do so.

nor should Britain be afraid of showing that the lisbon Treaty was based on a deeply flawed understanding of how the connected world now works, as many of us argued at the time. nor again should we be afraid of laying the groundwork for a revised and more flexible treaty and calling for a new igC to carry this forward. nor should there be any further delay while the search for a solution to the problems of the euro goes through endless false starts and unsustainable relaunches. The


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euro will continue to require constant and very expensive treat-ment to survive.

Meanwhile, the european union needs to be saved, reformed, updated and put on a far more secure basis of legitimacy and political support than it has in its present dysfunctional state. in turn, that will give Britain, as well as many other states, sensible and sustainable relationships with neighbours and friends within the eu and with the eu as a whole. it will also give us a modern and realistically differentiated breakdown between national and supranational powers, bilateral alli-ances and collectivism in europe, which will command popular support in any referendum, where we can rely on the shrewd and unconventional wisdom of the British people.

so it is time to put aside shopping lists and unrealistic want lists, and boldly come forward with strong pan-european ideas and proposals for a healthier union in a new global landscape which is taking shape. if, as we are told, treaty changes in the european union lie ahead anyway, Britain and its diplomats must ensure that they take the initiative in shaping them and helping to redirect europe in a sensible, workable and relevant direction to the benefit of all member states – including ourselves.

To gain strength and credibility, the Party of January 23 must draw from all major political parties in Britain. This is not impossible. While on the surface strong differences and deep divisions prevail, within the parties, between the parties, between the lobbies and interests and throughout the public arena a broad above-party consensus in fact exists. it is for europe but also for reform. high statesmanship and new illu-mination of international trends and Britain’s changed position in response to them are now required.

Political strategies aside this is going to be tough, practical work, a hard grind rather than a grand advance. The founders of the european union had a magnificent vision and dream. An age of joy would be an age of one united europe – a bastion of freedom, a bloc of social cohesion, a pillar of Western civi-lisation. Yet that is not how it has evolved. The whole context has changed and the currents of history have changed course in ways completely unpredicted.


8

The onWARD MARCh of follY

(With apologies to Barbara Tuchman)

fouad siniora, the former lebanese prime minister, was not happy to see me in his Beirut office. usually genial, he greeted me coldly. he was, he said, not pleased with the British.

Why? i asked. After all, we were old acquaintances.‘Because,’ he said (and i paraphrase): ‘you have vast experi-

ence of the Middle east region, you have understanding of how things work here in your bones; you start from a position of respect; you have deep historical perspective. And yet you fail to advise your American allies. You allow them to do a stupid thing. You actively support their destruction of iraq. for ages past, not hundreds of years but thousands of years, the Persians and their successors have been trying to push westwards, to gain ascendancy in the whole region, to be top dog. The great barrier to their ambitions was the land and its masters between the two rivers – mostly what is now iraq. You smash down the barrier, or allow the American zealots to do so. You fail to tell them the consequences. now we see those consequences and they are good, very good, for iran and disastrous for the rest of us, and possibly for the whole West. You British have failed.’


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the onward march of folly

his message was both loaded and clear. As a lapdog of Washington, or indeed a poodle of Brussels, and the ever-quarrelling Continental europeans, Britain was going to be little good to anyone. its value as a world force lay in its inde-pendence and interdependence. That, i believe, was why fouad siniora was unhappy that day.1

And surely he was right. The British must get their rela-tionships both with the usA and with the eu balanced and right. To be effective, the British must also have full confidence in their own capacities and our special position in the new world landscape.

The two previous chapters have addressed the european side of the repositioning task. it has been shown how more independence from the european integration process does not mean isolation. on the contrary, it means more interdependence than ever. But how does Britain handle the other transatlantic side? here, too, we have to find a more comfortable relation-ship if the way is to be cleared for a new positioning and a new role. here, too, the impulse for leadership has to give way to the understanding of partnership.

A new understanding could well begin by addressing the fouad siniora point. in the network age of continuous infor-mation and opinion flows the concept of democracy – people’s rule – needing new, much more careful and much deeper under-standing than Washington strategists have seemed prepared to give it. The Westminster political and parliamentary model is for Westminster and Britain. The congressional model is for Washington and America. Both are evolving and in need of constant repair. neither are easily, or even usefully, exportable in full, and probably never were.

in the repositioning process, Britain badly needs to recal-ibrate its relationship with America and with Washington thinking. The language needs to be that of partnership and friendship, not compliance and subservience. To get things straight, we need to start differentiating from American stances not just at the policy level but also at a deeper intellectual level.

The heart of the problem lies in definitions. Democracy takes different shapes in different cultural settings and is anyway



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taking new shapes in the half-real, half-virtual world that the digital revolution has brought about. Democracy drawn from tribal traditions can, and does, take quite different forms to Western stereotypes. Parts of American officialdom hold a shrivelled and deeply reductionist understanding of democracy as merely a type of government based on winning a majority of seats or votes in an election. from this there springs a kind of missionary zeal, well-intentioned but narrow, which in turn has opened the gates to libertarian intervention on a grand scale, imposing democracy by force, ‘draining the Middle east swamp’, to the whole Responsibility to Protect doctrine and all the rest – adventures in which Tony Blair said (speech in Chicago 2002): ‘We are with you to the end.’

By contrast, in the new world conditions it makes increasing sense for Britain to distance itself clearly from this almost messianic version of democratic development, and it is well-equipped, by its history and character, to do so. Britain should make it repeatedly clear that it wants to see no more wars entered into or fought on a false understanding of liberal democracy and its workings – or of the relevance of Western versions to other nations and societies, and other cultures and traditions. We ought to know by now (and have disap-pointed Mr siniora and many others by seeming to forget) that at root, democracy thrives not on missionary zeal, and not on the arrogance which goes with that mindset, let alone via over-whelming force (aka liberal intervention), but on humility. This in turn demands acute and constant awareness of one’s own limits, and it requires a general inclination embedded in the breast of all those who hold power and influence to use it with restraint. it is a question, in edmund Burke’s memor-able phrase, of remembering and deferring to ‘the policeman within each one of us’. it cannot be done just by laws and regu-lations, fond though certain sorts of democrats are of calling constantly for more of them.

People in the developing world surely want and need what everyone wants: jobs, education, a better future for their chil-dren. They don’t necessarily want ballot-box elections every year, or Western-style constitutions; that may not even be the best route to representative and accountable government. in the


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words of sherard Cowper-Coles: ‘the idea that Western models can be parachuted in from outside is the height of hubris’.2 in strife-torn nations where whole families are suffering beyond what any of us can imagine now, surely the first priorities are safety, security, representative and accountable govern-ment, and, above all, a better future for their children. had Mohamed Morsi and his Muslim Brotherhood government in egypt understood the true nature of democratic values they might have survived longer.

A moment of epochal change in the meaning and insti-tutions of democracy may anyway now have been reached, brought about by the onset of the information revolution and the arrival of the age of interactivity. like it or not, and with many of the forefathers of modern democracy turning in their graves, the democratic process is now well and truly on the street, thanks to broadband, mobile telephones, the internet and social media. Yesterday’s feared mob has become today’s e-enabled network, or set of networks.

This is not the ‘democratic’ model or product the Americans, or any Western missionary-minded governments or lobbies, thought they were exporting. it is not the kind of product that can be neatly corralled or transmitted in a generic, one-size-fits-all package. The decisive and shaping influences are always going to be local and always specific to the country or culture within which they are growing. instead of being seen as a readily transplantable system, democracy has now to be seen as an envelope of principles and values for the flour-ishing of different customs and practices, often laden with both wisdom and history, rather than the import or impo-sition of a pre-packaged (and usually alien) set of rules and procedures.

american confusion

Today’s democratic model, wherever planted, has to be a shared, scrutinised, monitored, contested and constrained process. The microchip allows nothing less. Autocrats, erst-while dictators, partial democrats, whatever the political



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culture – all have to bow to the pressures from beneath with a new respect and sincerity.

This the British ought to understand, but do Americans? has President obama’s second term opened Washington minds to the errors of the past and the new realities of governance in the internet age? it ought to have done, given that America has been the home of brilliant innovation and electronic miracle-making. But the signs are not encouraging.

Those who were looking for a new and more realistic tone in American foreign policy did not find it in the second obama inaugural speech. in fact, they found very little about American foreign policy or attitudes to world developments at all.

This is ominous. A decade of American foreign policy confusion and misunderstanding, ever since the horror of 9/11, has at some stage to be unravelled and reassembled. But so far – silence.

over the last 15 years, the chorus from the us policy establishment has been one of repeated calls for America to reassume its leadership role in world affairs, to take the helm, to reassert the nation’s role as number one superpower. This has been so right across the political spectrum, with leading voices of presidential candidates, presidents, their campaigners and closest advisers all asking the same question – namely, how to get America back in charge, how to reverse foreign policy failure and reputational decline in the Middle east, how once again to become the global leader.

But it could well be the wrong question and it leads to the wrong answers, both for the usA and for Britain’s relationship with it. There is no visible world yearning for a powerful and resurgent America to step forward to dominate world affairs, and impose its template on every regional and global issue. There is no prepared pedestal for America to climb back on to and raise the torch of freedom and democracy. That world has vanished. ‘An international order that reflects our values’ – the words of former secretary of state Condoleezza Rice – is not available.

in a network world gone ‘live’ with instant connectivity, no one is on top or in a position to impose ‘our values’. Behaviour patterns on the part of any nation within the network can


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certainly shake the whole system, American behaviour especially so, given the sheer size of the usA within the world economy. But national or regional leaders who think that size still translates into command and dominance, who believe that size and weight translate into superior value systems, are deluding themselves, and – equally worryingly – their peoples.

The delusion lies very deep in American policy. Back in 2008 there was the late Richard holbrooke calling repeatedly for America to reassume the leadership role in world affairs as the new obama platform took shape (Foreign Affairs Quarterly). There was the arch-realist henry Kissinger, half sensing the change to a more pluralist world, urging that:

while traditional patterns are in transition and the very basis of experience and knowledge is being revolutionised, America’s ultimate challenge is to transform its power into moral consensus, promoting its values not by imposition but by their willing acceptance in a world that, for all its seeming resistance, desperately needs enlightened leadership.

‘A more sensitive American policy is essential,’ Kissinger urged, adding with piercing realism that ‘America’s continuing quest for hegemony was the surest way to destroy the values that made America great’ – to which one should surely add first, ‘Amen’; and second, a reminder to Britain’s policy-makers to stay well clear of all this.3

others joined in during the first decade of the twenty-first century. from the Republican side there was John McCain, battle-hardened and brave, but like his colleagues adamant that the task was us leadership. on the other side of the Atlantic there were echoing words from the then British foreign secretary, David Miliband, that ‘Britain must stead-fastly pursue a moral mission to spread democracy throughout the world, in spite of’, he added, perhaps pausing for thought before he rushed on, ‘mistakes made in iraq and Afghanistan’. But this did not shake his belief that ‘the goal of spreading democracy should be a great progressive project.’4 no self-doubt there about the changing nature of the democracy



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‘product’, Britain’s qualifications to be its exporter, the possible existence of other democratic forms, or the suitability of other cultures to receive and digest the Western version.

has the American tone changed under the first and second obama administrations? not really. or not at least for obama’s secretary of state hillary Clinton during her term before her retirement. in the New Statesman of July 2012 she was still arguing that the new international order ‘depends on American economic, military and diplomatic leadership’, although acknowledging that ‘new regional and global centres of influence are quickly emerging’.

And so they are. is it perceived that new centres of influence also means new centres of hostility in a pattern of unparal-leled fragmentation – a question put with telling clarity by sir lawrence freedman (in A Choice of Enemies) – with all the resulting new contradictions and conflicts and new dangers of confusion in foreign policy aims? sir lawrence could not help being ‘struck by how the united states had managed to find itself in conflict with iran, iraq and Al-Qaeda at the same time, all of which were antagonistic to each other’!

The confusion has long since spread to American policy towards the european union. state Department officials have continued their prolonged campaign urging Britain to inte-grate into the european union, apparently blissfully unaware of the changing nature of the whole european process under the impact of new world conditions and new network pres-sures. even President obama has joined in this grievously ill-informed process.

finally, what is one to make of assertions and reports that America is ‘turning east’ in its foreign policy preoccupations? Probably not very much. That language, too, seems to reflect a slim grasp of the new realities of a networked world. With or without dependence on Middle east oil and gas, America is as wired up to Middle east events and instabilities as it is to Asian developments. in a networked world there is no choice to be had between one region and another. All are vulnerable to the same shocks and distortions. The dangers to America’s physical security arising from Middle east tensions, from jihadism or even from the spill-over effects of the islamic civil war between


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shia and sunni Muslims, which has been fought out with such savagery, are no less and no greater than before. America’s tortured concern about israel remains undiminished. America’s fears about iran’s nuclear ambitions, or what israel might do to frustrate them, stay the same. American interests in a reason-ably stable world oil market remain strong, wherever the oil is produced and in whichever consumer direction it goes.

it may well be that the American ways of expressing these interests lack the subtlety and sensitivity that successful modern networking requires. large displays of military strength may well have ceased to be the way to win hearts and minds – in fact, they may be achieving the opposite. And it may be that here as elsewhere, Britain, with its own experience in the region, might want to stay clearer of American strategy than it chose to do in the case of the iraq invasion. A more distinc-tive British role would certainly be in tune with the promotion of Britain’s own interests and with its repositioning in a less West-dominated world. But America is now no more in a posi-tion to pick and choose spheres of influence, or switch from one zone to another, than the rest of the world. it is connected to events everywhere.

There are, as often, two Americas to watch and with which to deal. one is as described above – confused, uneasy and prone to misjudgment and error in the puzzlingly changed world scene. The other is refreshed yet again with the old vitality and innovative brilliance, with low-cost power lifting the American economy out of the doldrums steadily and strongly. This is a trend that does not fit into the simplistic picture of Asia booming while the West declines. european decline, maybe – if its ruling mandarinate persists in suffo-cating it in regulations and taxation, in chilling emulation of the Ming dynasty bureaucrats who crushed China and took it out of global progress for 600 years. But America may be saving itself, in the nick of time, by new technology. Public political failure and confused world policy has been mercifully balanced by brilliant innovation and ingenuity – not, of course, for the first time in American history. As will be described, a prominent factor in the renewed surge of us economic vitality is the development at record speed of a colossal cheap energy



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sector, delivered thanks to improved techniques of gas and oil recovery – the so-called shale gas and oil revolution. The consequences of this for Britain and its fellow Commonwealth member states round the planet are going to prove increasingly significant – more of this later.

for Britain, William hague’s adage of a transatlantic relationship that is ‘solid but not slavish’ is the right one to follow. it is not as often heard in high circles as it should be. Britain has everything to lose by being perceived either as Washington’s poodle and slavish emulator, or as one piece in a broader european union foreign policy over which it has only marginal influence.

America’s economic weight and power, now reinvigorated after the lehman crash of 2008 by waves of ingenuity and by cheap power, cannot be questioned. But America’s persuasive power and influence can no longer be measured by military might and the capacity for overwhelming force. A confused American public longs to clarify their nation’s strategic purpose and whether, and to what extent, engagement and war involve-ment in the old style are justified or worthwhile.

There is no future at all in having a British leadership that appears intent on doing everything the usA tells it. neither perception allows the full value of British influence and culture, drawing from deep wells of goodwill towards all things British right round the world, to be developed. neither perception allows for the vastly favourable positioning of Britain in the new global network and in the new Commonwealth network within that one.

in nation after nation, and across continents, the British strength lies in its softpower linkages, of which the Commonwealth network is one of the finest transmis-sion networks. Chapter 11 will explain how this softpower dimension is taking over a major part of the relationship and international involvement scene. Yet alongside persists a danger – the danger that Britain will continue to be seen as no more than a surrogate for Washington policy and can be ignored, or will be seen as no more than a minor player in european union foreign policy ambitions and can therefore again be ignored.


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A repositioned and reinvigorated Britain can and must put these perceptions behind it. Things are now different. A leading British newspaper editor reiterates his view that ‘the us is still the most powerful nation on earth’. it is not. The digital web, linking billions of messages and contacts across the planet every minute and every hour, is now the most powerful ‘nation’ on earth. We are all the players within it.


9

The eConoMisTs’ shADoW

We have indeed at this moment little cause for pride: as a profession we have made a mess of things.

Friedrich von Hayek in his Nobel prize lecture, 1974

from The lord Annan CBeDear David,i cannot resist sending you a fan letter after all these years

on your speech on november 9th on the Monetary Policy Committee – and the fact that eric Roll commended it only made me realise again how apposite it was.

i have long had a melancholy feeling that economics is no longer an interesting subject.

i first started when the pundits at Cambridge began to spend their time building ‘models’. i do so like your phrase that ‘modern economists are really artists pretending to be scientists’.

i suspect that i am too old to read the works of the Austrian school, to which you refer – unless of course you are referring to the days of the interwar years.

With all good wishesYours evernoel Annan11th november 1999


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the economists’ shadow

in effect we are watching, although not always seeing, the disintegration of much of the economic machinery and admin-istrative apparatus of which the modern state has come to be composed, and of the intellectual beliefs on which it was founded. A whole structure of state activity, of central insti-tutions and of procedures which has grown up over a period of between sixty and seventy years, roughly from the birth of modern macro-economic thinking and advice, and which has expanded massively (its progress being of course vastly accel-erated by the overriding needs of the state during the second World War), is now becoming obsolete.

Blind Victory, p.185, by David Howell (Hamish Hamilton, 1986)

To a worrying extent Britain’s foreign policy has become trapped in bad economics. The economists, or at least many of them, have not been at all helpful in illuminating the way forward. Classic economic theory and analysis is proving a poor and confusing guide to Britain’s true position in the world. it does not tell us where Britain has been or where it now is, let alone where it is heading, or where new national priorities should lie. for all its pseudo-scientific pretensions, economics does not seem to have come to terms with the digital age. it seems constantly caught out by technological innovation and by political events – not just nassim Taleb’s famous black swans, but by completely predictable cycles and spikes in the graph of human behaviour and progress.1 And does the body economic understand how a digitally connected planet, in continuous, high-frequency interactive exchange, favours and demands new international relationships, such as the Commonwealth network provides? not much sign of that!

But this detachment from reality should not be surprising. inside the economics profession, a kind of civil war has been raging for a long while. so there are bound to be confused and confusing signals emerging about the economy realities and the right policies government should follow.

The battle most often depicted is between the Keynesians and the monetarists, with wonderfully abstruse disputes being argued out about how much debt an economy can carry without



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tanking, whether growth can best be induced by increased public spending, or slower cuts in public spending, or keeping interest rates really low, or tax cuts or any other policy stim-ulus. Common sense would suggest that measuring how deep debt and borrowing should go is a matter that varies from time to time and circumstance to circumstance in different socie-ties, but that on the whole a debt overload feels uncomfortable, weakens confidence generally and is to be avoided, quite aside from being very burdensome in interest payments. But in such debates, common sense tends to get swept aside.

Yet this is really all a sideshow. There is a much deeper fissure in the economic governance debate – so deep that ongoing commentary and analysis hardly penetrates it, yet it is the source of delusions of power and persistence that play a major part in holding Britain back. The fissure is between those who persist in viewing the national economy as a machine and entity that can be steered, tuned, manoeuvred, engineered, kick-started, rebalanced and so on; and those who regard the economy not as a neat system or mechanism at all, but as a process, endlessly evolving, hugely complex, driven constantly forward by innovation.

Both Keynesians (although probably not Keynes himself if he were around) and the monetary aficionados are in the first camp and have great influence, even while contradicting each other. The latter – those who view economic life as an innovation-driven process, not a machine – draw wisdom from a different economic tradition, more closely associated with Joseph schumpeter and the Austrian school of economists, who were far more pragmatic and less theory-ridden about how economic life proceeds – or gets halted. for them the one sacred task is to avoid too much credit creation, as this always ends in bursting bubbles. The rest is a matter of ceaseless inno-vation, destruction and renewal, driven by human beings with all their frailties, and of course governed by the wider environ-ment and the degree to which political freedom and stability allow enterprise to flourish.

What have all these obscure and unending arguments got to do with Britain’s position today, or tomorrow, or with the world’s new networks of communication and power?


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The answer is everything, because wrong economists’ inter-pretations of where the country stands, or where it should be heading, can and do affect the whole direction of foreign policy, our choice of friends and the focus of our efforts.

if you believe the systems-mongers, wielding their eco-nomic tools as they peer into and tinker with what they believe to be the economic machine, this suggests that an island econ-omy like Britain is a pretty hopeless case. it would do better, goes the prescription, to join as tightly as possible with the neighbouring continental bloc, and allow Britain’s over-seas economic interests to be protected and pursued by the eu collectively and by the permanent transfer of authority to higher levels. That would seem to be the obvious way, as in the past, to expand trade and maybe secure more open busi-ness arrangements with other great powers, such as China, Japan and the united states. The British services sector is too big, the manufacturing sector is too small, the whole eco-nomic machine is rusty and in need of repair. not a day goes by without calls from experts and analysts for its rebalancing, although how that is to be achieved and by what measures tends to trail off into a string of minor practicalities. The 364 economists who wrote to Margaret Thatcher and geoffrey howe in 1981 attacking current policy and predicting disaster had all tumbled into this trap. There was something – a prod to the economic machine here, a kick there – that must be done. They were blind to the circumstances and blind to the real mainsprings of economic progress that were going to (and did) lead to massive recovery.

A central problem with this kind of approach, and the state of mind underlying it, is that it takes little or no account of the outside context or of events and political shocks, which may alter everything. it is always assumed that other things will be ‘equal’. But they never are. The prediction and forecasting record of orthodox economics has been truly shocking. With noble exceptions, the mainstream majority failed to see the rise of the internet age, failed to see the great Asian currency turmoil of the 1990s, and failed to see the consequences of the great sub-prime lending boom in America and the world crisis following the collapse of lehmann Brothers Bank.



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‘it’s awful – why did nobody see it coming?’ was the telling question from Queen elizabeth ii after the 2007 crash. some of course did, but they were not in the mainstream and their voices were not heard. ‘it seems that no one has got a clue what’s going on in our economy,’ added Jeremy Warner, one of the franker and more profound financial column-ists in Britain.

Too much focus on economic theory has also helped distort the flow of comment about Margaret Thatcher’s legacy, following her death in April 2013. A picture was built up, both by critics and friends, of a leader wedded to free market ideology and to economic theory. in fact, her central commit-ment was more pragmatic than theoretical. it was to the release of creative and innovative spirits, from both labour market and capital market straightjackets, the curbing of a monopolistic and inflated state sector, and above all the unifying spread of wealth to as many as possible. earners would become owners. Workers would become capitalists, with the security and dignity that ownership brought with it. This was a vision going far beyond mechanistic or theoretical economics. We had not then yet entered the network world, but the whole emphasis was far more favourable to the preparation of Britain for the dawning information and globalisation age than any kind of theorists’ economic gruel.

Connectivity on today’s scale carries the debate much further. Behaviour changes at every point in the chain. Microeconomic doubts have spread to the heart of macroeconomic theory, with bitter recriminations among economists – and politicians – about the repeated failures of economists to anticipate financial crisis or factor in major aspects of economic and financial life, such as bank debt and the inevitability of panics and cycles.

A networked world brings an entirely new dimension to the pattern of international relations and to the type of diplo-macy required to cope with it. Continuous and high-frequency communication at every level both between governments and organisations – public and private – and between peoples creates an interdependence of the greatest intensity from which no country – even a rogue state – can completely escape. isolation becomes impossible.


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What this means is that ructions or disturbances anywhere in the network of nations sends tremors along the wires to all others. if the tremors are small they may make no impact, but if they are bigger or prolonged they enter into the concerns and workings of every other part of the network with stag-gering rapidity. A terrorist attack anywhere is a terrorist attack everywhere, with careful lessons being drawn throughout the network. financial chaos in one small island shakes the whole global financial web. Political rivalries in one country are fought out on the streets of another, often violently. The video in every mobile means that no scenes go un-transmitted. news and media networks no longer have the slightest control over what is fed within seconds into the social electronic networks across the planet. international involvement is absolute. exposure is not optional, even for the most determinedly isola-tionist regimes or police states, such as north Korea. neither China nor, more recently, Myanmar (also known as Burma) found they could opt out, try hard as they did. Authoritarian nations can attempt to block out information and to isolate their own internal ‘intranets’ from outside influences and views held to disrupt the domestic regime. however, their task gets constantly harder as new technologies find a way round every obstacle.

The roots of this inescapable connectivity lie in the quite different rules of behaviour that people, and therefore states, and therefore those who manage relations between states, find they have to follow in a network system.

in this sort of system, opinions and the policies they generate are far less fixed and far more prone to rapid change. This makes international agreement through binding treaties far harder to establish. governments pushed this way and that by volatile but increasing empowered opinion, pounding electronically and continuously on harassed policy-makers, find it harder and harder to stick to commitments, and therefore to enter into them in the first place. fashion, and popular ‘opinion’, and therefore tenable government lines, may change in seconds. The impulse to copy others, to adopt new trends from elsewhere, to pick up instantaneously new streams of thinking, may swing round with the violence



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of a wind change on the high seas, sending the rigging and masts of established policies and agreement crashing down.

The age of interconnectivity also means that no one state, large or small, can be neglected. The very idea of pigeonholing some states as peripheral or marginal is rendered irrelevant. every state, however small or distant it may seem from one vantage point, becomes a link in the chain, and in a chain the weakest link decides the fate of the strongest.

one side effect of this is that nations that want to stay plugged into the network, and have at least some control over their position within it, cannot afford to neglect or margin-alise any other countries. The initial view in the network age that embassies would become superfluous has turned out to be its opposite. The closest possible familiarity with every other state, combined with the closest possible appreciation of, and respect for, the history, culture and attitudes of every other state, becomes a necessity.

Conventional economic theory does not lead to this point. it is a trail that takes us away from modern reality instead of towards it.

As Paul ormerod points out in Positive Linking: How Networks can Revolutionise the World, the network effect means that:

people are using rules of behaviour which are quite different from those of the behavioural postulates of economics in which individuals carefully gather information about alter-native choices or courses of action and match them against their own fixed preferences. instead they may copy, they may imitate, the behaviour of others.2

Perhaps even more than ormerod accepts, it is the high-frequency information exchange system, the blogging, the social networks, the continuous connectivity, visual and verbal, which makes this pattern not only possible but inevitable – and with direct and massive impact on all international relation-ships at all levels.


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the record of failure

in his book Misunderstanding Financial Crises (oxford university Press, 2012),3 gary gorton cites both Paul Volker and Paul Krugman in support of his devastating critique of orthodox economic theories. economists, he shows, have failed again and again to foresee or predict major crises and upheavals. Volker, reflecting on the 2008 lehman Brothers world financial storm, maintained that ‘it should be clear that among the causes of the recent crisis was an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance’.

Paul Krugman – nobel Prize winner in 2008 – goes further and says that ‘as i see it the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth’ (Krugman 2009, quoted in gorton).

Perhaps most illuminating of all is the work of Professor Wolfgang Kasper. he roundly denounces the deterministic neo-classical economists, with their unworldly assumptions of perfect knowledge and their narrow vision of economics, as a closed-end system.

The pattern of activities we call market capitalism, he goes on, depends not on supply and demand curves, nor on national economic policies, but on institutions, procedures and rules without which nothing works. indeed, he says, ‘capitalism is a rule system, and one which only functions when the laws and institutions around it are friendly, protect individual spheres of freedom, encourage risk and innovation, promote competition and reward enterprise’.4

These world-famous authorities cannot just be brushed aside by a tarnished economics profession. But it will be seen that they are not saying something very new or very different from the quotations at the beginning of this chapter, all from the relatively distant past. indeed, one could even say (a bit unkindly) that they have arrived at their correct insights devas-tatingly late in the day, and that this itself says something telling about the state of thinking among the economics profession.5



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The civil war is having effects well beyond the Common Room and learned journals. The best current accounts of it, in my judgment, are books such as Debunking Economics by the irrepressible steve Keen, and the many books by Paul ormerod, already mentioned. But the quarrel is clouding and distorting policy thinking and analysis at every level.

The particular concern here is with the link between errors of economics, consequent errors in national policy and errors (or misguided directions) in international relations.

The basic starting point for understanding economic reality is the measurement of economic activity – the point to which lord Keynes returns more than once. it is for this a single insight that the brilliant, but not so well-known Richard stone, with whom i had a brief acquaintance, won the nobel Prize.

Clarity at this basic level is essential if national interests are to be properly defined, and appropriately pursued and defended both in diplomatic fora and in ministerial exchanges, as well as at the un – in fact, everywhere that challenges to national policy and interests can arise.

The failure to explain, let alone predict, has been almost total, as is documented in graphic detail in gary gorton’s work on misunderstanding financial crises. The danger – more than that, the likelihood – that foreign policy objectives and involvements may be undermined by invalid economic argumentation is high.

in the age of super-complex financial instruments and electronic market manipulation at the speed of light, the illu-mination that economists can throw on what is actually happening becomes weaker and weaker.

Being led by the nose

The concept of the political commitment to preservation of a european single market is a good example of theory leading policy-makers by the nose. There is flawed economic reasoning behind it.

The single market is portrayed as a zone of goods and services being exchanged freely and under common rules. The european union market is claimed to be the world’s biggest.


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for a start, it is probably not. Trading on eBay and other platforms creates a far larger market space than the european union. Trade throughout the societies of south east Asian markets, through the AseAn region and throughout the massive consumer markets of the Pacific rim, with or without the tariffs, quotas and other restrictions, probably constitutes an even bigger market in terms of imports, exports and move-ments across frontiers of goods and services than the whole european market can offer.

This would be challengeable if it could be proved that the eu really was a single market within protective tariff walls. But of course it is not. The entire space is riddled with protectionist devices, non-tariff barriers designed to prevent trade flows and deliberate political distortions blocking free movement of goods, capital and labour. for services the single market is almost non-existent – exactly the area where Britain needs to play to its strengths.

nor do the trade statistics tell an accurate eu story. exports for third countries are clocked in through the netherlands – although no one knows how big they are. A clearer distor-tion arises when, for example, Rolls-Royce aero engines are supplied to foreign buyers. since they have to be fitted by Airbus, all are registered as uK exports to the eu.

The flows that matter between economies are the capital investment ones. Most corporations, if they want to penetrate new national markets, start with investment in either existing or new capacity, or in well-established supply chains within the target market. first find your local partner.

The key to this kind of success has little to do with common external tariffs now, and will have even less in future. far more significant and influential in company decisions is deep knowledge about a local market, its procedures, standards, forms of commercial law, accounting standards, language compatibilities, social connections, education patterns and general attitudes to business. These are now the drivers behind company expansion decisions.

An emerging example of this kind of single trading and investment area is the Commonwealth network, the very area on which Britain turned its back when negotiating to join the



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then european economic Community. Chapter 11 will explain how British softpower and network skills can be deployed to growing advantage across Commonwealth and neigh-bouring markets.

The troubling conclusion emerges that concentrating diplo-matic resources on safeguarding the eu single market may be defending the wrong target. in commercial terms it may not even matter very much whether Britain is in or out of the european union, although there remain other strong argu-ments for being good europeans within the right modern framework, as we saw in Chapter 4.

incentivising British exporters now depends far more on mobilising local initiatives and networks, in a context of trust and goodwill, than on painstakingly negotiated treaties or free trade agreements. it is Chambers of Commerce from every corner of the British isles, rather than Whitehall agencies, that need to be at the cutting edge in promoting new relation-ships. The classic Ricardian theory of comparative advantage becomes a generality of fading usefulness. Ricardo spoke of trade in some products between two countries being worth-while, even where one of the countries was more proficient at producing the item on all counts. But such bilateral simplicities now barely exist. This is not how trade flows, or government trade policies, are any longer determined. it does not explain what is actually happening.

These economic doubts and disputes are being fought out against a backdrop of transformation in the whole global trading and economic landscape. Chapter 1 referred to massive technological forces just on the horizon, which will work decisively in localising instead of centralising, and exerting immense centrifugal pressures on all societies. The rapidly growing multi-polarity of the world landscape compounds the complexity, and the unfamiliarity, of the new scene.

Almost half the world’s biggest economies belong in what used to be called the emerging powers group. These economies are now growing three times faster than developed markets. The pace of integration through cross-border flows of capital, technology and commodities has left conventional pictures of world trade far behind, as well as conventional (classical)


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economic analysis of what is supposed to be going on in the international economy.

in the words of Professor Anilk gupta, at the smith school of Business of the university of Maryland, the changing pattern is being driven by a new generation of communica-tion technologies that is making ‘high fidelity collaboration among geographically dispersed individuals easier and cheaper’. The world economy, he adds, is going through not a decoupling – the fashionable phrase of a year or so ago – but a rebalancing.6

in short, the nature of international economic activity has undergone a character change. shifts of power from the centre to the network nodes change the behaviour of markets and of businesses – and must do the same for governments seeking to pursue national economic interests. gupta describes how some of the more agile major corporations round the world have realised the significance of what is occurring and have spread their activities across a series of regional hubs, giving them their own authority to link with each other and diver-sify. he mentions ge, iBM, Cisco, P&g and McKinsey. These corporations have faced the choice between being yesterday’s behemoths and tomorrow’s decentralised and locally oriented business, adjusting swiftly to the cultures and market tastes of their separate areas. They have made that choice, as many others are doing.

The same kind of considerations apply to a nation’s over-seas policy strategies – and to the strategies of major trading nations like Britain in particular. it is the more agile nations that are now spreading their interests round the world, diver-sifying supply sources and seeking to build up layer upon layer of trust friendship, common values, common standards and common procedures. That is networking, and that, so it happens, is the Commonwealth of nations.

What is required from the economics profession is a marriage of their thinking both with political uncertainties and with new trading realities. The world and its policy framers will then at last begin to get valid guidance and illumination to enable them to reshape their procedures, techniques and policy goals.



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We come back to Professor Kasper again. it is all a question of the right institutions, procedures and rules – the only possible conditions in which innovation, the key driver of economic advance, flourishes. innovation has to become the central focus and preoccupation. innovation is survival. in a whole range of areas in Britain it is already occurring, particularly in specialist and luxury fields, where the world is scrambling for British quality, excellence and taste in everything from motorcars to clothing, but also in the creative arts, in design, and massively in the professional services, the law, accountancy, educational methods and medicine.

This is not what the economists, or most of them, said would or should happen, but it is nonetheless occurring. success should be reinforced, not disdained.

With this new reality as the background, British diplo-matic resources would probably do best to concentrate their energies and undoubted skills on building up a range of new softpower links with the emerging markets, winning, instead of being a latecomer or runner-up, in the global race, using Commonwealth markets and their neighbours as the best connections in this process (see Chapter 10). With this there needs to go a deeper understanding of the central role of innovation in economic and social progress than it seems to attract currently. understanding that innovation – its funding, its incentivising, its rewarding – should be the central home priority, as well as grasping and reacting to the nature of new markets and the centrality of investment flows, both ways, in shaping trade and promoting exports (and thereby domestic prosperity and employment) must be foremost.

in the mid-nineteenth century, Japan decided that it had to leap into the modern era, and it would acquire and copy every possible innovation and new technology from the West on which hands could be laid. This was the great Meiji Restoration or Renewal. it would seek to bring new methods and trans-form Japanese economic performance by importing the best from the West, without (if possible) allowing foreign practices to undermine Japanese innate strengths and cultural values. it would turn Japan into a modern nation. There was no question of delay in those days while theories of economic management


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and growth were argued out by economists. The focus was simple, central and decisive. it was on grasping, copying and applying new technologies at every level of production and economic activity. To a large extent it succeeded – until crazed twentieth-century militarism threw it all away.

Britain now needs the same Meiji approach in reverse. There has to be total readiness to swallow past pride, and take new methods and new technologies from outside europe and from the new high-tech economies of the age wherever they can be found.

This is the world up-ended, the economics of the twen-tieth century stood on their head. Do we now have the agility, the flair, the boldness and the foresight to move successfully into this era?


10

The eneRgY iMBRoglio

imbroglio: a state of confused entanglement: a complicated or difficult situation: a serious misunderstanding.

Oxford English Dictionary

on Thursday 18 october 1979, i laid before the Cabinet my proposals for renewing and transforming Britain’s civil nuclear industry. There were to be nine new pressurised water reac-tors (PWRs) with a capacity of 15,000 megawatts. There was no mention in my paper of carbon dioxide or nuclear power’s low-carbon qualities. The emphasis was straightforwardly on national energy security.

i knew what the outcome of the meeting would be. The plan would be agreed. for once the usual Treasury objections did not matter. The prime minister, Margaret Thatcher, was completely on side.

later i announced the decision in the house of Commons.But what governments announce, or predict, and what

actually happens are two different things. only one reactor was ever built (at sizewell in suffolk). The rest were lost in a sea of bad economics, political fears, fears of more disasters


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the energy imbroglio

like Chernobyl, planning challenges, much cheaper fuel alter-natives and technical doubts.

What if the plan had worked? Many of the dilemmas and contradictions of today’s energy scene in Britain would have been escaped. The new reactors would have been built in the late 1980s and 1990s and would by now be in full stride, generating electricity which would have been cheap and – an added benefit unforeseen at the time – would have had very low carbon emissions. More of that in a moment.

Meanwhile, today, in another age and in quite different conditions, energy fortunes are changing all across the planet, not least the fortunes of numerous Commonwealth coun-tries in Africa and Asia as well as the fortunes of Britain itself. What is the biggest cause of this change? it is the extraordi-nary and largely unpredicted shale oil and gas revolution, and the associated improved technologies for recovering oil and gas economically which underlie it.

The losers will be countries that burden themselves with expensive energy, with low investment in new energy and elec-tricity supply facilities, and with a hesitant approach to new resource development.

Britain has half tumbled into the second category, strug-gling to modernise the nuclear sector, which ought to have been transformed 30 years ago, handicapping itself with expensive power, ensuring low investment in new energy facilities and offering only a hesitant welcome to resource development. All this adds a heavy burden to the British economy, weakens its capacity to participate in the global energy revolution and slows down both economic and social progress.

in the wider world energy scene, accepted wisdom has been overtaken. Middle east oil and gas dominance, oPeC (organization of the Petroleum exporting Countries) power, Russian gazprom gas monopoly, peak oil and gas – all the foundations of twentieth-century concern about energy secu-rity – are beginning to crumble.

This chapter may sound as if it belongs more in the hard real world of power and resources than in the digital age. But in fact it is microchip technology and information expansion



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that have opened out the new resource pattern, while the network world is more heavily dependent than ever on totally reliable and affordable electricity and energy supplies. indeed, it is cheap and plentiful power supplies that hold the key to the defeat of world poverty, as well as to the return of prosperity to the already industrialised world.

The global transformation in the pattern of energy resour-ces, driven by the shale oil and gas revolution, is changing the face and future of numerous countries, previously believed (and feeling themselves) to be well out in the cold and irre-trievably dependent on others for their daily energy supplies. African nations, many of them Commonwealth members, are especially well placed in this scene.

All this ought to be of major advantage to Britain in world markets. in sub-saharan Africa alone there are more than half a dozen Commonwealth member states pondering how to exploit large new fossil fuel resources commercially. British firms are extraordinarily adept at helping develop-ment in the kind of offshore conditions these countries face (examples are Kenya, Tanzania, Mozambique, south Africa and, on the Atlantic side, sierra leone, the nigerian giant and ghana). The smaller Commonwealth states, many of them with highly constrained economies, face horrendously high prices for imported diesel and long to find ways to move to both cheaper and cleaner energy sources. These are available and, again, British ingenuity and experience, built up on both north sea and worldwide experience, ought to be well quali-fied to help.

in addition, Britain itself at home is (or ought to be) superbly placed and highly attractive to new investors in energy-generating plant, transmission systems and on the demand side in energy-efficient machinery and consumer products.

it has vast resources of coal, still plentiful north sea gas and oil (declining but still substantial) and neighbours clamouring to sell it more piped gas – especially norway, but also Russia via its proposed branch line from nordstream to east Anglia – as well as a very large onshore shale gas potential. it has suppliers round the world eager to ship more frozen gas (lng – liquefied natural gas), with excellent and growing facilities to


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receive lng and transmit it into the high-quality uK gas grid. it has plenty of wind and tide potential, long and deep civil nuclear experience (despite the setbacks of the last century), top-quality skills and innovative power both in conventional oil and gas development, production and transmission, and in green and energy-efficient technologies.

This ought to be the ideal recipe for utterly reliable low-cost sustainable energy supplies for powering the British economy for ages to come, and for well-heated and comfortable homes for the British people indefinitely into the future at modest cost. energy policy should be pushing Britain forward, not holding it back.

Yet something is badly wrong. instead of energy aplenty and cheap reliable power supplies, we have the opposite: an energy imbroglio with uncertainty, eye-watering price increases and real fear of power failures stalking the scene. British energy prices are said to be some of the highest in europe and the world, and set to rise higher still.1 Britain’s energy policy ought to be the least controversial and smoothest-running part of government. instead, it is locked into out-of-date commit-ments and strategies, broadly labelled ‘The green Transition’, and largely dictated and corralled by equally dated eu energy policy requirements. The result is delusion on a grand scale, and chaos.

This is not just bar room grumbling at ever higher energy bills. it is an unavoidable conclusion i have reached after serving for two and a half years as international energy security minister, having previously served for the same length of time as secretary of state for energy in Margaret Thatcher’s time, having written books and countless articles on energy issues, and having followed every twist and turn of energy issues in many countries for 30 years.2

To repeat, we in the British isles are in energy chaos. none of our objectives will be reached. All are severely threatened.

investment in new power generation at the required level is not occurring; power shortages, interruptions and black-outs are in prospect; carbon reduction targets will not be reached; energy costs are internationally uncompetitive; energy prices are stupidly high and fuel poverty is at record levels;



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the attempt to reincarnate the nuclear power programme is once again faltering; the environment is being desecrated (a true irony when the main green objective is supposed to be to protect our environment); more coal is being burnt than ever (another irony and direct result of green policies); participa-tion in the shale gas and oil revolution is hesitant; worldwide British involvement in the effects of this revolution, and in its transforming impact on the whole global energy, ought to be much greater, with British north sea experience and with two of the biggest energy companies in the world on our shores.

Despite being highly favourably placed to enjoy secure and cheap energy supplies for years to come, our policy has set Britain in the opposite direction, towards insecurity, higher and higher costs, greater pollution and massive environmental damage – quite an achievement.

two energy revolutions

The background to this unpromising scene has been shaped by two energy revolutions. The first, familiar to almost every policy-maker on the planet, is the push towards low-carbon technologies and the attempt to move away from fossil fuels to new and renewable energy sources, thereby somehow checking feared global warming. The second, much less familiar to policy-makers and politicians, barely predicted and invali-dating strings of assumptions and dire forecasts about the world energy crisis, peaking and then dwindling global oil and gas production and so on, is the shale gas and shale oil revolution.

The second upheaval is having a far greater impact on all our lives than the first, although the two interact. The shale gas phenomenon opens the gate to almost unlimited supplies of hydrocarbons at relatively modest cost. it thereby greatly increases the subsidies, taxes and higher charges necessary to finance and install much more expensive renewables, such as wind power, solar power and nuclear power – the latter not counted as renewable by the true green hot gospellers, but in fact offering power with far less carbon and on a far greater scale than any other source – but all very expensively.


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The discovery of vast new shale gas deposits all round the world, even if so far only developed and extracted mainly in the usA, has made the scares obsolete. The doomsters have fallen silent about the world running out of gas and oil. it comes at the same time as iraq is bounding ahead in oil output and export, despite its unstable politics, when deep, so-called pre-salt oil has been found in prodigious quantities off the shores of Brazil, when in Canada major new oil discoveries are being registered, over and above the rapidly growing oil sands output, when Venezuela has discovered much more oil, and when possibilities for extracting gas and oil from the Arctic region at commercial rates are growing rapidly.

All this has also put a question mark over previous energy policy assumptions that oil and gas prices are bound to go on rising. scores more countries are set to become gas and oil producers and exporters, while America is ceasing to be an importer, with its own soaring production.

This entirely new energy situation has produced conflicting responses from national governments. There is a tug of war in policy-making between the network world and energy inde-pendence and security. The transformed global energy system, with its maze of pipelines, transmission systems and intercon-nectors, clearly offers dazzling network and market advantages in terms of commercial gain and supply diversity. Any national energy planner anywhere can see that.

But it also offers dangers. At the other end of the connec-tion, something might happen. At the other end of the contract pipeline or supply chain, there can be overthrown governments, terrorist attacks, piracy, disaster, man-made or otherwise. The instinct to keep it all at home, to keep as many energy supply sources on safe sovereign soil, becomes ever stronger.

such a view has entirely taken over American energy policy. energy independence has become the national mantra, the implausible dream, articulated by successive presidents from Jimmy Carter onwards, but now, through no hand of government, seemingly about to be a reality. salvation comes through fracking,3 by access to gas and oil deposits at commercially feasible costs, and on an unprecedented and undreamt of scale.



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expanded oil and gas production on the phenomenal American scale may not be available in the rest of the world, but the instincts to search for independence, and the sense of safety and security it brings, are there in many countries. China longs for reduced reliance on foreigners, even while vacuuming up hydrocarbon concessions around the world. european states long to be out from under gazprom (in effect, Russian government) dependence. france long ago made the mighty decision to build its way out of Arab oil dependence with 58 new nuclear reactor plants.

Almost all other existing or potential major energy producers are thinking in terms of self-sufficiency as the first priority, with exports coming a hopeful second.

Actually the sense of security from self-sufficiency can be false. Britain found this out through bitter experience in the 1960s and 1970s when it relied overwhelmingly for electricity generation on domestic coal supplies. The miners struck and Britain was paralysed. ‘never again’ was the lesson.

But now the thinking may need to change once more. With north sea oil and gas production lower than in its 1990s heydays (although not falling half as fast as many experts predicted), and with imports rising, the dangers of too much import dependence begin to be appreciated again. imported frozen gas (lng) now meets 38 per cent of daily uK require-ments – the bulk of it for gas turbines to produce electricity (roughly 40–45 per cent most days); 80 per cent of that is coming from Qatar via a continuous sea chain of lng (lique-fied natural gas – gas frozen at −162°C and kept there; at which temperature it turns from being a gas into a liquid substance) tankers to the uK, which could be a case of too many eggs in one basket. it gives renewed significance to the advantages of domestic shale gas recovery onshore in the uK, as well as to further north sea incentives.

how can Britain sort out its energy future as it struggles to find a way through all these dilemmas? A confident nation, on the forward foot internationally, needs sound energy and power. Despite the present muddle, there is a pathway out to a much safer, cheaper and altogether more reliable future.


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Out of the imbroglio

The gateway to a better route is acceptance of a new and different approach to the green economy goal. The real green transition will come not through higher energy prices but through lower ones. once cleaner power sources become cheaper than coal, oil or gas, the market will work and the consumer switch away from higher-cost fuels to low-carbon energy sources will begin on a massive scale, but not before.

The driver for lower costs is of course technical innovation. it is new, cleverer and cheaper ways of harnessing wind power, solar power, wave power and nuclear power, and bringing down the costs of providing power from these sources which will motivate change. Public resources should therefore be heavily focused on promoting research, innovation and cost-saving technical advances in all the renewable areas, rather than on subsidising already installed high-cost renewables, such as wind farms. The key is new technology. Public support ought to focus on research and development on every part of the power supply chain from power generation to power transmission, to power distribution and to efficiency in power consumption.4 Make all these things cheaper, and they will be adopted. Make and deliver more electricity out of a tonne of coal, a barrel of oil, a therm of gas, make better transmission lines which lose less power along the way, and the investment will be forthcoming. Make energy-saving equipment or items in the workplace or home cheaper and more efficient, and they will be installed and used.

exactly the opposite approach now prevails in British energy policy. it is to make energy supplies more expensive, based on the theory that high energy costs will lead to more energy-saving expenditure and one day lower bills. it is to support and subsidise not research and innovation, but actual operation of lower efficiency and very costly renewable energy installations, especially wind farms. subsidising high-cost wind farm operations is of course a direct disincentive to look for cheaper methods and better technologies. if the returns are flowing in, what is the point of shifting to new machinery?



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if wind farms can be built and operated in ways that pull in large subsidies, whether paid for by the taxpayer or the already burdened consumer, where is the case for tiresome efforts to find new technologies and install new systems?

But if high subsidies to inherently non-commercial renew-able energy systems discourage innovation, they also have two other killer features. The first is that subsidising renew-able energy undermines investment in new fossil fuel power plants, however efficient, however effective in reducing carbon emissions, however necessary in replacing old and dirtier generating equipment and power stations. Why should inves-tors risk their funds for projects that are not only going to be up against unfair and subsidised competition, but may actu-ally carry extra handicaps in the form of carbon taxes, further costly design requirements and other burdens?

They will not do it. The new investment in gas turbines will not take place. At the time of writing, only one gas-fired plant is under construction out of at least 30 promised and needed to replace old coal-burning stations. The old plant will have to be repaired and its life stretched. Coal-fired plants will be kept burning away, and new ones may even be built, espe-cially if coal supplies are plentiful and cheap, and especially if even cheaper coal is on offer from the united states, where the switch to cheap gas on a vast scale has left coal suppliers eager to find new markets.

Thus, perversity of perversity, heavily subsidised renew-ables deter new gas-fired turbines, however much carbon they save, leaving more coal-burning to fill the gap.

But if that is not bad enough – and of course dangerous enough, since it imperils future energy security, as well as climate security – an even bigger negative factor is at work. high ‘green’ subsidies (in fact, barely green at all) have to be paid for. Consumers and taxpayers have to foot the bill. in an era when taxes are already high, when living standards are being squeezed and when energy costs are already far above histor-ical levels anyway, policies to raise them further are guaranteed to produce very strong reaction and resistance. hardest hit are the poorest families in their millions.5 ever bigger sums have to be carved out of weekly household budgets to pay the subsidies


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that wind-farm operators enjoy. The transfer is from the poor to the rich on a substantial scale. it is an un-saleable political message, running counter to the best ideals in all the polit-ical parties. The green cause, at first so broadly supported and popular, has become discredited and unpopular. incompetent handling and messaging is betraying the good green case.

Thus the resources that should be going into inventing new technologies for processing, transporting and consuming power in the electric age are being dissipated in the most wasteful and counterproductive ways. A Britain that ought to be basking in plentiful, secure and affordable energy supplies, and pushing forward inventively towards a greener power-supply pattern and a modernised energy infrastructure, has saddled itself instead with a risky, hyper-expensive and largely outdated energy system.

The green Transition was originally a scenario drawn up in 2009 by the uK’s gas and electricity regulator ofgem. A price was put on it of £240 billion. one extreme estimate is that the effect on average household energy bills will be to raise them from 2012’s £1,243 to 2020’s £4,733 – in real terms.6 in practice, the green Transition will prove impossible to deliver. Consumers are not going to pay these sums and will vote against the government that tries to impose them. The investing companies, the Big six and the national grid, will not be able to afford the investment involved. The problems of balancing electricity supply with the enormous wind-power element involved (some 30 per cent supply capacity) will be unmanageable. A massive countryside reaction against the cat’s cradle of new grid pylons, wind pylons, switching stations and supporting road infrastructure, led by environmentalists from both left and right politically, will make progress impos-sible. Above all, the widening availability of gas, driven by the shale phenomenon, will make the very high cost of renewable supplies and technology un-financeable.

This gaping self-inflicted wound weakens the British economy, weakens its competitiveness and weakens its capacity to participate in the energy revolution round the world in which numerous countries are beginning to be involved – many of them members of the Commonwealth. A more negative and



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myopic set of policies could scarcely be devised by Britain’s worst enemies. They should now be reversed in favour of cheaper power, lower energy bills and the maximum support for new energy technologies at every level.

the wider energy scene

The wider european energy scene provides the context for all that is happening, and going wrong, on the domestic British energy front. The British imbroglio is part and parcel of an even greater confusion at the european level. it should not be so, but it is.

huge divergences have been opening up between european official aims for energy and climate security, and American and wider world experience, and huge differences also between policy aspirations and intentions, and what is actu-ally happening.

official eu energy and climate policy aims are:

• a 20 per cent reduction in eu greenhouse gas emissions from 1990 levels;

• raising the share of eu energy consumption produced from renewable resources to 20 per cent;

• a 20 per cent improvement in the eu’s energy efficiency.

These 20-20-20 targets were set by eu leaders in March 2007, when they committed europe to become a highly energy-efficient, low-carbon economy, and were enacted through the climate and energy package in 2009. The eu is also offering to increase its emissions reduction to 30 per cent by 2020 if other major economies in the developed and developing worlds commit to undertake their fair share of a global emissions reduction effort.

The 20-20-20 targets represent what is claimed to be an integrated approach to climate and energy policy that aims to combat climate change, increase the eu’s energy security and strengthen its competitiveness. They are also headline targets of the europe 2020 strategy for smart, sustainable and inclu-sive growth. This is meant to reflect the recognition, or hope,


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that tackling the climate and energy challenge will contribute to the creation of jobs, the generation of ‘green’ growth and a strengthening of europe’s competitiveness.

The measures and legislation enacted to ‘deliver’ these targets are listed in Annex C. They will achieve none of their objectives. They are based on delusion. greenhouse gases will not be curbed globally; in net terms jobs are being lost on a major scale, not increased; renewable energy targets will not be met. indeed, the ‘dirtiest’ of all fossil fuels, coal, is gaining a dominant role in european power generation.

on paper the low-carbon objective may be met, but this is a statistical twist. Continued recession, with zero eu growth, temporarily holds down the official figure, but carbon comes pouring in with imports. suppliers to european markets switch their sources to China and other exporters where manufac-turing carries on without too much concern for emissions restraint and without penalties. This is the phenomenon of so-called carbon leakage and it means, of course, that the total official figure of carbon emitted to meet european consumer needs is a bit of a cheat.

Meanwhile, the large subsidies required to make renew-able energy systems viable have to be borne by both homes and industries, making european manufacturing increas-ingly uncompetitive. little notice gets taken of the warnings from one industrial leader after another that while the usA is ‘running away’ with the shale revolution, european manufac-turers are facing ‘crippling energy costs’, with the trade gap between the usA and europe rising to its highest level for 20 years. The gap is forecast to widen further in the years ahead.7

The eu carbon trading scheme adds to the burdens without making any discernible contribution to reduced emissions. The so-called emissions Trading Mechanism is in practice a flop. so many permits have been issued to industry by nervous author-ities that the price of emitting carbon has fallen to less than £4 a tonne, a tiny deterrent to carbon-intensive operations. The eTM is another good example of the clash between economic theory and practical reality.

on paper the idea of issuing permits to emit Co2, and then allowing those who do not use them up to sell them to



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those who emit excessively and need the necessary permits to operate, ought to work smoothly. unfortunately it overlooks politics and the human factor. industries and big emitters have lobbies. lobbies bring pressure to bear on policy-makers and ministers. Ministers want to keep above the fray and retain elector confidence. To do that they issue more permits to the industries under pressure. The price of permits falls and the disincentives to carbon emissions evaporate. Theory is trumped by human behaviour.

All this is turning out to be a stupendous error, and a costly and hurtful error at that. had Barbara Tuchman lived on into the present age, this could well have been one of the milestones in her onward march of establishment folly. At root, europe’s well-intentioned policy-makers have been fed with bad guid-ance, leading them to believe that greenhouse gases can be controlled, and global warming curbed, relatively cheaply and straightforwardly. it turns out that the costs of transforming energy systems to more sustainable patterns are proving far higher than predicted by experts and the gains far more ambig-uous and indefinite.

A major culprit here has been the widely acclaimed but deeply misleading stern Review, published in october 2006.8 This argued that serious measures to avert global warming could be put in place relatively inexpensively if early action was taken. But the costs that consumers have been asked to bear have proved much higher, and the persuasive powers of the message much weaker than the optimists or the supposedly expert analysts hoped for.

As i argued in a book co-authored with Dr Carole nakhle in 2007,9 the appeal to consumers to pay painful extra costs to save the planet at some distant future date would not be sufficient. The message was wrong. A far more compelling theme would have been that it was future energy security that necessitated a shift to low-carbon power and that green tech-nologies could produce cheaper instead of painfully more expensive energy supplies, as well as safer and more reliable power sources. The Al gore appeal – that saving the planet required sacrifice now, and that the science of imminent doom was settled beyond dispute – was never going to carry enough


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people with it. Vague, weak and implausible messages were always going to produce bad results, and this has proved to be the case. intense hostility has now built up against the green cause.

A government in Britain that wanted to be ‘the greenest government ever’ has found itself on the defensive and on the retreat over its energy pricing policies. Two further problems are undermining the green case.

first, it is evident to the most casual observer that europe’s ‘example’ to the world’s biggest carbon emitters – notably China, America and Russia – is having no effect whatever. Despite strong concern within the Chinese hierarchy about pollution, especially sulphur pollution from coal burning, Co2 emissions continue to soar, adding more each year than Britain’s total annual emissions. second, and ironically, America is achieving big reductions in carbon emissions, but not through taxes and high-cost energy, not through following the european example and not through any kind of commit-ment to the protocols originally agreed at Kyoto in 2003.

instead, the drivers have been technology, innovation and cheap power. China’s green achievements, such as they are, and its commitment to renewable energy sources, mainly wind power, are being also driven almost entirely by the wish for greater energy security and the desire to be independent of outside supplies. if any example is being followed in Beijing, it is more the American than the european one. if europe’s example is having no influence, why, it is asked, do the extra burdens have to be born? What is the purpose? Where are the results? Why does so much diplomatic effort need to be expended seeking the holy grail of a global commitment to legally binding carbon emissions targets when no such goal is remotely attainable or needed?

As each international gathering takes place to monitor world progress in the battle against destructive climate change, these are the questions that get asked but receive no answers. The battle is being lost through political incompetence and poor messaging, and everyone knows it.

People will make sacrifices and accept extra burdens on their budgets and family lives if they are persuaded that the



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benefits are real. But in this respect the scientific commu-nity, and its supporting lobbies, has let the green cause down badly. This author is no climate denier. he believes that terrible climate violence could be coming, that among many causes of this outcome man-made greenhouse gases could be one, and that preparations and steps are possible to mitigate, adjust to and just possibly delay the threat.

But the spurious precision given to the prospects, and the dictatorial tone in which forecasts are handed down, have all added to the backlash. green extremism has all but destroyed the green case. underhand methods by organisations such as greenpeace, of which this author has personal experience, and intolerant zealotry in face of scientific hesitations, have all further compounded the doubts about sustainable energy measures and whether the costs are worthwhile.10

Britain should be campaigning vigorously to change the direction of the eu Commission’s ineffective and catastrophic policies. The focus of european energy policy needs to be on energy market liberalisation, and on a much expanded infra-structure of gas and electricity pipelines and connectors, to ensure reliability and avoid power breakdowns. This approach should be folded into the broader case for eu reforms which the British prime minister has been pressing and for which millions of european citizens now long.

The twin hearts of the problem are two eu directives, both now badly out of date. one, the eu large Combustion Plants directive, requires the rapid closure of many older power stations, regardless of the risks to supply security. The other is the eu Renewables directive compelling Britain to generate at least 15 per cent of its total energy from renewables (defined not to include nuclear power) – a requirement that effectively means the electricity-generating sector will have to find 30 per cent from renewable sources. hence the enormous drive to promote and subsidise wind farms.

it cannot be done. it is essential that the straightjacket on Britain is released and the eu directive renegotiated. for it is this, above all, and more than any other factor, which is propelling Britain away from sound and sustainable energy, and towards a hobbled, constricted and literally darker future.


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Those who entrusted their political leaders in europe with the task of supervising a great transformation to an age of cleaner, safer, greener and more affordable energy have been betrayed and are entitled to be angry. A clear-thinking Britain should be angry, too. energy-related issues bring down minis-ters and governments, and have done so in several countries, including Britain, in living memory. instead of ‘stumbling towards crisis’, in the words of Dieter helm, oxford Professor of energy, a confident British nation should be leading europe away from crisis and towards green policies that are viable, affordable and assist economic recovery. And based on firm ground at home, it should also build its muscle as a major supplying power of energy equipment, services and skills, using the Commonwealth network as one of its most valuable outlets. And it should start now.11

high-cost energy, mishandled energy transition and misguided eu policies are holding Britain back and preventing it from making full use of its immense network advantages. They tie a boulder to the foot of the runner in the global race. They damage the green cause, weaken industrial success and undermine competitiveness. in the sixth phase of Britain’s journey into the network age, they must be cut loose and left behind.



Part III

Power and Persuasion



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SoftPower reviSitedinfluence and Persuasion in the

digital and real worlds

Sometimes the more force is used, the less effective it is.1

from the British point of view, today’s Commonwealth network, with its tissues of connections and linkages, its common tongue, and its enormous and growing non-governmental and virtual dimensions, provides an almost perfect means through which Britain’s viewpoints, values, qualities, culture and attractions can be displayed and promoted – as indeed can those of every member state, large or very small. Connectivity switches the whole network on. that is what is now called softpower, and the time has come to think even more carefully and deeply than hitherto about what exactly we mean by this form of power-through-the-network in today’s conditions, and what can be achieved through its deployment and development. the conclu-sions of such thinking, and the innovative methods that can be developed in this field, are going to be decisive in Britain’s future fortunes.

Nations look after and promote their national interests in the international arena. that is natural and inevitable. Military capability and the threat of its use obviously play a basic role in a nation’s security and its power to persuade others to alter



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course. More dreadnoughts, more divisions, more air power, more sophisticated rocketry and high-tech hardware remain at the end of the hard end of the spectrum of protection and persuasion.

But the balance is changing and the grey area between types of power projection, where force and friendship mingle, where domination shades off into partnership, is widening all the time. Military forces find themselves increasingly involved in ‘softer’ tasks of civic engagement. Civilian authorities are being drawn more and more into the war of hearts and minds, and into almost every level, at every stage, of operations. what these strategies now have to take into account is that the nature of international relations and exchanges has altered, thanks not least to revolutionary technical advance. in the words of Joseph Nye, who has done more than most to open up our understanding of the new situation: ‘military resources may produce the outcome you want in a tank battle, but not on the internet’.2

what exactly do we mean by the projection of power and influence in this new context? we mean a state’s ability to achieve preferred outcomes and/or to resist unwelcome outcomes by other states, or by powerful non-state agencies, of which there are plenty. in today’s world it is crystal clear that seeking these goals through coercion and force just no longer works as our forbears assumed. Gaining our goals through the co-optive means of persuasion, reputational promotion, skilled diplomatic manoeuvring to take control of international agendas – these have become the methods of advance – and the task for strategists then becomes to forge and prioritise the best instruments for pursuing these methods.

to quote Nye again: ‘it has become a matter of “power with”, rather than “power over” the target states, the inter-national agents and groupings with whom the modern state wishes to do business or persuade to alter course’.3

More force, backed up by carrier fleets, missiles and high-tech weaponry, may not only have become less effective in the informational age. its display or deployment may actually have an inverse effect through repelling support and loyalty, and reinforcing attitudes of persistent opposition and grass-roots


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hostility. Something of this can be clearly seen today in the decline of American influence from its unipolar pre-eminence round the world – despite its overwhelming defence spend. A discontinuity between defence expenditure and defence effec-tiveness has opened up.

the new paradox is that the countries that devote rather less resource to military might, and more to the smart and subtle use of softer means of persuasion and influence – whether to achieve specific goals like trade access, access to natural resources, or more intangible aims like open markets, insistence on lawful behaviour, support for counter-terrorism – may now actually be more successful in their aims and win more support from the international community.

the key to a nation’s successful deployment of softpower techniques and methods is the use of networks – both old networks and the new ones that have sprung up in this era of global communications and global transparency.

Moreover, these networks are not just between governments and official agencies. they are being generated between corpo-rates, between professional organisations, NGos, lobbies and interest groups, cultural commonalities, social and educational web systems, or, to use an old-fashioned concept, between and on the foundations of straightforward friendships.

this explains why today, to the puzzlement of many foreign policy experts and analysts, vast trans-continental networks like the Commonwealth are assuming such revived importance and popularity, and why involvement in, or attachment to, such networks is so sought after by other nations.

Here is a criss-cross latticework, a gigantic cobweb, of link-ages not just between states at official level, but underpinned by a spreading substructure of informal connections, greatly reinforced of course by a common language and the absence of language barriers.

it is no surprise that the architects of Le francophonie, the french-speaking world, have sought to build up the same kind of network, although perhaps on a more centralised basis. when i visited, at his invitation, Youssef diaf, Secretary General of Le francophonie and former Senegal President, i looked around his splendid offices in the rue Martinique



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with envy, and also at his generous budget. But the tables were turned. diaf said that the envy was more justified on his side; at the Commonwealth Secretariat housed in London in its ‘beautiful palace’ – Marlborough House! there was much agreement that Le francophonie and the Commonwealth should work together, especially on tasks such as monitoring elections in Cameroon and other technical and development work. only when i mentioned Algeria’s interest in associating more closely with the Commonwealth was there a momentary silence round the table.

if a nation’s softpower is to be successfully built up and deployed to its advantage, if the persuasion of others to act differently, and the powers of attraction are to work between one nation and another, or between one society and another, this all has to be based on credibility.

Softpower’s messages are useless if they are seen as prop-aganda. in the age of the web, everything is transparent. Pr tricks and overblown claims can be seen right through and discounted or even ridiculed. example is more eloquent than a loud and overassertive voice, and co-operative action, rooted in mutual respect, becomes ten times more effective than glossy pamphlets, Pr campaigns or, worse still, pulpit lectures and patronising advice.

violence continues round the world, often involving unspeakable atrocities. Hardpower and hard pounding will always be needed, as demonstrated in Libya in 2011. insurgency (heavily e-enabled) and irregular warfare activi-ties will probably continue to spread, organised with advanced communications links by fanatical groups or major movements like Hezbollah from inside Lebanon. But more and more it is essential for softpower strategies to march alongside mili-tary action, or even in advance of it, yet always moving in smart and synchronised combination. otherwise goals seem-ingly secured by initial force can be lost, objectives undermined and ambitions and ideals evaporate. that is what the world learned in iraq.

All the experiences of modern times reinforce this lesson. victories are gained and declared, but peace is then lost. enemies appear vanquished but hearts and minds remain


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undefeated. it has slowly come to be recognised that power to do good, power to prosper, power to protect a state’s citizens and to survive in a turbulent and dangerous world – all these laudable and legitimate aims are now heavily dependent on the subtle deployment of softpower on the international stage. this is a task in which governments and societies, states and the civic order, officialdom and markets, all have to work in tandem and in harmony.

to repeat a slightly worn cliché of our times, we are all in this together.

The softpower opportunity

in the past the tendency has been to think of softpower as confined to a sort of exercise in cultural and image promotion. this too easily boils down to a focus on the British Council and the BBC world Service, both estimable bodies playing a valuable international role, but very far from being the main or most significant constituent parts of a modern softpower agenda. A substantial widening out is needed.

for a start, policy-makers should be looking more closely not only at the multiplying ranges and types of softpower available to us, but also at their interweave with traditional hardpower methods – in what has been dubbed a formula of smart power. there is also the need to be a lot clearer about the nature of the policy targets overseas we are trying to influ-ence and about the ways our softpower strategies can be developed and applied at all levels, not just within the govern-ment framework.

to develop a robust and successful strategy, diamond clarity is needed about the outcomes desired, as well as full apprecia-tion of the new landscape of power and influence distribution worldwide in which states now operate and the precise kinds of softpower objectives are being sought.

for example, is the aim to seek to change the actual pref-erences and behaviour of other countries and institutions towards us, or shape the agenda in which issues are discussed, or use persuasion to get one’s way in specific policy areas, or



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to use example and reputation to attach others to one’s causes and to share one’s goals?

And is there understanding of all the different sources of softpower on which a nation can draw? And how are they to be built up and transmitted, and through what channels? these are very basic questions to be answered, as far as is possible, if Britain is to succeed in its national objectives over the next few decades.

Softpower sources and channels

Britain’s basic softpower resources lie in its culture (projecting the country as a successful nation towards which others feel attracted and friendlily disposed, and which can be trusted), in its political values (so long as they are seen to be upheld at home), in the legitimacy and fairness of British foreign policy, and in the potential for British-based non-governmental and professional bodies to influence and bond with counterparties across the globe.

More specifically, British ‘attractiveness’ rests on offering a positive domestic constitutional model, operating under a popular monarchy (itself a softpower asset), on having a successful economy (and therefore real national credibility), on running an efficient and flexible military, on supplying generous but sensibly focused overseas assistance and human-itarian aid, on model national intelligence methods, on public diplomacy, on public governance and administration (central and local), on high-quality judicial advice, training, standards and personnel, and on best practice standards and courses in a whole range of professional fields and skills. Softpower impact also depends increasingly on artistic and design promotion and exchange.

this is a formidable arsenal, much of which has already log ago been lined up and put in place, although not always deployed or transmitted effectively – and a part of it is not under central government control anyway.

to wield our softpower resources effectively in today’s information-laden world we have to avoid the pitfalls of lecturing, of seeming to confront rather than work with target


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recipients, of failing to show deep enough respect for other people’s cultures and (even more) their histories, and of glossing over our own past errors. we have to face it in particular that Britain’s iraq venture with the USA drained our reputation (and therefore our softpower influence) severely and that this has now to be painstakingly rebuilt.

fortunately, Britain has one major ready-made system for softpower transmission to hand – through the Commonwealth network – as well as a huge reservoir of historical experience in the emerging world with which to help repair past damage.

in the informational age we must know how to use the elec-tronic media sensitively (i.e. avoiding boasting and propaganda tones), and how to avoid over-centralisation of our softpower messages and influences by working with and opening gate-ways for non-governmental softpower activities – although it has to be accepted that other media systems have vastly multi-plied in power and reach. Al-Jazeera is one example, but there are dozens more. At the time of writing there are well over 60 news channels broadcasting frequently in Arabic, english and Spanish. it is with these that we have to compete with the latest techniques, by moving far beyond traditional broad-casting systems.

Targets and objectives of softpower

who are we trying to influence and attract and to what ends? Britain’s world positioning still places it close to the USA and as a key player within the eU (itself facing big new softpower and image challenges) and in the european neighbourhood. But the changing global balance points us in new directions and towards new power centres and markets.

Purposes in this new and still fluid and fast-altering scene are broadly as follows:

a) Commercial – sustaining the British economy, trade, living standards and investments through access to new markets (Asia – Pacific, Central and South east; Central and South America, Gulf region, Africa); ensuring that Britain is seen as the high-quality supplier of choice for goods, systems,



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services, styles and the most desirable inward investment destination; upholding open trade and capital flows and resisting all forms of protectionism.

b) Security factors – minimising and containing the effects of political destabilisation round the world, especially at this time of global power transition, countering condi-tions which breed terrorism and knock-on impacts on our national security, countering piracy and threats to sea and air routes, monitoring choke points in the global trade flow pattern, underpinning democratic governments and forces where threatened (with both civilian and military advice and training), and influencing the agenda in our favour in inter-national defence and security institutions and groupings.

c) Humanitarian work and contributions – maximising both the real and reputational impact of our development assis-tance and emergency programmes and contributions, and the down-the-road benefits to our commercial and security interests (as above).

d) Political goals in foreign policy – softpower deployments can and should feed back internally in bolstering a sense of national pride and purpose, and help to cement internal social cohesion and the binding in of ethnic minority loyal-ties. Active Commonwealth membership could be especially positive on this front.

Smart power strategy in a time of transition

Given British resources, skills, history, experience and purposes as above, how does Britain develop a smart power strategy that best fits in with our overall foreign policy objectives and chal-lenges (including unforeseen events such as Libya and Arab regional turmoil)?

the priority for national leaders must surely now be to spell out a narrative that is sufficiently clear and appealing to ensure public consensus, and, ideally, active public reinforce-ment at all levels, governmental, non-governmental, private and commercial.

the overall story theme must be robust enough and relevant enough to changing world conditions to provide a constant


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sense of direction even where events and ‘surprises’ appear to distort it. thus the 2011 Libyan hardpower/softpower mix needs to be seen as flexible response, consistent with, and not a departure from, the broad strategic direction.

it is noteworthy how certain smaller states – Singapore, Norway, Qatar – have succeeded so well in combining all the dimensions of power projection in smart strategies in current world conditions. in Britain’s case, with power now distrib-uted and diffused in so many different places, we have to be agile and wily enough to design and handle smart power in a variety of forms, usually in co-operation with different part-ners in different situations – thus with eU partners in some countries and regions, with fellow Commonwealth members in others, with Asian allies in others again (Japan) and with the Americans elsewhere yet again.

the first step is to be clear about objectives in today’s condi-tions (as identified above).

the second step is to have an accurate assessment of what now constitutes softpower resources, inside and outside central government, including both the civic and the private sectors.

the third step is to understand and tailor the approach to agreed national priority ‘targets’ (which is why care is needed in bundling states into hard-and-fast tiers and categories).

the fourth step is to knit together hardpower and soft-power techniques closely, recognising the heavy overlap nowadays between them (viz. deploying the military on social and humanitarian work, while backing up military pressures with ‘softer’ civilian and social programmes).

the fifth step is to be hard-headed and realistic about pros-pects of success, and order priorities accordingly. the limits of the UK’s softpower impact and reach have to be fully recog-nised, with the clear realisation that we cannot intervene in every crisis, and with the public understanding of these limits.

the deployment of softpower is more a theme than a policy. it is not just a matter to be handled by government depart-ments or co-ordinated by officialdom. in the face of major new challenges, from jihadism and islamic civil war to pandemics and climate change, and from rising protectionism to nuclear proliferation, the imperative need is to fill out a new strategic



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synthesis that combines all the dimensions of hardpower and softpower available to us, woven together in what Nye has christened smart power. British prime minister david Cameron has already labelled this the new liberal realism, and the task now is surely to tailor our own UK capacities, resources and experience to fit the new philosophy and the new direction.

in going about this work, we have a lucky legacy. ignored, forgotten in the dusty national attic but now in an amazing phase of resuscitation, we have to hand the vast Commonwealth network, stretching across all the continents and most of the faiths.


12

tHe fACe of tHe fUtUreHow and why Britain Should rejoin

(Yes, rejoin) the Commonwealth

‘the Commonwealth is in many ways the face of the future.’these were the words of Queen elizabeth, Head of the

Commonwealth, in her Christmas message of 2009. Scarcely attracting the attention of commentators at the time, they are now beginning to be appreciated, a few years on, as what they truly were – namely, a prescient glimpse of the future in a totally transformed international landscape, a beam of light suddenly illuminating a global future which even now may not be fully understood or accepted.

for what today’s Commonwealth is developing into is some-thing quite different from the past. it is becoming the necessary network of the twenty-first century – a set of relationships between nations large and small, and between their peoples, which is not provided by any other multilateral institution, but which is increasingly needed and, as the membership waiting room confirms, sought after.1 As virtual linkages spread, almost to the point of creating virtual nations, and as hard physical relationships become more complicated, the outstanding char-acteristic of the Commonwealth is that it spans both worlds – the actual and the virtual, the public and the private, the offi-cial or governmental, and the non-governmental linked and



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e-enabled world of markets, professions and peoples. As with quantum particles, it is possible within the Commonwealth to be in two places and two states at the same time.

very few planned or foresaw this. on the contrary, a wide-spread view in the later decades of the twentieth century was that the Commonwealth had lost its relevance. it was a club of the past, a family of yesterday, held together by little more than nostalgia.

Yet contrary to expectations, what is emerging instead from the old pattern is something that fits amazingly closely with the future and with the technological revolution in which the world is now caught up.

first, the Commonwealth today, far from being a backward-looking coterie of states, is proving (to the surprise of some) to be a living network of relationships and like-minded values and principles that stretches across all continents – Asia, Africa, europe, the Americas – and across almost all religions, at a time when global reach is essential to tackle global problems. the great themes of democracy, human rights, good govern-ance and the rule of law, the aspirations of all humankind, have found in the modern Commonwealth a fresh and resilient means of propagation in the network age.

Second, the Commonwealth, again to the surprise of some, is one of the fastest-developing associations of nations in the world – in some parts faster even than China – and contains at least seven of the most dynamic, knowledge-driven economies in the world.2 As the west’s trade and investment tilts away from europe and the Atlantic, and towards rising Asia and Africa, the Commonwealth network becomes more and more relevant for all its citizens in hard commercial terms, meaning jobs and investment in an age short of both.

third, the Commonwealth survives and attracts new members when the world’s other multilateral organisations, designed for the twentieth century, are failing us and in deep trouble. it provides scope for a real North–South dialogue on equal rather than patronising terms.

fourth, in an age of small states, many of them feeling bypassed by global trends and tossed in the storms of world economic volatility, the Commonwealth platform offers a


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the face of the future

life-raft of opportunity and influence, where smaller voices get a bigger hearing, and the problems of smaller states receive genuine attention and consideration, notably in meeting the severe challenges of climate change, energy scarcity, food and water needs, and other escape routes from poverty. it gives Britain yet another chance to recover its once strong reputation for helping the smaller and weaker states of the planet, to be a source of supportive partnership and not pressure, free of any suggestion of dominance, exploitation or control.

At least potentially, the Commonwealth is thus emerging as the kind of forum in which richer and faster-growing countries and the poorer and smaller nations can speak on equal terms, in which people from different faiths can sit down and discuss their problems calmly (there are 500 million Muslims in the Commonwealth), and in which almost all members are seri-ously committed – or under steady pressure to be committed – to good governance and to contributing to global peace and stability, rather than pursuing vendettas against America and ‘the west’.

fifth, the Commonwealth, unlike most other multina-tional organisations and combinations of states in today’s world, is an assembly of peoples, not just of governments. its most visible aspect may be heads of government gathering together, but beneath the official layer lies a vast substructure of alliances and groups, interests and professional bodies, civil societies and voluntary associations, all proudly carrying the Commonwealth badge.

The family

Marlborough House in the Mall is the visible centre of the Commonwealth. it makes a good setting, with its superb murals commissioned by Sarah Churchill, first duchess of Marlborough, and its echoes of a glittering past as the home of ‘Bertie’, Prince of wales (later edward vii). from here ‘the Marlborough House set’ radiated out and enlivened victorian London society (some would say a little too much). Here, down the years, Secretary Generals such as Arnold Smith,



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Sonny ramphal, Chief enayaku, don McKinnon and currently Kamelesh Sharma, a former indian diplomat and statesman of the highest calibre, have been able to look out across the world on the Commonwealth family.

But appearances are deceptive. what you see is not what you any longer get. the Secretariat is not a head office because the modern Commonwealth is not managed, or led, from the top down. the strength comes from below, from the dizzying range of Commonwealth-oriented organisations and initiatives across the world which the internet has now connected and enlivened. the Commonwealth Parliamentary Association brings parlia-mentarians and legislators together from every corner of the Commonwealth. Alongside this global parliamentary convo-cation are the Commonwealth-wide organisations promoting parliamentary administration and techniques of accountability, as well as sharing lessons learnt, at westminster and elsewhere, about the operation of committees of Parliament, not least the Public Accounts Committee.

Around this parliamentary network, other main ‘pillar’ organisations proliferate, such as the Commonwealth founda-tion, the umbrella body for civil societies, the Commonwealth Business Council, thriving and expanding as never before as intra-Commonwealth trade and investment grows. or there are the legal bodies underpinning the vital common law pattern of the Commonwealth, such as the Commonwealth Lawyers Association, or the Commonwealth Magistrates and Judges Association, all in turn spreading common standards of judi-cial administration.

the other professions – the doctors, accountants, survey-ors, planners, nurses, educationalists, journalists, broadcasters, social workers – all have their Commonwealth networks. there is also Commonwealth Connects, a strategic digital initiative, showcasing the Commonwealth and its values, increasing pub-lic visibility and personalising the Commonwealth connection for millions of individuals. its website connects audiences and enables professional and expert collaboration on a titanic, trans-world scale.

then there is the Commonwealth Local Government Asso-ciation (active at a highly practical level in many countries),


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the Commonwealth of Learning spreading teaching through open and distance learning (odL) on a world scale, the Asso-ciation of Commonwealth Universities (530 of them!), and of course the whole world of sport and the Commonwealth Games administration. the list goes on and on, and grows with all the new professional skills, interests, specialisms and technologies the age produces.

the Commonwealth of Learning, based in vancouver, is a particularly fascinating example of networking at the most practical level. Supported by 50 Commonwealth governments, it is literally the world’s only intergovernmental organisa-tion solely concerned with the promotion and development of distance education and open learning.

All this is usually called ‘the Commonwealth family’. what exactly is this vast family? in Annex d there are 82 bodies listed as accredited organisations with the Commonwealth ‘family’. Many more lie outside the official accreditation list. ranging across almost every conceivable branch of human co-operation, they are the programme material and data for the ultimate global network. Alan turing, said to be inventor of the computer, would have built a ‘thinking machine’ to handle them in no time. But his work would not have been necessary. the Commonwealth network machine is busy building itself.

for nations like the United Kingdom, which seemed in past decades to lose interest in its Commonwealth connections, the entire network assumes a new and crucial significance, as the gateway to new markets and new sources of finance – the reversal of the nineteenth- and twentieth-century pattern. Not only have Commonwealth countries become new and demanding consumer marketplaces, ready for the highest-quality goods the UK can turn out. Australia and the Pacific Commonwealth nations lead the way to Chinese markets, via the once-British and still welcoming Hong Kong. oil-rich trinidad and tobago leads the way into Latin America, again mostly with welcoming and Britain-friendly consumer classes.

A flood of figures is beginning to provide more eloquence than words could about the Commonwealth impact on world and British affairs. in the fraser institute’s index of freedom, six Commonwealth nations are in the top ten. in the world Bank’s



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‘ease of doing Business’ rankings, seven Commonwealth countries are in the top 25. in the international Corruption Perception index, six Commonwealth nations are in the top 25 for being least corrupt.

Commonwealth nations are among the fastest growing, and the momentum is spreading out from the traditionally rich states to the historically poorer ones, particularly in Africa. trade between the UK and the rest of the Commonwealth (goods and services) has expanded over the last decade by some 150 per cent. intra-Commonwealth trade and invest-ment flows are also growing fast, although it is hard to extract precise figures. At the Heads of Government meeting in Perth, Australia, in october 2011, a cascade of new investment projects was announced, together with tie-ups between mining interests – for example, between Australia and Nigeria – and a new business forum between the Commonwealth and China.

what has changed after recent decades to bring this amazing vitality to the surface?

if there is a single basic explanation for what has occurred to galvanise the modern Commonwealth, it probably lies in the microchip, meaning the information revolution and the globalisation process to which it is linked. Quite simply the Commonwealth network of countries, societies, interests and peoples has been brought to a new and intensely interactive life by the phenomenon of instant global communication and connection. Language connects; electronically and digitally linked language connects totally.

this has occurred and is occurring at all levels, from the individual to the governmental, from the remotest school to schools everywhere, from student to student, farmer to farmer, doctor to doctor, from the humblest group or organisation to the largest state. the lacework of live associations and linkages described above (and in Annex d), stretching across the whole 54-nation Commonwealth network on a staggering scale, has become wired up as never before, enabling almost continuous dialogue and creative exchange – a kind of unending concerto of co-operation and common identification and purpose.

it is true that much of this extraordinary network was there before the turn of the century. A mid-1990s report from the


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House of Commons foreign Affairs Committee3 pointed out how the changing Commonwealth was supported by a battalion of non-governmental organisations, covering a vast range of interests and activities.4 But in the new age of transparency and accountability worldwide, in which the web and the mobile phone camera open almost every window of activity and social trend, this meshwork of contacts has been given a kind of blood transfusion. in effect, the Commonwealth ‘badge’ has become a sought-after asset – an entrée to the community of trust, reli-ability and transparency for which the world’s investors and traders constantly search. this is certainly one explanation of the fact that, as we have seen in Chapter 4, countries with only a remote link with the old British sphere, or none at all, have either already joined the Commonwealth, or aspire to do so, or at least seek to link up with its various supporting groups.

of course, the global communications miracle is not the only transforming force in the Commonwealth network. it interacts closely with the other key binding language factor, and embedded within it the dNA of common attitudes, assump-tions, instincts, manners, ideas of what constitutes humour and ways of looking at the world which a language contains and purveys. Because the language is english, the origins of many of these things go back to British traditions and values, but by no means all. the Britishness factor has long since become enriched by and interwoven with many other cultures, such as Asian, African and Caribbean, in some cases much older and more powerful than the traces of the British legacy.

Quarrels and black sheep

there must be realism about the Commonwealth as it is devel-oping today – at least at the official and governmental level. within any family there are differences, even quarrels at times. that is inevitable. So it is in the Commonwealth family, where not all see eye to eye over either governance issues or world issues. Some are well off, some are not at all well off, and the gap may be widening. with new patterns and doctrines of international behaviour being aired and proclaimed all the



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time – such as humanitarian intervention, the responsibility to protect, the right to intervene – a constant debate is hardly surprising. Sixteen realms, under the Queen, and 37 (at the time of writing) republics and independent states are hardly likely to agree on everything. But the point is that if there are disputes they are not with ‘foreigners’, not lost in translation, but between members of the family, all viewing each other as closer than, and subtly different in feel and attitude from, foreign states. Heads of government may clash – the aspect most of interest to the media, of course. But below the surface lies a real Commonwealth network, outside the range of governments and their media camp followers, which continues to knit together across the world as never before.

A second reality is that as the Commonwealth network evolves, not all agree as to how standards should be enforced. that there should be high standards in terms of fundamental values and principles of behaviour and governance, to which all members should aspire to adhere, is not in question. that is the distinctive nature of the club, that it requires certain stand-ards to be matched. Not anyone can march through the entry door.

But how those standards should be upheld, policed and even enforced is much more controversial. responding to the times, the Commonwealth leaders have sought, and continue to seek, new methods for ensuring principles are upheld in member states. this is work in progress, work to ‘advance the Commonwealth’s values’, as the most recent report and rec-ommendations on strengthening the Commonwealth ‘brand’ put it.5 it is work that is yielding growing results.

A new Charter of Commonwealth values has now been agreed and validated. Cynics may say that this is not for the first time. there have, after all, been a string of declarations and manifestoes down the years, from the Harare declaration of 1992 (irony of ironies, when one thinks what the Mugabe regime did for human rights there) to the Milbank declaration of 1994, to the Auckland Charter of 1996.

what is the difference this time? the difference is connec-tivity and information. this is a Charter – a Maxima Carta – that sets standards for an age of almost if not completely total


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transparency. to say there is no hiding place now for brutal and illiberal rulers and their ways is going too far. Many things can still be hidden, and not just in totalitarian regimes. But the hiding places are now much more limited, and for nations that wish to wear the Commonwealth badge on their lapel far more limited still.

there are miscreants and there are black sheep. Many fami-lies have them. Some Commonwealth countries have wanted far more in the way of policing within the club to ensure good behaviour and examine deviations. other countries have seen this as unwarranted intrusiveness, either because they fear that examination would show too many deficiencies or because they reckon that internal controls, exercised by accountable internal authorities, are best, or because they see an outside inspecting body to be another unnecessary layer, or for a jumble of all these reasons. whatever the motive, the proposal for an inde-pendent Commonwealth-wide Commissioner for Human rights has been rejected as going too far.

So what emerges from this compound and fusion of changes, motives and aspirations and enormous new opportu-nities as the technological revolution races ever faster ahead? why is that royal insight so pertinent? what is the real impact on the lives and hopes of the Commonwealth’s 2 billion citi-zens, now and tomorrow? where should British policy now be reinforcing these enormous trends?

to understand clearly what is occurring, and how the evolving Commonwealth fits in, it helps to think in terms of a new kind of global equation. this can be presented as values = trust = Business and development.

in essence, the message in this era of super-connectivity and transparency is that those countries and societies that adhere most openly to Commonwealth values, or are clearly looking and moving in the right and same direction, are those that will be most attractive to investors and developers. the places where justice is likely to prevail, where commercial laws are familiar, where there is a serious aspiration to check corrup-tion, if not stamp it out completely, are the places to set up new enterprises, invest new money and grow jobs and prosperity. Jobs and justice ride together.



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there are obvious backsliders – sometimes nations have simply failed to update legislation inherited from their colo-nial pasts many decades ago. Attitudes to gay rights and to capital punishment, long since altered in Britain, are examples of this time lag. But the Commonwealth genius is that it acts as the constant pressure source and channel for change. to be pressed collectively from within the system is surely more likely to find a response than being lectured from afar by other nations claiming a moral superiority that they may not actu-ally possess.

At the same time the twenty-first-century world is seeing a remarkable reversal of roles. the capital that used to roll from west to east in the last two centuries, from the great industrialised nations to the developing ones, to build their infrastructures, is now flowing the other way. it is the high-saving, fast-exporting nations of Asia in particular that have the wealth accumulations the west needs to meet its own requirements, square its budgets and update its often dilapi-dated facilities.

on top of that there is the question of natural resources and the wealth, if carefully managed, that the Commonwealth can bring to previously struggling economies. As we saw in Chapter 10, revolutionary changes in raw materials potential and access have altered the picture heavily in the Commonwealth’s favour. the old resources were oil, coal and iron ore. the new resources are shale gas – accessible now in vast and poten-tially commercially recoverable quantities in Asian and African countries that previously had to import all energy – plus new ways of harnessing the sun, wind and tide, plus precious metals and rare earths hitherto undeveloped or even discovered. Commonwealth countries that were resource poor are begin-ning to see themselves as resource rich.

there is the matter of new or would-be members of the Commonwealth family. the rigid requirement that member-ship demanded some previous association with the British empire has long since been relaxed. Mozambique, rwanda and Cameroon are now enthusiastic Commonwealth members. As Chapter 1 revealed, others are knocking at the door or seeking to associate themselves with some of the pillar organisations


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at non-state level. South Sudan, as already mentioned, has applied to be a member. Burma (Myanmar) and Yemen (once Aden) are still in the throes of political upheaval but could yet turn their attentions to the Commonwealth. the Gulf states, again with historic links, have also shown an interest in being kept in close touch with Commonwealth activity. Kuwait has voiced strong interest and believes it qualifies with the stand-ards and conditions that membership requires.

The irish dimension

there are other states where serious voices can be heard talking about membership but nothing is said by ministers or at government level. the most interesting country in this category is the republic of ireland. the historical baggage here is almost crushing. ireland declined to join the 1949 Commonwealth, which first admitted republics, although history has it that eamonn de valera, who could hardly be described as pro-British, oddly wanted to stay in. in any case there would have been an instinctive dislike of any British-tainted institutions, and the 1949 Commonwealth must have looked to many very much like the old British Commonwealth in new packaging.

today the picture is different. first, as has already been explained earlier, the Commonwealth of today and tomorrow is no longer such an Anglo-centric entity, whatever its origins and history. Second, ireland has been wounded by its euro associ-ation. Commonwealth membership would not be some sort of ricochet impulse, but it might be a steadying reinforcement for a nation temporarily knocked off balance by financial misfor-tune – a situation in which Britain was ready with prompt and substantial help. third, the Queen’s visit of May 2011 proved outstandingly successful in healing old wounds and promoting reconciliation. fourth, there is a question of mindset. Bringing ireland and the UK, as fellow members of the Commonwealth, alongside each other in that orbit ought to be an opportunity not just for reinforcing the institutional links. the Council of the isles has long existed, although hardly in a state of public prominence. the new thought, yet to mature fully in



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either dublin or London, is that Britain and ireland need each other as never before. the combined voice of the whole British isles would carry new weight both in a european and a wider international context. the Northern ireland issue would at last fade away into inconsequence. the mutual economic benefits would multiply. New areas of co-operation in every-thing from cultural creativity to offshore energy possibilities would open out. inter-island transportation might lend itself to revolutionary technical possibilities. these are the areas to which the first step, membership within the Commonwealth network, might lead.

it will all take time, but there is a growing campaign for this to happen and there are now no obvious obstacles. No alle-giance to the Crown is involved and the Commonwealth of today is a very different institution from the one which ireland walked away from in 1949.

Lingering fenian suspicions of course remain of anything that appears to involve British intrusion. But this would be partnership without dominance in a changed world, and fellow-membership in the worldwide Commonwealth network, opening up links and access opportunities to many other regions. And what a partnership it could be! value would be added for both countries. in a way that has never occurred within the eU context, joint Commonwealth membership would enable the so-called irish dimension, seen from the London side, to begin to fuse with the english dimension, as seen from the dublin side. there would be the question of the impact on the North, but the idea’s supporters in dublin see such a move as a strong gesture of reconciliation.

in reality the overlap of interests between ireland and the Commonwealth already exists and is growing. Some 40 million irish people live in Commonwealth countries. A changing world landscape may have turned the idea of ireland’s return from a possibility into a probability.

the existence of a queue of interested applicants is itself a kind of message. it does not, of course, guarantee that they will be admitted. A careful balance has to be struck between the danger of dilution and the invigoration of new members entering the Commonwealth family. either way, the fact that


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states and societies round the world are privately urging their governments to consider applying, or are actually sending representatives to Commonwealth events, says something. it says that the Commonwealth is today’s club of preference, the group that countries ambitious for improvement feel they should join.

the precise status or category of new member states matters not at all. Queen elizabeth is the ruler, the monarch, quite sepa-rately and independently of 16 Commonwealth countries, the so-called realms. the rest are republics or separate kingdoms. New applicants for returning to realm status seem unlikely, although in this modern turn-turtle world of contradictions and reversals, stranger things have happened. fourteen other British overseas dependent territories nestle in under British membership, but increasingly aspire to have a bigger role at the Commonwealth table.

in the end the Commonwealth will succeed or wither away as a multilateral forum, depending on its practical useful-ness and the clear benefits it brings to its members, very much including Britain. today the UN struggles to reform but remains at loggerheads over its own reform, over fundamental issues and facing severe internal problems to boot. Nothing could replace it, but something else seems to be needed in the twenty-first century. the various regional alliances and organi-sations are growing in power, but by definition lack the global spread the Commonwealth offers. the european Union is the biggest and potentially the most powerful regional bloc, but is beset by fearful current problems which hold it back and becalm its economic activity. the world trade organization (wto) still struggles to avoid deadlock at doha on farm subsidies, while those outside the existing trade blocs feel increasingly frustrated at their still substantially barred access to the richer markets.

By contrast, the Commonwealth scene looks somewhat more positive. intra-Commonwealth trade appears to be expanding steadily, as are investment flows between its coun-tries. A recent research paper by the royal Commonwealth Society showed that the importance of Commonwealth members to each other in trade matters had grown substantially



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over the last two decades, with intra-Commonwealth exports up by a third. ranging over issues from competitiveness to gender questions, to human development to environmental performance, the paper found the evidence ‘seemed to suggest’ that Commonwealth membership brought measurable trade advantage’.6

Much more work remains to be done in establishing the full picture of contemporary Commonwealth exchanges. None of this may amount to the case for anything like a Commonwealth free trade Area (an old idea attempted twice in the twentieth century, although in very different conditions). that era is past. But it does suggest a pause for thought as to how in today’s very changed trading conditions, this extraordinary network, with a reach stretching right across regions and continents and embracing a third of the world’s population, might (if it can be strengthened imaginatively) do a better job than the existing battered international institutions.

in particular it is surely time to think how a more ambi-tious Commonwealth of Nations could become a distinct force in both opening up the world economy and uniting the more well-intentioned and responsible countries in facing up to the ugly dangers of the age – such as terrorism, pariah nations, entrenched and paralysing poverty, protectionism, inter-ethnic wars, corruption and rotten governance.

what the Commonwealth requires now is perhaps less intergovernmental grandeur and more practicality. what governments need to do, the British government included, is to study more closely, and then reinforce, the strong develop-ments now taking place within the Commonwealth network. for example, as intra-Commonwealth business expands, and intra-Commonwealth cultural and professional ties multiply, the need for easier intra-Commonwealth travel increases. it ought to be possible to replicate something like the busi-ness travel card system operating between six members of the Asia-Pacific economic Cooperation group (APeC).

Better information about the Commonwealth potential – not just its history but its beckoning future – needs to be embedded in the educational curriculum of member coun-tries, Britain most definitely included. Scholarship and study


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opportunities in all directions need to be fostered and increased – not just one way towards the UK and not just at govern-mental level. All universities, British and Commonwealth, have a part to play in enlarging the volume of scholarship schemes. A Commonwealth trade and investment Bank has been proposed by indian advocates to boost Commonwealth trade and invest-ment potential. Numerous new Commonwealth initiatives are springing up of their own accord, unheralded and unnoticed by officialdom, such as the Commonwealth environmental investment Platform, bringing entrepreneurs throughout the Commonwealth together. there is Commonwealth exchange, the brainchild of two inspired young activists, tim Hewish and Jim Styles, determined to get at the new facts. web searches reveal many more.

for Britain specifically, in addition to external opportuni-ties and benefits, there are internal gains to be harvested. No one has a precise estimate of the numbers of British citizens of Commonwealth origin or with close Commonwealth connec-tions. But the guess is that this ‘Commonwealth within’ is very large. A Britain with a more clearly articulated Commonwealth role could be a friendlier and more unifying place for millions who are uncertain where their loyalties lie or with what causes they should identify. when disunity is tugging at every edge of British nationhood, the Commonwealth story could pull powerfully the other way, whether against Scottish separa-tism, alienated cultural and ethnic groups, or rootless younger generations.

Although, as we have seen, countries continue to queue up to join the Commonwealth as it is – which must say something for it – the question is whether it could ever carry enough clout in its present form to perform this wider role. is it firm enough and strong enough to meet and police its own high standards in terms of human rights, the rule of law and democracy in its various forms? that is the key issue on which the leading member states of the Commonwealth are focusing. in addi-tion, one other way forward might be to offer a much closer association, if not actual membership, to some other important countries that are outside the existing blocs or uncomfortable within them, but plainly belong in the democratic camp.



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An intimately allied grouping that embraced (if loosely) Japan, india, Canada, Malaysia, South Africa, Australasia and the UK, for a start, and had the good wishes of the Gulf states on board as well, would indeed be a network of common wealth, interests and power, able to speak on friendly but firm and equal terms with the American and Chinese giants. it would be able also to stand up for common values of justice and democracy in a way that no other international institution currently seems capable of doing.

the Commonwealth template stretches over this new scene, bringing a clear and calming prospect of betterment and common purpose. its roots are old, stretching back into the histories of its original members, but its character today is youthful – in the most literal sense. Half the 2 billion or more citizens of the Commonwealth are under 25. for women, its declared aim is a far better future and a much better gender balance generally.

over it all presides Queen elizabeth ii, as she has done for 60 years past – an undeniably unifying influence, held in high affection and leading the way to the future with vast experience and skill. the paradoxes are powerful – a monarch guiding the way to a new world order! Succession to the role of head of the Commonwealth is not automatic. when the time comes, the Commonwealth membership will want the right to choose. But there is every reason to suppose that the choice will continue to fall on the occupant of the British throne.

As a bloc, the Commonwealth is historically one of the most successful collections of nations in world history. But of course it is not a bloc in the conventional sense. its links are electronic, not geographical; they are digitally networked, not hierarchical; they are between peoples and societies and the modules within each social structure. the challenge from the back of the hall, or from the journalists in the front row – who is in charge? – cannot really be answered in the usual terms. the nearest answer would be that the people are in charge, or perhaps it is nearer the mark to say the network is in charge. the Commonwealth is a creation of self-assembly. it is not the United Nations, nor even a pale replica of it. And it is not a regional bloc like the battered european Union. it is an escape


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from these structures and it leads to territory that these organ-isations do not reach, and often cannot see. this is its power and its weakness. it is a truly vibrant global family of cultures, economies, societies and political groups, far from perfect but looking in the same direction.


13

driftiNG No MoreConclusions, Gateways and the

Possible dream

My editor at the Daily Telegraph in the early 1960s, Sir Colin Coote, a veteran Liberal (Lloyd George) Member of Parliament, had an alarming habit. He would cross out the conclusion in a carefully argued draft leader submitted to him and insert the opposite. the rest he left the same. readers who dislike the ending here may do likewise. Modern interactive fashion, where the reader adds the ending of their choice, allows this. But the book’s conclusion is clear and straightforward (even if the implementation is not). it is that in a world of networks and almost total instant connectivity, Britain has found a role. it has no need to make a choice between America and europe or anywhere else. it need only choose the network world and is remarkably well placed to do so. those who still believe other-wise can stop here or consult their MP before continuing.

four years ago, in 2009, a pamphlet was published on British foreign policy, or lack of it, entitled ‘Adamant for drift’.1

the words were taken, of course, from one of winston Churchill’s most famous polemics as he deplored the inertia of the British establishment in face of rising Nazi power.

After the war and with the allies victorious, Churchill had his own vision of Britain’s future role and the great choices that


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drifting no more

would have to be made. Between europe and the open sea, Britain, he said, would always choose the open sea, and the nation would position itself between three interlocking circles of power and influence – America, europe and the Commonwealth.

As faith and interest in the Commonwealth dropped away, this grand sweep became modified and Harold Macmillan talked about Britain as a ‘bridge’ between America and europe. Somehow, Britain could have it both ways, ride two horses. it could be in europe, even at the heart of europe, and still have a specially close relationship with the United States. the bridge dream lived on and was still being entertained by tony Blair right up to the end of the twentieth century.

it was of course all based on fantasy. the bridge led nowhere, stopping like the Pont d’Avignon, in midstream. the Brits could dance on (or under) the bridge but it would lead to no dry land, no further bank of safety. Hence the sense of drift, the lost role, particularly in the Blair years.

Meanwhile, right through from the post-war period, the foreign policy experts and ‘realists’ were telling us that in the end Britain indeed had to choose. either it had to be a fully committed and integrated part of the european Community (subsequently Union) or it had to be America’s junior partner – the 52nd state. there was no other way forward.

the message of this book has been that the experts, too, with their insistence on a choice – usually for europe – have now been overtaken by new realities. An entirely new world of connections, part real and physical, as in the past, but part stunningly new, virtual and globally comprehensive, has already emerged. what is more, these two worlds are becoming intertwined. in their book The New Digital Age,2 eric Schmidt and Jared Cohen quote the example of the virtual Kurdistan – spread by history and politics over four nations – assuming a new united reality via the web. But other examples abound, as nations large and small, peoples, ethnic and tribal groups rediscover their identity and their ambitions. the live, interac-tive web world and reality are indeed becoming inseparable. the armies of traditional experts and analysts, locked in a pre-digital age, can fold their tents and move on, maybe, hopefully, to new and better-cleared ground.



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in a world of hyper-connectivity, Britain can and must escape the ‘choice’ trap and manoeuvre itself into a completely new role. it happens to be in an exceptionally favourable position to do so. By a lucky chance the old Commonwealth network, although largely discarded, was never completely dismantled. Consigned to the attic of public and policy debate, instead of withering away, it was quietly acquiring entirely new strength, relevance and purpose. the choice dilemma, so beloved of the policy gurus and analysts, could be left behind, and the Commonwealth network was one of the gateways to a quite different world.

to be sure there are still immensely tough asks ahead. Chapters of this book have tried to explain how powerful and entrenched delusions about British and world affairs have stood in the way of a new opening for the British nation. they have shown how the ‘europe question’ and the American ‘special relationship’ question, left-overs from the last century and the pre-digital era, continue to cloud the view ahead, and, together with flawed economics, distort the way forward for Britain’s true new prospects and priorities. it has been argued that shallow thinking about democracy and governance misleads, that green zealotry is trying to take Britain in false directions and hurting, not protecting, the environment, and that revolu-tions in the world’s energy mix are changing the whole basis of foreign policy. these and a dozen other myths and illusions deform policy thinking and the public debate. Giant obstacles still lie across the pilgrim’s way.

of course, there are those who say none of this matters. experts and electoral strategists argue vociferously that there are few votes in foreign policy matters, that the electorate is not very interested in international affairs or the eU, or indeed in very many issues about ‘abroad’ at all.

this view could not be more wrong and misleading. it is wrong because foreign policy is not just about ‘foreigners’ and remote international issues, or abstruse diplomatic questions. Nor is it just about the rights and wrongs of ‘humanitarian intervention’ (the unhappy Blair war doctrine which sucked Britain into the iraqi and Afghanistan conflicts, and from which the west now seems to be gradually moving away, even while it hovers on the edge of the Syrian dilemma).


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these are certainly issues that preoccupy people greatly, but our overall foreign policy goes far wider, and reaches far deeper into national life and domestic interests. it concerns our democracy, our law, our national identity, our purposes and priorities. these are central voter concerns. they shape our daily lives. the public have long since cottoned on to this, even if the pollsters and policy-makers have not.

there is hard evidence for this shift. it is confirmed by surveys of public worries and interest. Concern about Britain’s role in the world is now far more central in the public mind than it was a decade ago. the mood has broad-ened out from arguing about Britain in europe, or Britain and America, into Britain’s wider role, positioning and purposes in an emerging global landscape utterly different from what has gone before.

Global environmental concerns, terrorism, energy security, immigration and its domestic impact, combined with doubts about who is in control and where legitimacy now lies, are all now seen as public concerns, in striking contrast to the more homely and standard list of voter worries of the previous era.

Less understood by many political policy advisers and would-be strategists is the way in which such matters, far from being low in the list of issues resonating with voters as simpli-fied polling questions about ‘foreign policy’ often suggest, may actually be the enveloping and primary concerns that move public support for, and attitudes towards, parties, polit-ical leaders and national governments. there now seems to be a pervasive feeling, far more evident than ten years ago, that Britain’s international stances, relationships and poli-cies are just as much the keys to our national health, stability and cohesion as the more traditional domestic issues and poli-cies which used to be packaged as ‘bread-and-butter’ issues or ‘law-and-order’ issues, or subsumed in the old simplicities about public-versus-private sector and a party’s commitment, or otherwise, to public spending and public services.

instead it could be – and findings seem to support this – that the defining of Britain’s international role in transformed world conditions provides the clearest answer to the central question of who we are, what binds us together, what common purposes



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command our loyalties and how our society coheres in face of new and often threatening outside forces.

tip o’Neill, the wily old Boston irish politician and Speaker of the House of representatives, used to aver that ‘all politics is local’. He was a fascinating character and i met him several times. i particularly liked his other political adage that ‘the squeaky wheel gets the grease’. that remains true, but both tip and the assembled throng of pollsters and opinion analysts and electoral strategists are wrong about it all being local in the usual sense. Local is now the reach of a keyboard, the click on one button, the instant two-way digital tie-up. Local and global have become a single thread or stream. that does not mean a weakening of local and national loyalties, or a yearning to belong. on the contrary – and this is the apparent paradox of the network world – it seems that global connectivity carries with it the equal and opposite impulse, the imperative need for local and national identity.

what is now on offer

Now on offer to the British people, and becoming well within reach in a changed world, is the opportunity to be part of a brilliant, ancient, new, dazzlingly beautiful, bustling, inven-tive Britain – not a frustrated ‘leading nation’ trying to recreate the past, not just another european country, although part of europe, not just a shrinking and declining power, although part of a shrinking world, not just a compliant Atlantic satrapy, although a good friend and partner of America.

instead, Britain’s role could now be as the great networking agent, the electrifier, the new adrenalin for the emerging and re-emerging nations, the enabler, but not the leader, in a conflu-ence of common attitudes, exchanges, dialogues, concerns, trades, interests, priorities and pursuits, the like of which the world has never seen before in history, not even at the height of the great empires from the roman to the British.

this Britain has to learn how to turn old friends into new ones, how to be an intellectually rejuvenating force for old nations recovering, for Latin America reviving old


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half-forgotten ties, for Africa rising, for Asia half-booming, half-teeming still with impoverished millions. it can become the ready support for small nations, as well as the confident partner of big ones – the guide and servant, hub and transit, opportunity and adviser, ready ally, friend in need but also business partner.

All will become clearer if first of all there can be agree-ment on the central reality of today’s network world – that its driving forces, its power sources, its centre points and fortresses of persuasive pressure, wealth, influence and initia-tive have changed fundamentally, and changed the possibilities and pathways for nations such as ours.

Additionally, the powers of self-organisation and assembly, welling up from grass-roots groupings, cells, units, clusters and individual insights, have all been energised and channelled as never before in history by digital technology and the informa-tion age. total and constant web connection and e-enablement have created a permanent revolution, and a permanent chal-lenge to traditional conduct of governments as never before in history, and such as the revolutionary ideologues of the twen-tieth century, and even we of the thatcherite generation, never even imagined.

this has not defeated national authorities or collective insti-tutions. on the contrary, in the new network pattern of affairs, nation states have much greater significance and importance. But it alters the necessary behaviour of governments radically if they are to function and retain the trust of the public, and the authority to survive and serve good purposes.

the greatest shift has occurred not because governments have become weaker (although they have in many parts of the world, and in many ways), but because semi-government and non-government networks have become vastly more empow-ered. this explains how and why Asian societies have been able to tap their deeper energies and resources, and combine older state capitalism with a huge fountain of new initiative and enterprise from below. it explains why Asian nations – and African and Latin American, too – have become dynamised and economically empowered, even while also having to adapt authoritarian patterns to new and bolder popular pressures.



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And it explains why authoritarian nations, which constantly seek to ring-fence and isolate their populations from the global information pool, are being placed more and more on the defen-sive as they struggle in a losing battle with digital technology.

this is the new and mobile landscape through which the British nation has to weave an agile and cunning way – redis-covering and rejuvenating old links, making new ties, marching shoulder to shoulder with new partners, falling in with the new sources of power and wealth while balancing its interests with the old ones.

the pattern of practical policy and direction begins to emerge from the fog of present bewilderment and faltering uncertainty for this island nation.

with our geographical european neighbourhood, matters must surely be settled – in so far as they ever can be with a european system inevitably in constant change and adjustment as it, too, tries to adapt to the new global power pattern.

for Britain’s traditional transatlantic ally, the USA, close but not subservient relations and governmental, non-governmental, commercial and cultural linkages of course remain the order of the day – even while America, too, struggles to come to terms with the end of its unipolar decades of hegemony and reluc-tantly adapts to its new and less dominant role as a team player in a network world.

But beyond the Atlantic, beyond europe, beyond ‘the west’ it is the new lines of communication, access and intimacy that are going to save, support and empower Britain. everywhere there are not only fresh connections to be made, but numerous old channels, long neglected and disused, to be dredged, cleaned and opened up. this, the glittering legacy, is what places the British not in a milieu of shrinkage and retreat, not in the role of uneasy appendage to either American or european power blocs, but in a uniquely and historically favourable position to sustain and further its priorities, for the benefit of their own country and for global tranquillity and advance.

the potential instruments of a new foreign policy to exploit these opportunities can now be fashioned and burnished. A kind of duality has to be crafted in the conduct of international rela-tions. the amazing network of Commonwealth connections,


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governmental, but even more at non-governmental, educa-tional, professional and commercial levels, long under-used, are ripe for reinvigoration. the longed-for return of close and friendliest relations with the held-out hands of our old, old friends in the Gulf States, in Latin America, in Central Asia and in North Africa can be rebuilt with new zeal and sensi-tive diplomacy.

All around there are potential allies, with their booming consumer markets, their capital and their influence, ready for, and receptive to, a new rendezvous with the British, happy and ready for old friendships to be mended, broken trust to be restored, ugly misunderstandings to be corrected, sheer neglect to be compensated for, and of course the last relics of colo-nial suspicion and Anglo-centric domination, long exhausted in reality, to be expunged. Particular dangers lie in the residual tendency, to be found in some British quarters, both political and administrative, to administer superior lectures and insen-sitive homilies on democracy, governance and human rights to others. to uphold and take pride in our own core values is one thing. to push them unfiltered down other gullets is quite another.

this book’s central contention is that in the entirely new global landscape that has now emerged, no priority for Britain is greater, more urgent or more central to the country’s future prosperity than in its approach to the Commonwealth system, spreading its network, as it does, across continents, faiths, poor and rich countries, vast and microscopic, opening up deltaic streams of common causes and interests, involving at least seven of the most dynamic, fast-advancing, high-tech econo-mies on today’s earth – maybe soon more. Nothing could be further from the picture of a past Commonwealth of divided and demanding states, shot through with ex-colonial bitter-ness, lined up between ‘white’ dominions and ‘others’, and joined only by high-minded statements of principle, noticeably ignored in practice.

All that has gone, except in the minds of a few, especially in Britain itself, who still fail to see that a completely transformed Commonwealth has emerged – one, although of course not the only one – of a powerful new set of foreign policy channels



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and gateways at our disposal if we have the wit and insight to use them.

the digital age of revolutionary communications allows Britain to reassess old links and weave together new ties and partnerships. it frees Britain from the moorings of past decades and offers it a new and safer anchorage in a changed but ever more connected world. we need to drift no more.


ePiLoGUeHeroes, destinies and the

Coming freedom

Health within is health without. to be smart, agile and effective on this new world stage, Britain needs healthy internal structures and a basic sense of common purpose and direction. we will not hold together without this. And for that we need to be at the same time not only in touch with, and proud of, our history, but also completely ready to generate or adopt new ideas. voices continue to talk about leadership and top tables, on both sides of the Atlantic. But it is partnership, not leadership, that is wanted in a network world, and there is no one top table. that is the difference with the past – a shift of attitude and approach which gets right away from any hint that one country is superior to another, or is more entitled to impose its values on another.

But while international conditions and relations have changed fundamentally, we still also need good solid heroes and role models.

for my generation, there was no dispute about it. Churchill towered over everything, embodied everything. for me and for my friends, no one else ever came within a thousand miles of matching his stature, his impact, his inspiration, his humour, his energy and his marvellous command of the english language. we loved the man and we loved what he loved.



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He entered my childish mind – i must have been four – via a ditty. it went: ‘Underneath the spreading chestnut tree, Mr Chamberlain said to me, “if you want to get your gasmask free, you must join the ArP.” ’ ‘No,’ said Mr Barber, who looked after the pigs. ‘You got to change that. it’s Mr Churchill now. Sing it again. “Underneath the spreading chestnut tree, Mr Churchill said to me…” that’s better. Now you know.’

My luck was to have lived in this man’s lifetime, and even to have met him and stayed in his home. one July morning i received a telegram from Lady Churchill inviting me for a weekend at Chartwell. She had told her granddaughter edwina (Sandys) to come with her then husband – Piers dixon – and two friends. i was one of the friends.

the pre-war generation used telegrams a lot, and confirming a weekend by this means was apparently the usual way. the other weekend guests were field Marshal Lord Montgomery and Anthony Montague-Brown. Mary Soames came for lunch on Saturday.

the dining room at Chartwell was upstairs. Churchill himself was very, very old, sitting at the head of the table but only occa-sionally coming out of a sort of reverie. the field Marshal talked a lot and said that what was needed in europe was a military figure (it was the weekend Marshal Koniev had just been given warsaw Pact overlordship). He plainly had himself in mind.

in the afternoon we played croquet, with Lord Montgomery giving a lot of advice to everyone on what to do, which ball to croquet, etc. it was the custom each evening at Chartwell to go down to the lower part of the house to a cinema. the first evening we had Greengage Summer, with Susannah Yorke. following it was made less easy by Monty giving a running and loud commentary for winston Churchill on what he believed was happening and who, in his opinion, were the bad guys and the good guys (not always accurate).

Later Monty asked me to go to China with him. i declined, but i did persuade him to come along to a packed Bow Group meeting at Caxton Hall one evening and tell us how he believed the planet should be organised.

So much for a brief brush with history, destiny and the giants of yesterday.


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i have three times been spared from sudden extermina-tion by the Good Lord and i occasionally wonder why. first, a stick of bombs wiped out our rented home in Hereford Square, but we had left for the country. Second, a Comet airline nearly came to grief approaching Nairobi, mistaking the game park lights for the landing runway (‘we are not going to make it,’ said my neighbouring passenger cheer-fully). the third time, years later in the 1970s, they tried to get me after serving in Northern ireland, but left a bomb in denis Howell’s garage at his Birmingham home instead. (they got the wrong man, said the Daily Mirror helpfully, and sent round a photographer to picture me outside my own house. My wife explained i was out.)

After four years round the Cabinet table, i was finally dropped by Margaret thatcher, in a kindly way in her upstairs room one evening: ‘david, i am not going to include you in the new Cabinet – go and play a key backbench role as Chairman of a Committee.’ i did just that and thus embarked on ten marvellous years as Chairman of the Commons foreign Affairs Committee. there i worked with wonderful and loyal friends. Party politics simply did not come into it. At the end, when i finally retired from the chairmanship, the members gave me one of my most treasured possessions – the full and comprehensive Times Atlas of the World. At the top of the ten signatures inside was that of the wonderful Peter Shore, political opponent but very good friend. His scorn for the bureaucracy and smug hier-archies of the european Community, even then (mid-1990s), knew no bounds. Had he lived to see what he rightly fore-cast, and feared – the vast centralising, homogenising demands of the Lisbon treaty, pillars of the european Community all crushed into one dangerously fissured column – he would have been almost, but not quite, lost for words.

a sacred river

in the final quarter of the twentieth century, the inner health of the British nation at last began to be restored – by a constant stream of creative thoughts and ideas, but also by not losing



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touch with or pride in our past, recent or distant. it seemed as though a sacred river was again flowing through our affairs. A wonderful and pleasant sensation began to take hold that we in Britain were, once again in our history, just a little ahead of the game. we were not prophets, but we could see some obvious common-sense trends developing. we had a good view from the watchtower. that in turn gave us something new and inter-esting to say, and something to offer in international circles. Britain stood for something. others began to crowd round to learn what we were doing and how we saw the changing world. we can do this again.

in the 1970s and 1980s, it was already clear to the lay observer that the oncoming computer age and consequent information revolution would radically change the patterns of work throughout the planet and reshape industry and society, shifting power away from the advanced west, away from centralised authority and away from the conventional structures of government altogether. An e-enabled populace would take democracy, opinion and analysis increasingly to the laptop, the desk and ultimately the street. Governments everywhere, weak or seemingly strong, would be challenged as never before. it was equally clear that the new technology would alter the whole pattern of international relations and the shape of the world economy. it would change, too, the entire agenda of requirements on governments if they wished to retain legitimacy, as well as the character of conventional politics. All this was crystal clear (and set down in black and white) by the fourth quarter of the twentieth century. Yet years later, in the second decade of the twenty-first century, opinion-formers in the current decade have alighted on these long-observed, indeed established, shifts as novelties – revela-tions to an astonished world.

one of the tiresome aspects of later age is that one sees the wheel being constantly reinvented – and at considerable costs when a moment’s visit to the past would show all that is necessary. the ‘discovery’ that the whole pattern of work and employment has changed in the internet and high tech-nology age – all written up decades ago, and now the focus of laboriously formulated and costly research programmes by the


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likes of the eSrC (economic and Social research Council) and other research bodies – leaves a deep sense of frustration. But one must contain such feelings. it was ever thus. each genera-tion has to repeat mistakes and reinvent the obvious.

onto the insights about a transformation in the pattern, and nature, of employment in the modern economy we grafted, at the advent of the thatcher era, two more associated pros-pects. these were, first, that the days of mass, powerful trades unionism, based in large-scale production plants and wielding paralysing power over the economy, were on the wane; and, second, that the class war between labour and capital, workers and bosses could be, if not ended, substantially ameliorated if a far greater number of wage-earners could also be owners, with ‘a little bit up the back of them’ as the late iain Macleod put it (whose speeches i also helped draft).

the dream of a capital-owning democracy was of course an old Conservative party theme, promoted by both Churchill and Anthony eden in the 1950s. But by the 1970s, the time was looking ripe to give it new substance both by encouraging council house tenants to buy their freeholds and by spreading the ownership of the previous state-owned behemoths to ordi-nary working people.

in the early 1970s, there was not much enthusiasm for these wider ownership themes. the CBi (then fBi) was suspicious of worker ownership, especially the so-called employee Share ownership Schemes (eSoPs), while the Heath government was fully occupied with incomes policies and the like, as were successive Labour governments.

But, meanwhile, wave after wave of new ideas about spreading popular capitalism and ownership were coming from America, under the inspired advocacy of individuals such as Louis Kelso (author of the remarkable book, The Capitalist Manifesto) and the American lawyer Stuart Speiser, who wanted to provide every American family with eventual stock ownership of $100,000! His best-selling opus was A Piece of the Action (1977).

of course, these visions were full of impracticalities, but they helped build up a picture and a hope of what might be possible, in contrast to the class warfare and militant unionism



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which seemed to have gripped Britain. By the late 1970s they were beginning, but only beginning, to gain resonance.

Margaret thatcher welcomed these ideas, although in the case of wider share ownership and privatisation at first slightly cautiously. She did not want people to get ‘something for nothing’. But on the home ownership side, the enthusiasm and drive of the late Peter walker1 drove the idea rapidly ahead and millions of tenants became owners, both to their own advantage and to that of council estate upgrading and reduced social division.

After the first two disastrous years of the thatcher govern-ment, as it struggled to deal with an impossible legacy of inflation, weak economic performance and trades union antag-onism, when the government eventually came up for air, so to speak, the privatisation programme at last got under way (to my delight). we were on to something very big, poten-tially very unifying if properly handled (which later it was not) and greatly adding to Britain’s at last rising reputation and international weight. this was occurring even before the falklands campaign.

Looking back, it of course pleases some polemicists to attribute Margaret thatcher’s resurgent popularity solely to the falklands event, and it was indeed a remarkable and ably led campaign. Attributing it all to the falklands enables the left and centre-left to dismiss all the other work of the first thatcher government as negative and wrong. But this misleads. well before the falklands campaign the mood was beginning to change and the message was getting through to a British public who were fed up with socialist divisiveness and longed for something better. there was a narrative, a theme, a chart of where we might yet be heading, despite all current priva-tions and miseries – and popular capital ownership became very much part of it.

The coming freedom

the thatcher era enabled some of us to turn certain prejudices on their heads – not least the generally ‘superior’ prejudices


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of the then intelligentsia against middle-class values, the bour-geoisie and suburban attitudes and standards. far from being denigrated, we saw these characteristics as the ones Britain badly needed to reinvigorate itself and regain confidence and reputation, and of course Margaret thatcher embodied them to a high degree. in 1980, i wrote a book called The Coming Freedom, although the publishers, Blackwells, did not seem to quite understand the message and changed it, to my great regret, to Freedom and Capital, which meant nothing new.

in fact, something very new was indeed coming – a rise of liberated enterprise and an expansion of markets – turbo-boosted by computer technology and the dawning information revolution, the like of which the world had not seen since the heyday of the industrial revolution.

inevitably the pendulum swung too far, as always happens with revolutionary new ideas and trends, and reaction set in. the purity and balance of the original thinking was lost as zealotry set in, and the bandwagon became overloaded and rickety. But for a time the sun shone on a revived Britain and the sick man of europe became the pace-setter of europe. the new wave was ridden. the initiative was regained, and can be again. the reprise could be on hand.

Branches of government have a particular problem about recognising new trends and developments in good time. every supposition has to be balanced against. it is nearly always ‘too soon to judge’, until it comes to the point where it is too late to act. Good examples have been, for instance, official caution in evaluating the shale gas and oil revolution which alters the world’s energy balance. Years had to be spent looking at the other side of shale gas or ‘fracking’, debating whether it was ‘here to stay’, hesitating about any commitment of purpose or policy. Another has been the slow recognition of softpower as the key opener to trade and investment opportunities. Another is the slow and hesitant appreciation of the Commonwealth network as the gateway to new markets – all visible, noted and recorded literally decades ago. Yet another is the completely inevitable and very widely predicted crisis caused by the euro system.

when a draft of the foreign and Commonwealth annual report came round to me, supposedly setting out current



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foreign policy aims and priorities, i sat dismayed at my desk. this is what i then wrote:

Yesterday i tried to stop and amend the fCo Annual report. i was told it was too late and it was already at the printers! Sorry.

the people who will be sorry are the fCo tyros. the report’s priorities confirm everything that is feared, however unjustifiably, about the fCo – its obsession with kow-towing to America, its cringing and defensive position in the european Union vis-à-vis Paris and Berlin, its general assumption that the Atlantic west is the centre of the world and its values – about which we apparently should lecture everybody else.

if one wants to understand the fCo viewpoint these days look at its 2012 Annual report. there you will see the top priority given to relations with, and a big genuflection to, the USA, the equally high priority to the european Union, the continued prominence given to NAto – with the rest of the world, the emerging markets, the great booming economies and gigantic new cities of Asia, rising Africa, the Commonwealth network, the new techniques of softpower promotion – and much more – all trailing along behind.

this is strange because nowadays most knowledgeable people, even the commentators, have grasped, albeit belatedly, what was already obvious fifteen years ago or more – namely that it is in the power, wealth, political influence, associations and great new markets of the so-called developing world that Britain’s best hope and major interest increasingly lie in the twenty-first century. europe remains our neighbourhood and region, much of it delightful but economically stagnant (a shrinking part of global GNP); America remains a powerful and important friend and ally (although introverted, confused and turning away from europe); but it is in Asia, Africa, Latin America, and our own unique connections with these regions, especially via the Commonwealth network, that our destiny lies. these are the areas from which we have most to learn and gain – not just economically and technologically, but in moral, behavioural and social terms as well – and where it is most vital to define our future role.


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the foreign and Commonwealth Secretary has pointed this out again and again, as have the facts. But it seems that the fCo machine does not wish to, or maybe cannot, listen.

DH 23.6.12

there was a happy ending – two days later i was told that the report had in fact been delayed and amended somewhat in the light of my comments!

in any mildly hierarchical organisation, there is bound to be a slowing factor before anyone dares speak out. the ‘facts’ have to be checked. the new notions need to be approved at higher levels. the obvious must not be blurted out, or not too soon. there are perceptions to be left unchallenged, however obvi-ously wrong. the emperor without clothes must be allowed to go on his stately way.

But on these pages we are released from the convoy of orthodoxy. we can dart ahead to the space where there is no hierarchy, and there are no organisational procedures and restraints. we can draw in a deep breath of new reality in the cat’s cradle world of digital networks and interdependence in which we now live.

we are moving fast into a world of networks and supply chains of infinite complexity. to survive, we have to lay hold on every possible instrument and asset we can find. one of Britain’s best but most under-used access routes into this new milieu is the vast system of Commonwealth connections in which we happen to be embedded. this offers an entirely changed prospect for a nation in Britain’s position. there is less need than before to talk about maps and challenges because the way forward maps itself. fate and technology have provided us with a better navigational aid than ever before.

Britain can be the best of partners both to its european neighbours and to our old ally the United States, as they, too, face new and bewildering hazards. But the extraordinary combination of the digital revolution, the Commonwealth network, Britain’s own remarkable history and its continued vitality, despite all that has gone before, opens out for us a new and promising highway route. Let’s take it.



Annex A

A DepArture Note

(I drafted this some months before the phone rang (September 2012) and the pM asked me to stand down as Foreign office Minister of State and as Minister for the Commonwealth. But I was pleased with it as a summary of where both the Coalition government and the country were, or ought to be, heading. So I sent it anyway. It reflects nicely many of the points in this book. So here it is.)

10th September 2012the rt. Hon David Cameron Mp

No. 10 Downing StreetDear David,

When you asked me to stand down at the FCo last week I ought perhaps to have made clearer to you that I was already planning to ask for my release, after having volunteered to do two years only, and had drafted a ‘Departure’ letter which I was going to send. Although the matter is now disposed of I am sending you the Departure draft anyway because, having been in and out of Government over the last forty years or so, it may contain some points and tips to assist you in navigating the shoals and rapids ahead.

209-234 OldLinks AnnexesNotes.indd 209 25/09/2013 10:56


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Here’s the gist of it. It explains what I have been trying, at worms eye level, to do and what I hope you will build on:

there has to be a clear narrative or story-line. We found this essential to stay afloat during the darkest early days under Margaret thatcher (and indeed in the first days with Heath).

today’s headline story is obvious but needs better artic-ulation. It is that under your leadership we are seeking to reposition brilliant Britain (helped by the olympics) in an utterly transformed, exceedingly dangerous and bewildering world, so as to give sustained purpose, pride, identity, hope and direction to the nation.

this means first that we have to get off the back foot and take the lead in european reform, and second that we have to build up, with every ounce of muscle and effort, our position in the global network where the bulk of the new wealth, tech-nology, growth, markets and power increasingly lies.

on the europe front we just have to escape the sterile, narrow and polarised debate about Britain and Brussels which always ends by antagonising all our eu friends and splitting the Conservative party here at home – a situation into which we are once again now drifting.

(I have sent ed a paper on the way out on this front. Briefly it says that we have for once to lead the intellectual debate, in a thoroughly pro-european way, in challenging the outdated integrationist and centralist model and showing that the alternative flexible model is far more in line with twenty-first-century european reform needs, as well as with growing cutting edge thinking in other disciplines and fields. this argu-ment can be won, and has a lot of Continental friends, but it has not yet been seriously attempted.)

the bigger part of our story lies now in the so-called emerging world (in fact many parts of it are miles ahead of us). Here we have to draw on every resource of national talent, agility, on old connections and new ones, to penetrate and embed ourselves deeply in the colossal new markets of Asia and Africa, in their vast cities of the future, their technolo-gies, their cultures, their values (often superior to ours when to comes to family cohesion and education). We have to shame-lessly use every entry point we can find. this is a brand new


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a departure note

game (or an old game for us with new rules), but we should be good at it, and the Commonwealth network with its myriad non-governmental arteries, history links and gateways offers one of our best hopes of winning it, combined with our own formidable softpower. Both are grossly under-used assets.

the story of hope people want to hear (over and above the obvious domestic need for economic resilience and recovery) is that exceptional Britain is fully capable of succeeding on this front, despite present problems. You yourself have observed that this is an age when we need the flexibility of the network, not the rigidity of the bloc. It can be put even more concisely. Networks now trump blocs and hierarchies. this means that our bilateral network links should come first. of course we need eu trading clout but the Britishness link is much our strongest asset. We are the networking power par excellence.

It is extraordinary that with all our skills, with our Commonwealth links, with all our experience and ingenuity, Germany is still miles ahead of us in the growth markets and even Switzerland out-exports us to China. In europe and the eu we should be leading reform; in Asia we should, and can, lead the competition. At present we are doing neither.

the very latest energy revolution is also very much part of the new international landscape and fits well into the British story. the media have hardly picked up yet on what is happening, or its impact on the whole international scene and on politics and policy worldwide. (And if I may say so, the Cabinet office grasp of the new trends is also on the weak side.) the states of east and West Africa (many of them Commonwealth and/or very pro-British) are being transformed by the shale oil and shale gas technologies. together with America’s trend to energy self-sufficiency, and with massive new gas (and oil) discoveries right through Asia, the Antipodes, Africa, eastern Mediterranean and Latin America, the whole balance of world politics is changing very fast. Meanwhile Australia is becoming the world’s second biggest LNG exporter and Canada is moving into the front league as a world energy power. these two countries (Commonwealth stalwarts both) are becoming our best friends and allies.

In short, a clear role is truly emerging for ‘amazing’ Britain here, 60 years after that Dean Acheson deprecating remark. All



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we have to do is switch the emphasis of some of our words, themes and policies in line with the new trends and a real sense of national direction and mission begins to come together. We have also to be the lead designer, as we have been in the past, of the new global institutions and initiatives required to meet twenty-first-century tasks (e.g. your chairmanship role for next stage MD goals).

of course none of this resolves instant challenges – the sick eurozone, the wobbly Arab Spring, the weak investment confi-dence, zero growth, bad energy policies etc. But in the present rough and heavy seas this story does provide a destination and a focus for hope. It can show that despite all the present diffi-culties Britain is exceptional – as a safe haven and an agile survivor, with excellent prospects, kind but competitive – and MuCH better placed than most others to adapt to the new international realities.

In sum, the twin ‘vision’ priorities and messages are:

a) to demonstrate real intellectual force of argument in step-ping up front on european reform (half the member states are just waiting for a British lead); and

b) to celebrate uK exceptionalism as a key member of the vast and undervalued Commonwealth network – which speaks our language, uses our systems of justice, looks to us warmly still (as long as we are not seen as Washington’s poodle), is full of rich countries whose wealth we will need to tap, and is the golden gateway to the other emerging (emerged) powers and their rich markets. (No wonder a queue of new countries want to join it.)

this is a really good and potentially inspiring story about where Britain is heading medium term. It escapes the endless tired clichés about security and growth which turn normal people off politicians and political-speak, and it bypasses the defeatism of the eu withdrawalists and isolationists. I have been trying over the last two years, at ground level, to help lay the foundations for turning it all into plausible reality. I hope you and your new team will continue to pursue it con brio.

David Howell


Annex B

AutHorItY HAS to LeArN NeW tASKS

(From The Edge of Now, page 46ff. Written in 1999 and published in 2000, it still seems a good and highly relevant manual for governments a decade and a half later in the still further transformed world conditions from those we were already facing then. A little dated but at least moving on from the endless ‘new questions about the role of governments’ analysts so love to ask, to providing some actual answers.)

1. Authority has to learn new tasks, meet new demands and find new ways of acting and proceeding. What this means is that the business of governing (as well as of managing and directing most other great organisations of commerce and society) has changed radically, and so have the tools of this business. All the old sources of opinion and advice on which the makers and shapers of policy used to rely have to be questioned – especially the advice of social scientists and economists, on which reliance used to be so heavy, and so misplaced.

2. And all the old qualities which were supposed to give rulers their right to rule and imbue leaders with the essence of their leadership have to be revised.



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3. the old centre has indeed fallen apart – whether it be the centre of national government, the centre of the large corporation, the centre of supranational power or any other centres of hierarchical authority. But its fragments cannot just be left scattered and discarded. they have to be re-assembled in a different pattern, carefully but urgently, so as to perform new duties and tasks – and to do so effi-ciently. old fragments have to be combined with new materials – lessons and understandings from the past with new perceptions about the present and future.

4. Above all, the new mosaic of authority requires a binding agent. If our societies are to hold together under immense new pressures and centrifugal forces some of the oldest values and virtues and some of the newest perceptions will need to be blended in proportions of the deepest subtlety. out of this recipe the new cement has to be mixed – strong enough to give identity, attract loyalty and resist anarchy and yet pliable enough to survive conditions of almost terri-fying fluidity and change.

How is this to be done, and by whom?the rest of this book (see The Edge of Now, Macmillan,

2000) seeks to answer this question. Here, in tentative and unargued preview form, are some of the basic stances and direc-tions which rulers and officials, it will be contended, would be well advised to adopt. the need is for the following:

• Deeper recognition by society’s leaders – in thought, word and deed – of the changed nature of authority in all its forms. Deeper understanding that heavy centralism, uniformity and hierarchy are no longer the key require-ments of order, that in an age of interactivity and networks, when people can talk back, authority has to earn respect and loyalty in new ways, to concentrate on new tasks and learn new techniques of governing. the whole approach to the organisation of society has to become far more modest and circuitous.

• More history being taken into account in formulating poli-cies and reaching conclusions about human behaviour. As


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authority has to learn new tasks

Lord Bauer once remarked, ‘antecedents are critical to the understanding of social phenomena’. Yet the world of social science and economics has largely ignored them.

• More humility and caution on the part of national govern-ments and their leaders (and their advisers) when it comes to trying to ‘manage’ something called ‘the national economy’, or ‘create growth and jobs’, along with a greater recognition of the amorphous nature of the whole concept and of the severe limits of central government power in shaping both business activity and society generally (with pronounce-ments modified and reworded accordingly).

• More focus on the real and underlying engines of prosperity and social harmony and on the conditions, as far as they can be shaped by public policy, that promote risk-taking, inno-vation, diversity and healthy markets, and the other basic ingredients of the capitalist process in a world of networks (freedom under the law, a stable political system and stable institutions being the ur-conditions for successful capitalist progress).

• Fuller appreciation of, on the one hand, the weaknesses and inefficiencies of the big state apparatus, and on the other hand, of the plurality and multiplicity of creative sources in society. (the privatisation revolution has taken us along the first stretch of this road, but there is a long way still to go.)

• More vigorous rejection of over-specialisation in learning and research and of spurious quantification and measure-ment of non-measurable and constantly shifting phenomena and behaviour patterns as a basis for policy.

• Greater understanding of the means by which wealth and the benefits of prosperity are shared and spread, and far more scepticism about orthodox and traditional techniques for either measuring alleged inequalities (between individ-uals, between families, between regions) or remedying them (e.g. by frenetic and ineffective income redistribution).

• Wholesale revision of views about the processes of economic and social development, how they are triggered and how they are helped or hindered by public policy (again, with policy language totally altered). Four decades of theor-ising about economic growth, at a level of abstraction and



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generality which defeats all useful purposes, have to be pushed overboard at this point.

• Clearer recognition of the new and even more important roles falling to the nation state entity (e.g. in the field of stronger institutions, wiser and better enforced laws and much greater readiness to discard old and empty roles that the central power is no longer in a position to fulfil). Globalisation and the internationalised network of commu-nications may redistribute power and change the points of influence on people’s lives, but they do not demand the abject capitulation of nation states and the surrender of democratic legitimacy to higher forces.

• Less dependence on misleading international comparisons and less defeatism, inspired by flawed data, about the qual-ities and capacities of individual societies and of nation states (an especially relevant point for the British leader-ship, but of course applicable to all the democracies).

• Less faith in bigness, especially in the organisation of inter-national relations. Less belief in forming, or trying to form, big geographic blocs and more understanding of the need for flexibility, suppleness, subtlety and innovation in alli-ances and relationships between nations.

• Stronger moral leadership – by which one means less lead-ership by opinion polls and constant testing (by highly subjective and unreliable methods) of alleged public opinion. Henry Kissinger reminds us of what might be called the Napoleon the third syndrome – the example of a weak national leader who made himself the prisoner of short-term tactics and publicity coups, and who merely mirrored his own subjects’ insecurities instead of calming them. If he had had opinion polls and focus groups, no doubt he would have been guided by them totally.

Leaders in the new paradigm will be expected to illuminate, to see a little further beyond the edge of now, to have confi-dence in their own assessments and to be bold enough to respect the virtues, qualities, truths and values which it is their duty to maintain. that will be the end of defeatism and, as part Seven will suggest, may well lead to some surprisingly


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authority has to learn new tasks

different conclusions about the status and capacities of coun-tries like Britain from its usual image as ‘a second rate power’, ‘a medium-sized player’, ‘just one more european state’, ‘the european laggard, or sick man’ and a dozen other conditioning epithets.

Not a bad starter manual for governments whether in 2000 or 2014 onwards, as they struggle to retain trust, authority, respect and direction in the present troubled age.



Annex C

tHe eu’S CLIMAte AND eNerGY poLICY

the following are five measures intended to deliver eu energy and climate policies – obviously failing to do so and obvi-ously geared to a previous (pre-shale) age. they are listed here because they encapsulate so perfectly the delusionary quality of public policy thinking not just in two crucial areas of european activity – environment and energy – but also in the economic policy field. emissions trading, strongly promoted by econo-mists, has of course been a disastrous policy wreck in practice. the architects of the scheme have once again left out the polit-ical and real-life factors.

the eu climate and energy package comprises four pieces of complementary legislation which are intended to deliver on the 20-20-20 targets.

Reform of the EU Emissions Trading System (EU ETS)

the eu etS is the key tool for cutting industrial greenhouse gas emissions most cost-effectively. the climate and energy package includes a comprehensive revision and strengthening



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of the legislation that underpins the eu etS, the emissions trading Directive.

the revision applies from 2013, the start of the third trading period of the eu etS. Major changes include the introduction of a single eu-wide cap on emission allowances in place of the existing system of national caps. the cap will be cut each year so that, by 2020, emissions will be 21 per cent below the 2005 level..

the free allocation of allowances will be progressively replaced by auctioning, starting with the power sector. the sectors and gases covered by the system will be slightly widened.

National targets for non-EU ETS emissions

under the so-called effort Sharing Decision, member states have taken on binding annual targets for reducing their greenhouse gas emissions from the sectors not covered by the eu etS, such as housing, agriculture, waste and transport (excluding avia-tion). Around 60 per cent of the eu’s total emissions come from sectors outside the eu etS.

the national targets, covering the period 2013–20, are differentiated according to member states’ relative wealth. they range from a 20 per cent emissions reduction (compared to 2005) by the richest member states to a 20 per cent increase by the least wealthy (though this will still require a limitation effort by all countries). Member states must report on their emissions annually under the eu monitoring mechanism.

National renewable energy targets

under the renewable energy Directive, member states have taken on binding national targets for raising the share of renewable energy in their energy consumption by 2020. these targets, which reflect member states’ different starting points and potential for increasing renewables production, range from 10 per cent in Malta to 49 per cent in Sweden.


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the eu’s climate and energy policy

the national targets will enable the eu as a whole to reach its 20 per cent renewable energy target for 2020 – more than double the 2010 level of 9.8 per cent – as well as a 10 per cent share of renewable energy in the transport sector. the targets will also help to cut greenhouse gas emissions and reduce the eu’s dependence on imported energy.

Carbon capture and storage

the fourth element of the climate and energy package is a directive creating a legal framework for the environmentally safe use of carbon capture and storage technologies. Carbon capture and storage involves capturing the carbon dioxide emitted by industrial processes and storing it in underground geological formations where it does not contribute to global warming.

the directive covers all Co2 storage in geological forma-tions in the eu and lays down requirements which apply to the entire lifetime of storage sites.

Energy efficiency

the climate and energy package does not address the energy efficiency target directly. this is being done through the 2011 energy efficiency plan and the energy efficiency Directive.



Annex D

CoMMoNWeALtH ACCreDIteD

orGANISAtIoNSthe ready-made Network

the Commonwealth ‘family’ – a list of accredited Common-wealth organisations. these are the ones lying outside the governmental orbit. Many more are sprouting up. the network is constantly spreading, as networks do.

• Association for Commonwealth Literature and Language Studies (ACLALS)

• Association of Commonwealth Amnesty International Sections (ACAIS)

• Association of Commonwealth Archivists and records Managers (ACArM)

• Association of Commonwealth examination and Accreditation Bodies (ACeAB)

• Association of Commonwealth universities (ACu)• British empire and Commonwealth Museum• Commonwealth Association for Mental Handicap and

Developmental Disabilities (CAMHADD)• Commonwealth Association for paediatric

Gastroenterology and Nutrition (CApGAN)• Commonwealth Association for public Administration and

Management (CApAM)



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• Commonwealth Association of Architects (CAA)• Commonwealth Association of Indigenous peoples (CAIp)• Commonwealth Association of Museums• Commonwealth Association of planners (CAp)• Commonwealth Association of professional Centres• Commonwealth Association of public Sector Lawyers• Commonwealth Association of Science, technology and

Mathematics educators (CAStMe)• Commonwealth Association of Surveying and Land

economy (CASLe)• Commonwealth Association of tax Administrators (CAtA)• Commonwealth Broadcasting Association (CBA)• Commonwealth Business Council (CBC)• Commonwealth Centre for electronic Governance (CCeG)• Commonwealth Consortium for education (CCfe)• Commonwealth Council for educational Administration

and Management (CCeAM)• Commonwealth Countries’ League (CCL)• Commonwealth Countries’ League education Fund• Commonwealth Dental Association (CDA)• Commonwealth education trust• Commonwealth engineers Council (CeC)• Commonwealth Forestry Association (CFA)• Commonwealth Foundation• Commonwealth Games Federation (CGF)• Commonwealth Geographical Bureau (CGB)• Commonwealth Group of Family planning Associations• Commonwealth Hansard editors Association• Commonwealth Historians Society• Commonwealth Human ecology Council (CHeC)• Commonwealth Human rights Initiative (CHrI)• Commonwealth Jewish Council and trust• Commonwealth Journalists Association (CJA)• Commonwealth Judicial education Institute (CJeI)• Commonwealth Lawyers Association (CLA)• Commonwealth Legal Advisory Service (CLAS)• Commonwealth Legal education Association (CLeA)• Commonwealth Library Association (CoMLA)• Commonwealth Local Government Forum (CLGF)


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commonwealth accredited organisations

• Commonwealth Magistrates’ and Judges’ Association (CMJA)

• Commonwealth Medical Association (CMA)• Commonwealth Medical trust (Commat)• Commonwealth Network of Information technology for

Development (CoMNet-It)• Commonwealth Nurses Federation• Commonwealth of Learning (CoL)• Commonwealth organisation for Social Work (CoSW)• Commonwealth parliamentary Association (CpA)• Commonwealth partnership for technology Management

(CptM)• Commonwealth pharmaceutical Association (CpA)• Commonwealth policy Studies unit (CpSu)• Commonwealth press union (Cpu)• Commonwealth relations trust• Commonwealth Scholarship and Fellowship plan (CSFp)• Commonwealth telecommunications organisation (Cto)• Commonwealth tourism Centre (CtC)• Commonwealth universities Study Abroad Consortium

(CuSAC)• Commonwealth Veterinary Association (CVA)• Commonwealth War Graves Commission (CWGC)• Commonwealth Women’s Network (CWN)• Commonwealth Youth exchange Council (CYeC)• Conference of Commonwealth Meteorologists (CCM)• Council for education in the Commonwealth (CeC)• Council of Commonwealth Societies (CCS)• english-Speaking union (eSu)• Institute of Commonwealth Studies (ICS)• League for the exchange of Commonwealth teachers

(LeCt)• organisation of Commonwealth united Nations

Associations (oCuNA)• round table: Commonwealth Journal of International

Affairs (CJIA)• royal Agricultural Society of the Commonwealth (rASC)• royal Commonwealth ex-Services League (rCeL)• royal Commonwealth Society (rCS)



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• royal over-Seas League (roSL)• Sight Savers International (rCSB)• Soroptimist International Commonwealth Group (SICG)• Sound Seekers• Victoria League for Commonwealth Friendship (VLCF)


NoteS

Chapter 1

1. the current form of communication between overseas posts and the Foreign and Commonwealth office. In 2011 it replaced the familiar e-Gram.

2. ‘For the best answers to this question see my Demos pamphlet ‘Easternisation’, published in 1995 and arguing that ‘the rising power and influence of the Asian world is the most compelling theme of our times and will come to pervade the whole political debate in the old West and inside our Western societies’.

It has all taken a pitiably long time to permeate the Western intelligentsia, but for one of the best current expansions of this theme see pankaj Mishra’s analysis of the West’s squandered moral authority and the rising awareness and assertiveness of the east – driven, not least by the internet and the information revolution.From the Ruins of Empire (Allen Lane, 2012/penguin, 2013).

3. According to Wikipedia, the expression was first discussed by Ludwig von Mises. Catallaxy was later coined and made popular by Friedrich Hayek, who defines it as ‘the order brought about by the mutual adjustment of many individual economies in a market’. Hayek derived the word from the Greek word ‘katallasso’ (καταλλάσσω), which meant not only ‘to exchange’, but also ‘to admit in the community’ and ‘to make friends’. Christopher Frey considers catallaxy as the key for a deeper understanding of the


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notes to pages 13–24

knowledge economy and knowledge-based society, but he doubts that it is price that rules the market. Catallaxy also becomes a new dimension in software design and network architecture.

4. Lloyd George said, in a speech in paris, that ‘the heroic deeds that thrill humanity through generations were the deeds of little nations fighting for their freedom. Yes, and the salvation of mankind came through a little nation’ – and more in the same vein. romantic but oddly of increasing rather than decreasing relevance.

5. ‘the power of the powerless’, essay by Vaclav Havel in 1968, said to be his most influential. I met him twice, once when he was still on the run and being followed by the police, and once later in the stately surroundings of Hradcany Castle when he had become president of the then new republic of Czechoslovakia. He wore a pale blue pullover.

6. Attributed to James Maxton, leading Independent Labour party poli-tician in the 1930s. Also used by Denis Healey in more recent times.

Chapter 2

1. Norman Davies, The Isles – a History (Macmillan, 1999). 2. Figure from the International Monetary Fund. 3. these figures must have come from old and dusty records. today,

17 years later, the official record shows that there are between 70 and 80 active and accredited Commonwealth bodies – ‘the Commonwealth family’ – see Chapter 12.

4. I have drawn both here and in Chapter 10 on the pioneering work of tim Hewish and James Styles, Trade and Common Wealth Growth (Hampden trust, 2012) and on Global trader’s Guide to Commonwealth Markets.

5. See eric Schmidt and Jared Cohen, ‘the New Digital Age’ (John Murray, 2013), p. 4ff.

6. Viz. on The Andrew Marr Show, 3 February 2013. 7. See Australian Government ‘Bilateral and regional trade

Commission report 2010’. Cites 300–400 bilateral trade arrange-ments now in force. See also richard Baldwin The Future of the World Trading System: Asian Perspectives (Vox, 2013). Baldwin observes that this proliferation of bilateral trade agreements is ‘eroding Wto centricity in global trade governance’.

8. In his Address to the electors of Bristol, edmund Burke insisted that ‘your representative owes you not his industry only but his judgment; and he betrays instead of serving you if he sacrifices it to your opinion’. today’s Mp, bombarded by hundreds of emails daily from constituents, local lobbies and pressure groups galore, has a far harder time of sticking to the noble Burkean precept.


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9. See the seminal essay by professor Neil Gershenfeld – Head of MIt’s Center for Bits and Atoms – in Foreign Affairs, November/December 2012, entitled ‘How to Make Almost Anything – the Digital Fabrication revolution’.

10. Article in Foreign Affairs, Ibid. November/December 2012: ‘How to Make Almost Anything’.

11. eric Schmidt and Jared Cohen, The New Digital Age: Reshaping the Future of People, Nations and Business (John Murray, 2013).

Chapter 3

1. the title of the concluding report (by Graham Hutton) of a British business group’s 1951 mission to the uSA, to learn why we were definitely not prospering while America so evidently was!

2. Brazil, russia, India, China, South Africa – the last one added by some and not fitting the categorisation quite so well.

3. The Times Higher Education university rankings (2013) show that three of the five top places are now occupied by universities in the Far east.

4. Jane Jacobs, Cities and the Wealth of Nations – Principles of Economic Life (Vintage Books, 1973).

Chapter 4

1. of course, at the age of 74, I never expected to return to office after all those years. Ministers ‘let go’ in the past rarely come back. But it was good – a bit like finding a third layer in life’s box of chocolates. And the gap between ministerial jobs – 27 years – was, I believe, something of a record.

2. Incredibly, the House of Lords, although stuffed with ex-foreign ministers, ex-ambassadors, ex-FCo permanent secretaries and foreign policy academics, has no committee dealing with foreign policy overall. to be sure, it has a family of european union committees, but these inevitably can only look narrowly at Britain’s world interests through the eu prism.

3. A papal footnote: at the time of the change-over to pope Francis, many confident prelates and religious authorities could be heard on the airwaves asserting that the Catholic Church, with over a billion adherents, was the biggest organisation with common beliefs and values in the world. No it isn’t. the Commonwealth, with over 2 billion citizens, is bigger.

4. Japan gets very poor coverage on the whole in the British press and is repeatedly quoted as an example of prolonged economic stag-nation, a lost decade and so on, which we don’t want to follow. It


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is true that back in the 1990s the official GDp growth figure fell, unemployment rose slightly and public debt ballooned (although it was almost entirely held internally). But throughout the period, per capita income remained much higher than most of europe and innovation in almost every field – industrial, social, environmental, cultural – continued apace. the 2011 tsunami of course rocked the nation, but the GDp figures are in any case nearly always misleading. A better description would be a period of stability than stagnation. Give me that kind of stagnation any time!

5. See CBI Global trade Information Services. See also Common-Trade, Common–Growth, Common-Wealth by tim Hewish and James Styles (the Hampden trust, 2012).

6. IMF World economic outlook Database, August 2013. 7. H.M. Christmas Broadcast 2012/13. 8. H.M. Christmas Broadcast 2009/10. 9. According to recent data from the Centre for economic and

Business research (CeBr).10. See note p. 11.

Chapter 5

1. John Buchan, Memory, Hold the Door (Hodder and Stoughton, 1940).

2. organisation of the Islamic Conference; Shanghai Cooperation Group; African union; Gulf Cooperation Council; Arab League; union of South American Nations; South Asian Association for regional Cooperation; Asian Network of Major Cities; pacific Islands Forum; Caribbean Community and so on.

3. Barbara tuchman, The March of Folly – From Troy to Vietnam (Michael Joseph, 1984).

4. Quoted by Barbara tuchman, The March of Folly – From Troy to Vietnam (Michael Joseph, 1984).

5. Matthew ridley, The Times, 13 January 2013. See also Matt ridley and L.J. Ganser, The Rational Optimist – How Prosperity Evolves (Fourth estate, 2010).

6. David Howell, Easternisation: The Rise of Asian States (Demos, 1995); The Edge of Now (Macmillan, 2000).

7. Manuel Castells, The Rise of the Network Society (oup, 1996).

Chapter 6

1. the process is superbly traced in the late professor Keith Middle-mass’s penetrating work Orchestrating Europe: the Informal Politics of the European Union. It shows how over the years, the eu of


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today has been built up in dozens of informal ways and through an extensive sub-culture of committees attracting no publicity, dinner table discussions and private occasions.

2. Norman Stone, A Short WWII History (Allen Lane, 2013). 3. According to Lord Mandelson, among others, ‘joining the euro

would give the pound greater stability!’, Financial Times, 4 May 2012, and elsewhere in speeches and interviews.

4. Bill Jamieson, Beyond Europe (Duckworth, 1994). 5. Hugo Young, This Blessed Plot (Macmillan, 1998). 6. the treaty of Amsterdam, amending the rome treaty and other

treaty documents, signed october 1997.

Chapter 7

1. Henry Kissinger, Does America Need a Foreign Policy? p. 47 (Simon and Schuster, 2001).

2. In its heyday the vast Hapsburg empire, composed of 63 separate principalities, duchies and fiefdoms, rather successfully governed itself under imperial oversight this way. It is true that many deci-sions were either never reached or pigeonholed. But perhaps that would have saved the eu today!

3. the Lisbon treaty, 2009, should not be confused with the Lisbon Agenda, an elaborate eu-wide industrial plan put forward at the time of the 1997 Amsterdam treaty to make europe a beehive of high-tech activity and advance. It failed, as such centralised, top-down blueprints, relics from a past age, always do.

4. As now proposed by the British Foreign and Commonwealth Secretary, William Hague, who has called for the introduction of a ‘red Card’ power allowing national parliaments to halt outright any over-intrusive and unnecessary legislative intrusion proposed by the eu Commission.

5. Hansard. House of Commons Debate on the Gracious Address, 14 November 1990.

6. David Hannay, Britain’s Quest for a Role (I.B.tauris, 2013). 7. David owen (Lord owen), Europe Restructured (Methuen, 2012). 8. ‘Differentiation in the eu: the Development of policy Clusters’.

Discussion paper by Frank Vibert, LSe.

Chapter 8

1. I am paraphrasing from here. He did not quite use these words, but they were certainly the sense of his remarks.

2. Sir Sherard Cowper-Coles, ‘What the Arabs really Want’, lecture to the Conservative Middle east Council, 10 December 2012.


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3. Henry Kissinger, Does America need a Foreign Policy?, p. 82 (Simon and Schuster, 2001).

4. ‘Britain sees ‘mission’ to spread democracy’. Ft report by Alex Barker, 16 June 2009. David Miliband, Foreign and Commonwealth Secretary, is quoted as saying ‘the goal of spreading democracy should be a great progressive project’.

Chapter 9

1. Nassim Nicholas taleb and David Chandler, The Black Swans: The Impact of the Highly Improbable (penguin, 2007).

2. paul ormerod, Positive Linking: How Networks can Revolutionise the World (Faber and Faber, 2012), p. 33 and ff.

3. Gary B. Gorton, Misunderstanding Financial Crises and Why We Don’t See Them Coming (oup, 2012).

4. ‘property rights and Competition: An essay on the Constitution of Capitalism’ (the Centre for Independent Studies, Sydney, Australia 2004).

5. My own problem with the venerable paul Volker is that we once clashed over the euro at a New York conference – my view being that it was flawed and eventually doomed, his that it was here to stay and that Britain should join it, the sooner the better. Not so reassuring!

6. See ‘Global enterprise 2020 – A Blueprint’, by Anil Gupta and Haiyan Wang. The European Financial Review, 18 August 2012.

Chapter 10

1. The Market Oracle, 17 May 2013. 2. I have also been president of the British Institute of energy

economics for nine years and am president of the energy Industries Council.

3. A truly ugly word, short of course for hydraulic fracturing of deep-lying shale rock from which gas is released in prodigious quantities by water pressure, combined with sand and chemicals.

4. Cost estimates for wind electricity at the time of writing are 100 pence per kilowatt hour average for electricity from onshore wind pylons, and 190 pence from offshore pylons. the current cost from conventional plants is 50 pence. Families and firms pay the difference.

5. the most recent estimate at the time of writing is that 7 million uK families face fuel poverty, and over half of all households owe money to their energy suppliers. See DeCC (Department of energy and Climate Change) Fuel Poverty Report, 16 May 2013.


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Also Energy Bill Revolution Campaign. Also The Independent 23 May 2013, claiming that fuel poverty in Britain is ‘the worst in europe’.

6. Figures from the price Comparison website uswitch.com. My latest electricity bill shows that government obligations and taxes, including green levies, now add 20 per cent to my monthly bill.

7. See, for example, the comments of Marcus Beyrer, head of Business europe, speaking of the grim implications of europe’s high-cost energy policies for the chemical industry. His voice is one of many. Senior Shell executive Andy Brown spoke of ‘a ridiculous situation’ where ‘cash-strapped europe is putting a lot of money into renew-ables… meanwhile allowing the power generators to take much more coal and back out gas’ (Daily Telegraph, 30 April 2013).

8. the Stern review, report by Sir Nicholas Stern (now Lord Stern), the economics of Climate Change. october 2006.

9. David Howell and Carole Nakhle, Out of the Energy Labyrinth (I.B.tauris, 2007).

10. An eery experience. A friendly man arrived saying he represented a reputable-sounding campaign against more on-shore wind farms. He interviewed several Mps and asked to talk to me. I was assured we were off the record in a private conversation but in fact I was being filmed and recorded – for Greenpeace. I said nothing very contentious, except that the obvious low carbon way forward was though gas turbines rather than hugely subsidised wind pylons. But Greenpeace made the most of it, implying, quite inaccurately, that I was some sort of Svengali influencing Government policy in the direction of more gas. With less underhand methods they could have got a much better exposition. Generally, the campaigning methods of extreme Greens alienate moderate pro-Green opinion and damage the Green cause.

11. See professor Dieter Helm in the magazine Prospect, April 2013. See also his intensely illuminating work The Carbon Crunch (Yale university press, 2012).

Chapter 11

1. uS Counterinsurgency Field Manual, 2007. 2. See in particular Joseph S. Nye, The Future of Power (perseus Books

Group, 2011), but also many other publications and speeches. 3. Joseph Nye, The Future of Power (public Affairs 2011), p. 17.

Chapter 12

1. See Chapter 1 and also Chapter 4, p. 46.


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2. India, Malaysia, Australia, Canada, South Africa, Nigeria, Singapore, New Zealand.

3. the Future role of the Commonwealth, First report from the House of Commons Foreign Affairs Committee, 1995–6.

4. See again Annex D. 5. report of the Commonwealth eminent persons Group, April 2012. 6. Joan Bennett, ‘Commonwealth Compared 2013’. report on find-

ings of research conducted by the royal Commonwealth Society, using a range of data to compare Commonwealth and non-Commonwealth countries.

Chapter 13

1. David Howell, ‘Adamant for Drift’, Global Strategy Forum 2009. 2. eric Schmidt and Jared Cohen, The New Digital Age (John Murray,

2013).

Epilogue

1. Lord Walker of Worcester – a man of flair, wit and prodigious energy; by decades the youngest member of Heath’s Cabinet, deep opponent of Britain’s entry into the european Community; a highly effective but occasionally doubting minister in Margaret thatcher’s Cabinet. No matter was too small for his attention. He once came to see me when I was serving in Conservative Central office (as Director of the Conservative political Centre), but had also become one of the newest Heathite Mps. peter advised me that my repu-tation made me seem too aloof. to get on, he explained, I should spend more time mixing in the House. He suggested that I should sit in the voting lobby more often, writing letters and catching passers-by. It seemed odd – I never saw anyone else do it – and nor did I. this may explain why my later career never took me to the top.


Index

9/11 attacks 69, 124

Acheson, dean 5, 47, 211acquis doctrine 103, 108, 110Algeria 9–10, 51, 57, 166Al-Jazeera 169Al-Qaeda 126American global chieftainship 31Amsterdam Treaty 87Arab Spring 54, 69, 212ASeAn economic Community

98Asia 11, 18, 20, 174, 182, 206,

211 economic and political power

83 ‘emerging’ powers of 44 power shifts 69 rise of 31, 69 sovereign wealth funds 56 technology zones of 49Asia-Pacific economic

Cooperation group (APeC) 186

Association of Southeast Asian nations (ASeAn) 98, 139

Atlantic pillars 30Auckland Charter of 1996 180

Bacon, Francis 70Bauer, Lord 215BBC World Service 167Benedict xVI, Pope see emeritus,

PopeBerlin Wall 30Beyond Europe (Bill Jamieson) 78bilateral trade, concept of 23, 84Blair, Tony 23, 99, 122, 191–92Bretton Woods 24BRICS countries 31, 69Britain Chambers of Commerce 140 civil nuclear industry 144 coming weakness and volatility

32–36 Commonwealth connection 16,

20

235-248 OldLinks Index.indd 235 09/10/2013 08:59


236

Britain (continued) contribution to global goals of

peace and stability 44 economic position 3 energy imbroglio 151–54 energy policy 147, 149, 151 energy revolutions 148–50 european dilemma 4 european economic

Community 11 exports outside the eurozone 55 exports to the eU 139–40 Falklands campaign 50, 204 foreign policy 14, 18, 43, 47,

131, 168, 190 and future of europe 74–75 as global network player and

partner 53 global role 11 Great Reform Bill (1832) 111 industrial and trade policies 20 internal behaviour patterns 35 investment in new power

generation 147 inward project investment 51 networking with new centres of

influence 45 new kind of diplomacy 37–39 new trade paths 82–86 non-tariff barriers 82 nuclear power programme 148 nuclear reactors 144–45 oil and gas prices 149 old diplomacy and relationship

strategies 34–36 Overseas dependent Territories

185 phases that impacted fortunes

of 29–32 position in europe 35 post-war era 30 principles and values 45 repositioning in the global

network 27–28

roadblocks in development of 63–66

softpower techniques 53 speculation of break-up 17 ties with Latin America 50 total annual emissions 157 War Rooms 39–40British–American relationship 4,

11, 44, 49, 121, 192British citizens of Commonwealth

origin 187British Council 167British empire 9, 30, 182British–eU relationship 18, 44,

74–76, 89, 99British monarchy 65Brown, douglas 79Buchan, John 61, 66, 71Bundesrepublik 80Burke, edmund 122

Cameron, david 48, 75, 172 speech on europe (January 23)

97, 116capital and investment flows 33,

51 from West to developing

countries 56Capitalist Manifesto, The (Louis

Kelso) 203carbon capture and storage 221carbon dioxide (CO

2) emission 45, 152, 155, 156, 157, 221

carbon leakage, phenomenon of 155

carbon reduction 147, 152carbon taxes 152carbon trading scheme 155Chernobyl disaster 145China 30, 46, 51, 54–56, 67, 88,

91, 108, 113, 127, 133, 135, 150, 155, 157, 174, 178, 200, 211


237

index

Choice of Enemies, A (Lawrence Freedman) 126

Christian democratic Union 93Churchill, Sarah 175Churchill, Winston 40, 190, 200civil society networks 52civil war 52, 54, 62, 126, 131,

138, 171Clinton, Hillary 126coal-burning stations 152Cold War 27, 30Coming Freedom, The (1980) 205Committee for Monetary Union

in europe (CMUe) 95Commonwealth Business Council

176Commonwealth Connects 176Commonwealth environmental

Investment Platform 187Commonwealth exchange

186–87Commonwealth Foundation 176Commonwealth Games 177Commonwealth Local

Government Forum 10, 176Commonwealth Magistrates and

Judges Association 176Commonwealth Ministers’ Action

Group 15Commonwealth network 14, 51,

128, 131, 159, 169, 172 accredited organisations under

177 Algeria, membership of 9–10 British connection of members

states 18 Charter of Commonwealth

Values 180 Commissioner for Human

Rights 181 common working language

19–20 cultural and professional ties

186

directory of Commonwealth Organisations 21

economies 11 educational curriculum of 186 as family 175–79 financial business and capital

flows 21 Foreign and Commonwealth

Office (FCO) 18, 20 Free Trade Area 186 governments of member states

19 impact on world and British

affairs 177 Irish dimension of 183–89 non-government bodies 21 positioning of, with respect to

Britain 20 quarrels and black sheep

179–83 Report of 1996 21 role of 20 single trading and investment

area 139 trade and business links 19 Trade and Investment Bank

187 treaty obligations 26Commonwealth of Learning 177Commonwealth Parliamentary

Association 10, 176Commonwealth Secretariat 21,

166comparative advantage, Ricardian

theory of 140‘competence creep’ 109Conservative Party 12, 76–77,

79, 81, 101, 203, 210contact democracy 2Corruption Perception Index

178Cowper-Coles, Sherard 123cyber battalions 26–27cyber markets 83



238

cyberspace 12, 19, 37, 50, 139cyberspace trading 139cyber warfare 112–13

davies, norman 17Debunking Economics (Steve

Keen) 138‘declaration on Island Regions’

87democracy American confusion 123–29 concept of 121 Western versions of 69digital fabrication 25–27digital revolution 12, 122, 207diplomacy relationship 37 transactional 37directory of Commonwealth

Organisations 21douglas-Home, Alec 77–80

economic and Social Research Council (eSRC) 203

economic development 33, 36economic doubts and disputes

140economic growth, driving forces

of 44economic management 36, 142economic prosperity 93–94economic theories, failure of

137–38Edge of Now, The (2000) 68–69,

83, 213electric power distribution 151electronic warfare see cyber

warfareelizabeth, Queen 173, 185, 188emerging markets 20, 33, 206 softpower links with 142emerging powers 44, 84, 85, 105,

140emeritus, Pope 42

emissions Trading Mechanism (eTM) 155

employee Share Ownership Schemes (eSOPs) 203

energy efficiency 154, 221energy resources 2 fossil fuels 146 global transformation in the

pattern of 146energy revolution 145, 148–50,

153, 211energy-rich nations 56energy security 144–45, 147, 152,

154, 156–57, 193eTS emissions (non-eU), national

targets for 220euro (single currency) 94–96euro-corporatism 79euro crisis 55, 101european bloc 46, 73, 85european Commission 80, 95european Common Market 80,

113european Community 21, 31, 76,

78, 115, 191, 201european Court of Justice 104, 111european economic Community

(eeC) 11, 12, 140 British involvement in 81european Free Trade Area 80european integration 20 political motivation for 86 process for 121european Parliament 111european Reform 76, 97 balance of competences 101,

102, 105 British approach for 99–102 differentiation 117–19 for effectiveness and prosperity

107 and europe of endless

bargaining 106–8 Great Reform Bill (1832) 111


239

index

and insecurity 111–13 and notion of different europe

102–8 political strategies for 119 for reuniting europe 116–17 six tasks 108–11european trading bloc 88european Union (eU) 3–4, 17,

23, 74–75 American policy towards 126 British interest and 74–75 British presidency of 110 budget issues 102 carbon trading scheme 155 character and aims of 92 co-operation and alliance 76 currency unification 94 cyberspace trading 139 defence industry 113 economic philosophy 87 emissions Trading System (eTS)

219–20 energy and climate policy 154,

219–21 energy scene 154–59 greenhouse gas emissions 154 integrationist model 48 integration process 73 international role 86 Jean Monnet’s model of

integration 75 joint-military forces 111 Large Combustion Plants

directive 158 lending system 117 national renewable energy

targets 220–21 non-eU eTS emissions, national

targets for 220 political and juridical

integration 35 versus politics 90–94 reforms in see european

Reform

relation between member states 76, 117–19

security policy and defence 111 single market 24, 82, 85, 98,

118, 138–40 superpower status 25 unification, benefits of 93euro-technology 112eurozone 13, 50, 54, 92, 99–100,

103, 115 UK exports outside 55eU–US free trade 83

Falklands campaign 50, 204fiefdoms and tribalism 35fossil fuels power plants 152 resources 146, 148 role in european power

generation 155France 13, 15, 79–80, 93,

99–100, 108 nuclear reactor plants 150Franco-German rapprochement

86, 99Fraser, Antonia 111, 177Fraser Institute’s Index of

Freedom 177Freedman, Lawrence 126free markets, rise of 31, 68,

80–81, 85, 108, 134free trade 80, 83, 140 Commonwealth Free Trade

Area 186 eU integration and 108 maintenance of 33Friedman, Thomas 5, 35Future of Europe, The (david

Owen) 74–75, 115

Gaitskell, Hugh 12, 20, 81gas-fired plants 152gas turbines 150, 152Gazprom 145, 150



240

Germany 81, 86, 93, 99, 100, 106, 113, 117, 211

Gershenfeld, neil 25global Catholic network 42global economic balance 51global energy revolution 145 sources 24global warming 148, 156, 221Greater Middle east 68Great Reform Bill (1832), Britain

111greenhouse gas emissions 56,

154–58, 219–21Greenpeace 158‘The Green Transition’ 147, 153gross domestic product (GdP) 11Gupta, Anilk 141

Hague, William 43, 46, 48, 128Hannay, Lord 114Harare declaration (1992) 180hardpower 166–67, 172Heath, edward 12, 76–79Hezbollah 166Hirsel affair 78Holbrooke, Richard 125Hong Kong 30, 46, 55, 177House of Commons 113–14, 144 Foreign Affairs Committee 20,

179House of Lords 14Howe, Geoffrey (Lord Howe of

Aberavon) 133human rights 55, 174, 180–81,

187, 197hydrocarbons 150 supply of 148hyper-connectivity, notion of 10,

35, 192

India-Pakistan Partition 30Industrial Revolution 205information exchange system 136

information revolution 30, 32, 34, 36, 47, 53, 123, 178, 202, 205

innovation, role in economic and social progress 142

insurgency, e-enabled 166interactive information systems

42Inter-Governmental Conference

(IGC) 107, 111international alliances 26, 36international behaviour, doctrines

of 179international economic activity,

nature of 141International Monetary Fund 50internet 82 cyber markets 83intra-Commonwealth trade 176,

178, 185, 186Ireland, Republic of 10, 183–89,

201Iron Curtain 30

Jacobs, Jane 36Japan 10, 40, 46, 51, 54, 98,

113, 133, 142, 171, 188jihad 126, 171

Kasper, Wolfgang 137, 142Kennedy, Jack 30Keynes, John Maynard 2, 70,

132, 138Kissinger, Henry 75, 125, 216knowledge-driven economies 174knowledge-intensive products 83Krugman, Paul 70, 137

Laaken, principles of 102labour markets 85, 134Labour Party 12, 20, 79, 81Lamers, Karl 93Large Combustion Plants

directive, eU 158


241

index

Latin America 11, 13, 18, 44, 46, 50, 53, 55, 68, 85, 105, 177, 194, 195, 197, 206, 211

left-wing imperialism 33Lehmann Brothers Bank 128,

133, 137liquefied natural gas (LnG)

146–47, 150, 211Lisbon Treaty (2009) 104, 109,

118, 201

Malaysian emergency 30manufactured goods 83March of Folly (Barbara

Tuchman) 66–72Marshall Plan 30Mau-Mau rebellion 30Maxima Carta Charter 180–81Mediterranean economies 54Meiji Restoration 142–43mentefacturing, concept of 83microchip-based connectivity 91Middle east 18, 31, 33, 44, 54,

55, 68, 120, 122, 124, 126 oil and gas dominance 145 see also Greater Middle eastmiddle-income consumers 55Milbank declaration (1994) 180Miliband, david 125Misunderstanding Financial Crises

(Gary Gorton) 137Monetary Policy Committee 130Montague-Brown, Anthony 200Montgomery, Lord 200Morsi, Mohamed 123multinational institutions 55, 64Muslim Brotherhood 123

national currencies, amalgamation of 94

nazi power 190network relationship 18, 35, 37non-tariff barriers 23, 82–83,

139

north Sea oil and gas production 150

nuclear power 144, 148, 151nuclear proliferation 33, 171nye, Joseph 164

Obama, President 54, 124–26Ofgem (UK’s gas and electricity

regulator) 153oil and gas deposits 56‘One europe’, concept of 93O’neill, Jim 31O’neill, Tip 194open and distance learning (OdL)

177Organisation for economic

Co-operation and development (OeCd) 11, 51

Organization of the Petroleum exporting Countries (OPeC) 145

Ormerod, Paul 69, 136, 138Ottoman Sultanate 67

Pacific Rim markets 83Pax Americana 31, 57Pax Britannica 57Perilous Question, A (Antonia

Fraser) 111Positive Linking: How Networks

can Revolutionise the World (Paul Ormerod) 136

poverty 44, 49, 146–47, 175, 186pressurised water reactors (PWRs)

144privatisation, concept of 114projection of power 164Public Accounts Committee 176public opinion, on government

policies 32, 37, 66

relationship diplomacy 37renewable energy sources 148,

152, 155, 157



242

research and technological skills 56

resource recovery techniques 56resource revolution 56–58Ridley, Matthew 67, 70Rise of the Network Society, The

(Manuel Castells) 69Rome, Treaty of 80Royal Commonwealth Society 46,

185Russia 9, 54, 88, 91, 146, 157

Schumpeter, Joseph 132shale oil and gas revolution

145–46, 148, 155Shore, Peter 201Short WWII History, A (Allen

Lane) 70single currency project 85 bail-out assistance 95 euro 94–96single market, notion of 24Siniora, Fouad 120–22social electronic networks 135socialist corporatism 85social legislation 102social market economic model,

Germany 80social systems, e-enabled 44softnomics 32softpower contact points 34 deployment on the international

stage 167, 171 influence and degrees of mutual

trust and confidence 51 language barriers 165 links with the emerging markets

142 as means of advantage 57 of nation 166 notion of 22–28, 32 opportunity 167–72

power strategy in a time of transition 170–72

sources and channels of 168–69

targets and objectives of 169–70

types of 167 use of networks 165 see also hardpowersolar power 148, 151Sovereign Wealth Funds 51, 56Soviet Union 30–31, 38, 54, 110Suez crisis 11, 30, 82supply chains 82–84, 139, 149,

151, 207Syria, civil war in 54, 62, 192

taxes 35 carbon taxes 152technological innovation 44, 131terrorism, e-enabled 69Thatcher, Margaret 31, 68, 133,

134, 144, 147, 195, 201, 204, 210

This Blessed Plot (Hugo Young) 78

Tourk, Khairy 82trade agreements, bilateral and

regional 24trade flows 23, 33, 46, 50, 84,

139–40, 170trade and investment 22–23, 57,

174, 176, 178, 187, 205trade unions 86transactional diplomacy 37Tuchman, Barbara 66–72, 156Turing, Alan 177Turkey 51, 83, 91, 98–99, 110

UK Independence Party (UKIP) 4United Kingdom (UK) see BritainUnited nations (Un) 33, 64,

188


243

index

United States of America ‘the bubble’ of American

supremacy 31 concern over Iran’s nuclear

ambitions 127 conflict with Iran, Iraq and

Al-Qaeda 126 confusion on policy towards eU

126 democratic model, confusion on

123–29 displays of military strength 127 energy policy 149 foreign policy 49, 124 leadership role in world affairs

124 oil and gas production 150 reputational decline in the

Middle east 124, 126 resource revolution 56–58 unipolar moment, with

european Community 31

Victorian London society 175Vietnam War 67village websites 26

War Rooms, Britain 39–40Warsaw Pact 200wave power 151Weltanschaung 87‘The West and the Rest’ division

44Western-style constitutions 122Westminster Parliament 74, 121,

176West-versus-east confrontation

54wind farms 151–53, 158wind power 148, 151, 153, 157World Bank 177–78world energy balance 12World Trade Organization (WTO)

108, 185World War II 14, 27, 28, 31, 70







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