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Catastrophe averted?

The leaders of the rich countries went to Washington to save the world from sliding into deep recess

Vincent Cable

Shadow chancellor, Liberal Democrats

By the low standards of economic summitry, the G20 meeting rated quite high. There was a predictable, no doubt pre-written, communiqué, full of the usual banalities. And the meeting suffered from the absence of the world's most important politician, who hasn't yet taken up office. But, these necessary caveats aside, there were important achievements.

The first is that the meeting took place at all. The ludicrous pretence of the G8 (or G7) that the old western powers should set the global economic agenda has been punctured for good. On a purchasing power parity basis, China has the second-biggest economy in the world and India the fourth. It has been clear for some time that China is lender of last resort to the global system (by, in effect, underwriting US government paper) and the main source of global incremental demand (and commodity price inflation). The Chinese self-parody as the pupil sitting meekly at the feet of a dominant, but erring, master defies belief. It is obviously right that China, India and the other main non-G7 countries should be at the top table.

The second achievement was the clear realisation that unless governments hang together they will hang separately. Enough has been learned from interwar history for us to understand the follies of beggar-my-neighbour economics. Perhaps a warning shock was being sent across the bows of the incoming Obama administration not to reinvent the protectionist tariffs of the 1930s in a new guise, directed at China or Mexico in particular, or aiming to salvage the US auto industry through public subsidy. But this new-found concern for open markets has not yet communicated itself to EU or Indian or Chinese trade negotiators, who show no enthusiasm for lifting the block on trade liberalisation under the Doha round.

While trade policy is on the back burner, macroeconomic policy co-ordination is not. With a few exceptions - Germany notably - there is recognition of the need for aggressive monetary and fiscal policy and for large-scale intervention to recapitalise banks. These interventions can be and are being undertaken nationally. But governments acting in isolation attract critical attention from capital markets and currency speculators, as Gordon Brown is discovering. Structures like the G20 are the best safeguard against chaotic, unilateral action.

Will Hutton

Economic commentator

It was remarkable to gather so much economic and political power in one room to address a common agenda. That was the good news - along with commitments to co-ordinate fiscal expansion, to expand the lending power of the IMF and World Bank (Japan's $100bn loan to the IMF will increase the Fund's lending capacity by 40 per cent), to boost cross-border supervision, to tackle credit rating agencies, to reassess mad accounting rules and require member countries to attack the bonus culture in the financial services industry. A year ago such an agreement would have been inconceivable.

The bad news is that much of this is shutting the stable door after the horse has bolted. Four things have to be recognised: that the world has profound imbalances between high-saving, high-surplus areas in Asia and the Gulf and low-saving, structural deficit countries in the transatlantic economy (Germany excepted); that a system of floating exchange rates and private banks can no longer take the weight of recycling those savings; that unless the system is de-risked and the burden of adjustment is placed on deficit and surplus countries alike, the global system faces breakdown; and finally, that the business model used by the banks to recycle surpluses - securitisation and hedging in the $360trn global derivatives market - is broken.

In plain English, China must accept that its currency must appreciate; Britain and America, that they cannot run their economies on foreign savings; and all players that there has to be a system of semi-fixed exchange rates between the yen, the euro and the dollar.

One tough reality is that, for all their new economic weight, China, Brazil, Russia and India do not have fully convertible currencies - nor do they want to accept the discipline involved in having convertible currencies.

Ann Pettifor

Fellow, New Economics Foundation

Over the past decade, the Group of Eight leaders turned their exclusive annual meetings into jamborees. Rock concerts, protesters and celebrities added populist glitz. However, the real purpose of the meetings - international co-operation and co-ordination - was ducked. At last year's G8 Summit in Heiligendamm, Germany, George W Bush and Gordon Brown vetoed Angela Merkel's agenda item for co-operation over tighter international regulation and financial oversight of capital markets. That task, they argued then, could safely be delegated to "the invisible hand". Now that the fantastic, self-regulating machinery of free markets has proved grossly malfunctional, it is good to hear talk of enhanced co-operation and regulation.

But, in places, the joint statement issued by the 20 world leaders borders on the delusional. The phrase "We must . . . ensure . . . that a global crisis, such as this one, does not happen again" implies that they are avoiding the next war when they are still losing this one.

Even more questionable is the call for continued "economic growth". In a world of finite resources on a planet with limited capacity to absorb toxic emissions, and with bushfires encircling Los Angeles, we would have hoped that world leaders had some awareness of the threat of climate change and of the limits to economic growth. But no. The gravest threat to global security - our rapacious attitude to the earth's resources - is once again whipped up with talk of "market principles, open trade and economic growth".

Jesse Norman

Senior fellow at Policy Exchange

One might have thought the G20 summit a good moment for some straight talk from the Prime Minister. Instead, the political wind machine was cranked up to full blast. The summit would be a second Bretton Woods. Gordon Brown would forge a new global consensus on co-ordinated intervention to stimulate growth (while, of course, leading reforms to prevent the banking crisis from ever recurring). Luckily virtually none of this was true, or the summit would have been a hopeless failure. With fiscal measures already widely adopted, the G20 hardly needed Brown's leadership. No surprise that he returned empty-handed.

Labour has moved from despondency to a manic desperation to remain in office. The result is that the ever-fragile concept of truth in politics has wholly been cast aside. Thus the humiliating bank nationalisation has been dressed up as an act of far-seeing economic statesmanship. And a sensible warning from the shadow chancellor that current economic policy puts sterling at risk has been condemned for breaching an irrelevant semi-convention dating from the time of fixed exchange rates.

Alex Brummer

City editor, Daily Mail

There is a golden rule of international financial meetings. The larger the "G" number, in other words the more countries involved, the less likely it is that any worthwhile or binding decisions will be taken. So while it was wholly encouraging that the G20 summit brought a number of emerging market leaders to the top table of finance, including China, Brazil and Russia, there was never any real prospect of the event becoming the new Bretton Woods.

Furthermore, the summit took place in the final days of the lame duck administration of George Bush. Once it became clear Barack Obama was going nowhere near the confab, the event became even more of an irrelevance.

European leaders may like to blame Wall Street and Anglo-Saxon capitalism for the credit crunch and the recession now spreading through the Group of Seven like wildfire, but there is no hope of concerted international action without the new White House and Federal Reserve on board.

Almost all that was agreed could have been decided before the leaders left home. The commitment to reviving the Doha trade round is pure motherhood and apple pie. The prairie populists on Capitol Hill are unlikely to be enthusiastic.

At the core of the proposals was the commitment to use fiscal measures, tax cuts and public spending to kick-start global economies. But despite Gordon Brown's enthusiastic embrace of a new Keynesian big-spending approach - as advocated by Nobel prize-winner Paul Krugman - he neatly forgot to mention that such big-spending ways were only for those countries with a "policy framework conducive to fiscal sustainability". The UK with its ballooning budget deficit, which could hit £100bn or more next year, is clearly in no such position.

It is hard to fathom in what way the G20 was "historic", as the Prime Minister claimed in the Commons. There is little original in a bunch of old ideas designed to remove risk from the financial system and control executive pay. That is what regulators should have done before the banks ploughed into the iceberg.

James Buchan

Author and financial commentator

What is the Financial Stability Forum? What is "mitigating against pro-cyclicality in regulatory policy"? What, if anything, has the G20 summit in Washington on the weekend of the 15 November achieved?

Nothing very much, is the answer to all three questions. In the twilight of a discredited US administration, and with President-elect Barack Obama absent, the meeting was never likely to achieve a great deal or generate excitement in the US. Yet the final declaration, drafted with suspicious ease by the delegations on Saturday night, has something for everybody but not enough of anything to scare the financial horses.

Nicolas Sarkozy, the French president whose idea the whole thing was, gained some support for more institutional government of trade and finance, but no super-gendarme international of the type that has been directing financial traffic in the French imagination since the 17th century. As Jean-Pierre Robin wrote in the Figaro: "Those with fantasies of supranational supervision will need to change therapist." The US, jealous of its commercial sovereignty even when it is going about without its shirt, put paid to those Gallic dreams and also gained some platitudes about free trade.

The new commercial powers, not only Brazil, Russia, India and mainland China but also rich oil producers such as Saudi Arabia, received diplomatic recognition of their deep pockets. "The world's geopolitical structure has a new dimension," the Brazilian president, Luiz Inácio Lula da Silva, said. "There is no logic to making any political and economic decisions without the G20 members - developing countries must be part of the solution to the global financial crisis."

I suspect the winner is Gordon Brown. The next meeting will be held under his presidency in London in April. The Washington ragbag of proposals to reform or tinker with the current system, such as reminding us about the Financial Stability Form and mitigating against that regrettable pro-cyclicality in regulatory policy, appeals to his technical vanity and plays to his technical strengths.

Paul Mason

Economics editor, Newsnight

There was a sense in Washington, despite the throbbing engines and bulletproof glass, of powerlessness. The communiqué was stronger on the causes of the crisis than on co-ordinated solutions. Policymakers are right to stay focused on the near-term dangers: these are country-level debt default, the rising cost of borrowing for non-financial companies, rapid job losses and - via feedback - further destabilisation of the banking system. We are moving into the phase of fiscal stimulus but there are powerful technical arguments that say without "quantitative easing" - that is, printing money to stimulate demand - it doesn't work. The same people who told me it would come to recapitalisation, that the TARP (troubled assets relief programme) would not work, are now saying: nationalise the banks and print money.

Despite the urgency of the focus on near-term dangers, what was obvious at G20 was the lack of vision as to the future growth model of capitalism. The problem was seen as a failure of regulation; the solution a pretty weak brew of re-regulation that will get diluted even more as the lobbyists begin to have influence. But the problem is more fundamental: the growth model based on high debt instead of high wages has failed and will be hard to revive.

Peter Mandelson

Secretary of State for Business

We have been caught in a global whirlwind of extraordinary force.

It has brought with it a fear that has gripped the world economy and taken hold here at home. We are seeing it every day, with fear among consumers that is depressing demand; fear among banks that is inhibiting them from lending; fear among small- and medium-sized businesses that banks are just about to cut off their credit lines. The choice facing us and governments around the world is this: do we act decisively to counter and overcome this fear, or do we become paralysed by it and fail to act?

The government has already shown its willingness to take the bolder course as the first mover in setting about stabilising the banks. What is needed now is action to stimulate the demand essential for recovery. The UK economy, like economies in the rest of the world, needs a shot of adrenalin.

The Bank of England has already made a significant cut to interest rates. This monetary stimulus now needs to be matched by a fiscal stimulus. And because this is a global crisis this is best done if the benefit of the measures taken nationally is maximised by the same measures being taken around the world. That was the message from the international conference in Washington, as governments recognised the need to take the action necessary to stimulate their economies.

People will say, "But you are resorting to borrowing in order to deliver the stimulus that's needed." My answer to that is, what is the alternative? We certainly haven't heard one from the Conservatives.

David Cameron and George Osborne, trapped by their desire to oppose everything the government does, refuse to accept the scale of the challenge the world's economies now face and the prescribed international action. Their stance appears to be, if the rest of the world disagrees with us, it is because the rest of the world is wrong. The result is incoherence and an Opposition at sixes and sevens. One minute this is "do all it takes" and the next it is - as we heard this week - leave the recession to "take its course".

Sitting on our hands watching houses repossessed and businesses go to the wall is certainly not the approach being urged on me by people I have been speaking to up and down the country. They want their government to act to stimulate demand in the economy here and now. With all due prudence, that is what we are going to do.

Diane Coyle

Author and economist

The G20 meeting confirmed a robust and rapid response (by past standards) to recession, even in the US operating under a rump free-market administration. Policymakers around the world have been shaken to see the financial system at the brink of collapse - on their watch.

Yet it is difficult to predict how severe the recession will be. Bank lending to businesses and individuals is virtually frozen. In many (but not all) areas of the economy, activity has come to a halt. The last financial boom and bust, ending in 2001, had surprisingly little impact on jobs and growth, as the financial bubble had become increasingly untethered from anything real. Today's vicious circle of evaporating liquidity is much more serious, but lower interest rates and bigger government deficits will help. The underlying trends are easier to outline. Some challenges are clearly unaltered, such as climate change and our ageing society.

The technological opportunities are still there, too, in communications, the internet and biotechnology. Globalisation will be less driven by finance in future, but it will not be unwound. It would take a generation to turn back the clock on economic linkages, and the cultural impacts are permanent. In fact, the crisis has underlined our interdependence across national borders.

What has changed is the political economy of globalisation. In the triad of efficiency, fairness and freedom which dominates political choice in democracies, fairness will take priority in the years ahead, and the drive for ever greater productivity gains will retreat. The semi-nationalisation of the banks has started to shift the boundary between public and private domains; we will have to think more carefully about how to govern private choices that have big social spillovers. The G20 did not touch on this profound question of governance.

Iain Macwhirter

Political commentator

The G20 was largely a throat-clearing session and was never going to put in place the foundations of a new international financial system. Progress on the stalled Doha trade talks is encouraging but provides no guarantee that protectionism will not raise its head in the coming economic slump.

It is inevitable that countries faced with financial collapse will try to defend their economies by any means possible. Britain is already far down the road of "beggar my neighbour" economics by the "managed" devaluation of the pound, a crude attempt to boost UK industry by lowering the prices of British exports and creating a de facto tariff wall around imports from abroad. It won't work because Britain does not make much of anything any more except debt, and the world has plenty of that already.

But the collapse of the pound will seriously damage what is left of UK financial services. No one in their right minds would put money into the UK economy now, with the property market collapsing, UK banks insolvent and government borrowing likely to reach £100bn in the next 18 months.

Gordon Brown seems to believe that sterling is like the dollar, and that people will buy our dud pounds whatever the likely losses. However, as we are discovering, sterling is not a reserve currency and unlike the US we cannot force other countries to pay our debts. The future for our battered island is likely to be hyperinflation punctuated by appeals to the International Monetary Fund for emergency aid. Forget about spending our way out of recession - the UK government simply lacks the resources to fund the huge borrowing that would be required. Something will have to give. Brown will have cause to regret being so beastly to the Icelanders.

Richard Reeves

Director of Demos

James Carville, the hardened political aide to Bill Clinton, said that if he was reincarnated he'd want to come back as the bond market: "You can intimidate anybody." Right now it seems odd to think of any financial markets threatening anybody. But it is one of the ironies of the current economic situation that the capital markets still have some serious muscle.

Western governments, faced with recession, need to throw a lot of money at their ailing financial institutions - money that can be raised only by selling Treasury debt, mostly to the capital-rich investors of the Far East. For Gordon Brown, this is likely to become a more difficult sell, as Prudence is given the push and the pound takes a nosedive. Even national exchequers invite sceptical scrutiny in this new, nervous world.

The financial crisis is at heart a loss of faith. The word credit derives from the Latin credo - "I believe". When the Titanic of the financial world - in the shape of Lehman Brothers - was allowed to sink, the bonds of trust stretching around the world were snapped. In an instant, everyone stopped believing in each other.

A number of sensible measures should be on the agenda when the G20 reconvenes next year, including legislation to ensure bonuses in financial services are paid on the basis of five-year performance; new "pro-cyclical" provisioning rules requiring finance houses to increase their store of capital in economic upturns; and tougher, independent regulation of the rating agencies whose doe-eyed assessments of banks built on a mountain of paper helped get us in this mess.

There is, however, no quick technical fix for such a dramatic loss of confidence. Trust can be lost in the blink of a market-trader's eye - but it will take years to rebuild.

TEN THINGS THEY ACHIEVED

  • 1 Created a road map aimed at stabilising the world economy and overhauling the banking system with targets for the end of March 2009
  • 2 Advocated Keynesian big-spending
    “fiscal stimulus”
  • 3 Expanded from a small club making world decisions to recognise the importance of the economies of Brazil, Russia, India and China
  • 4 Agreed to reform international finance institutions, including better transparency and supervision of credit ratings agencies
  • 5 Agreed that the Financial Stability Forum should include emerging economies
  • 6 Banks and hedge funds to hold increased levels of capital and cash
  • 7 Recommended “supervisory colleges” for all major cross-border financial institutions
  • 8 Return to the Doha round – trade ministers to meet in Geneva next month
  • 9 Instructed G20 finance ministers to draw up plans and timeline
  • 10 Agreed to meet again, in London next April

. . . AND FIVE THEY DIDN’T

  • 1 Agree a future growth model for capitalism. Instead they reconfirmed their “shared belief in market principles”
  • 2 Agree detailed plans for regulatory reforms of banking
  • 3 Establish a plan of action for achieving the already endangered Millennium Development Goals
  • 4 Set up an international supervisory body with sufficient power to control global markets
  • 5 Halt the run on sterling, which fell sharply against the euro and dollar

Alyssa McDonald

This article first appeared in the 24 November 2008 issue of the New Statesman, How to get us out of this mess

Photo: Getty
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Humanising hell

Our restless conscience and the search for peace.

This essay is based upon the One People Oration I delivered at Westminster Abbey in October 2014. I have made hundreds of speeches in the House of Commons as a Member of Parliament for 25 years, but this was the only one I had given in Westminster Abbey. In its early days, in the early 1300s, Parliament actually sat there, in the Chapter House and then in the Refectory of the Abbey. So as an MP I felt very at home, but there were important differences. 

The Commons is a scene of noisy disagreement, while in the Abbey we were surrounded by a thousand years of reflection and calm. In the Commons I would be cut off mid-flow if I went a minute over my allotted time, but in the Abbey I spoke for as long as I needed to and had some hope the audience might actually have been listening. When I spoke in the House of Commons I was just yards from where my hero William Pitt the Younger (Hague 2005) debated with Fox and Burke and Sheridan, but he was actually buried in the Abbey, with his father, in what I believe is the only grave in our country to contain two prime ministers.

People often comment that politicians are becoming younger, but Pitt was prime minister at the age of 24. There has never been a younger occupant of Number 10 before or since, and I doubt there will ever be one again or one as peculiarly gifted as a parliamentary orator. Pitt was prime minister for 18 years and 11 months, and for half that time Britain was at war with France and frequently at risk of invasion.

Another hero of mine, William Wilberforce (Hague 2008), is also buried in the Abbey, thanks to his family and friends countermanding his wish to be buried elsewhere. His house, Number 4 Palace Yard, stood just over the wall and was by every account a veritable pandemonium of books, pets, visitors and hapless servants he never had the heart to let go. From amid that ferment of ideas and activity he spent 20 years converting the people and entire political establishment of Britain to the cause of abolition. Year after year he moved motions in the House of Commons that were defeated. But in 1807, two decades after he began, he finally succeeded in turning our country from a slave-trading nation into one that bullied, harassed and bribed other countries into giving up their own detestable traffic in humans. And he did this without ever holding any office in any government.

Although I am not an intensely religious person, in writing my book on Wilberforce I came to admire the unquenchable determination to succeed in a cause that religion – in his case evangelical Christianity – inspired in him. Because he believed he was accounting to God for how he spent his time, he actually recorded what he did with it. His papers include tables detailing each quarter hour of the day. One typical entry describes seven and a half hours of Commons business, eight and a quarter hours in bed, five and a half hours of ‘requisite company &c visits &c’, three‑quarters of an hour of serious reading and meditation, 15 minutes unaccounted for or dressing and one hour described as ‘squandered’.

While few in his age had his gift with words and his obsessive drive, Wilberforce was not alone in being inspired by his faith. He was part of the Clapham sect, a small group of politicians, lawyers, merchants, churchmen and bankers based around Clapham Common, who were responsible for one of the greatest varieties and volumes of charitable activity ever launched by any group of people in any age.

Their primary goal was the abolition of the slave trade and the founding of Sierra Leone, but on top of this they set up a staggering array of charitable causes: the London Missionary Society; the Society for Bettering the Condition and Increasing the Comforts of the Poor; the Church Missionary Society; the Religious Tract Society; the Society for Promoting the Religious Instruction of Youth; the Society for the Relief of the Industrious Poor; the British National Endeavour for the Orphans of Soldiers and Sailors; the Institution for the Protection of Young Girls; the Society for the Suppression of Vice; the Sunday School Union; the Society for Superceding the Necessity for Climbing Boys in Cleansing Chimneys; the British and Foreign Bible Society; and two with particularly wonderful names: The Asylum House of Refuge for the Reception of Orphaned Girls the Settlements of whose Parents Cannot be Found and, finally, the Friendly Female Society, for the Relief of Poor, Infirm, Aged Widows, and Single Women of Good Character, Who Have Seen Better Days. And we think we live in an age of activism.

***

I know that for many people today religious faith of all kinds remains a great inspiration and channel for charity and altruism. And whatever faith or creed we live by, inherent in our democracy is the idea that our freedoms and rights are universal. Oppression or conflict or poverty or injustice anywhere in the world has stirred our consciences, as individuals and collectively, throughout our history. I want to argue that maintaining and building on that national tradition is absolutely vital in the twenty-first century, both as a moral obligation and in order to prevent wars at a time of growing international instability.

The year 2014, when I delivered my lecture in Westminster Abbey, saw us marking 100 years since the First World War, in which so many of our countrymen perished because conflict was not averted. Remembering that dreadful conflict should inspire us to maintain our restless conscience as a nation and be determined to do whatever we can to improve the condition of humanity. We should have faith – in the broadest sense – in our ideas and our ideals as a country, and in our ability to have a positive impact on the development of other nations and the future of our world.

One of the most moving sights I have seen in some time was the sea of poppies encircling the Tower of London, commemorating each and every British and Commonwealth military fatality in the First World War. It was a silent exhortation to remember, to be grateful for what we have and to learn the lessons of those times when peace had to be restored at so great a price to humanity. So too is the revered Grave of the Unknown Warrior in Westminster Abbey, ‘buried among Kings’, as his gravestone says, as one of the many who ‘gave the most that man can give, life itself, for God, for King and Country, for Loved Ones and Empire, for the Sacred Cause of Justice and the Freedom of the World’. The remains of 15 British soldiers from the War were reburied in Belgium in October 2014, 100 years after they were killed in battle, reminding us that we are still counting the cost of that terrible conflagration.

As Foreign Secretary, for four years I occupied the office used by Sir Edward Grey, with its windows overlooking Horseguards and St James’s Park. Standing at those windows, as he contemplated the catastrophe about to engulf the world, he famously said, ‘the lamps are going out all over Europe; we shall not see them lit again in our lifetime’. The failure of diplomacy on the eve of the War ushered in greater suffering than Grey and his contemporaries could ever have imagined: war on an industrial scale, ‘the butchery of the unknown by the unseen’, in the words of one war correspondent, in which 10 million soldiers died on all sides, 20 million were severely wounded and eight million were permanently disabled; in which appalling massacres, rapes and other atrocities were committed against thousands of civilians and millions of refugees were created; and which was all to be followed by the Second World War, the massacres in Poland, the gas chambers and extermination camps of the Holocaust, pogroms in the Soviet Union and the slaughter of war and revolution in China.

It is tempting to look back on the horrors and evils of the past and to think that these things could not happen again. It would be comforting to imagine that we have reached such a level of education and enlightenment that ideologies like Nazism, Fascism and Communism that led to mass slaughter, and the nationalism that leads states to attack their neighbours or groups within states to massacre their fellow citizens, have all seen an end. Sadly, I believe this is an illusion.

There is an additional illusion that sometimes takes hold, as it did before the First World War, that a permanent peace has arrived. Then, Europe had enjoyed 99 years without widespread war. The Great Powers had found a way back from the brink of conflict several times, and Grey and his colleagues can be forgiven for thinking that crises would always be resolved by diplomacy, when in fact they were on the edge of the two greatest cataclysms in history.

History shows that while circumstances change, human nature is immutable. However educated, advanced or technologically skilled we become, we are still highly prone to errors of judgement, to greed and thus to conflict. There is no irreversible progress towards democracy, human rights and greater freedoms just as there is unlikely to be any such thing as a state of permanent peace. Unless each generation acts to preserve the gains it inherits and to build upon them for the future, then peace, democracy and freedom can easily be eroded, and conflict can readily break out.

***

It is true that there is more education, welfare, charitable endeavour and kindness in our world than ever before, that we have reached extraordinary diplomatic milestones like the Nuclear Non-Proliferation Treaty and that we have a United Nations (UN) system carrying out responsibilities from peacekeeping to the protection of our environment. We should never lose faith in the positive side of human nature and always retain our optimism and belief in our ability to shape our destiny. But my argument is that it is also true that the capacity of human beings to inflict unspeakable violence upon others, of ideologies that are pure evil to rise up or for states that are badly led to wade into new forms of conflict are all as present as ever.

We often read about massacres as if such barbaric things are only to be found in the pages of history. But the short span of our own lifetimes tells a different story, from Europe to the Middle East, to Africa and Asia. Only in 1995, in Europe, 8000 men and boys were massacred in Srebrenica in a single week. Over five million people have been killed in the Congo in the two decades up to 2014.

In April 2014, when I attended the 20th anniversary of the Rwandan massacres, I and the other international representatives were standing where nearly a third of a million people are buried in a single grave, a third of the million women, men and children slain in cold blood within 100 days. Also in 2014, two of Pol Pot’s henchmen, part of the Khmer Rouge regime that killed more than a million people, were convicted and given life sentences. In Iraq and Syria, in a perversion of religion, ISIL (Islamic State of Iraq and the Levant) is currently terrorizing communities with beheadings and crucifixions. And think of the barrel bombs that have rained down on schools in Syria from the Assad regime and the pitiless desperation to hold on to power needed to produce such utter inhumanity.

Aggressive ideology, despotism and fanaticism live on, despite all our other advances and achievements. This is the human condition. Our optimism and faith in human nature will always have to contend with this harsh truth, at the same time as being essential to overcoming such evils. That is why it is so important for us to have a strong sense of history so that we never lose sight of how fragile peace and security can be. And so we understand that diplomacy and the peaceful resolution of conflicts is not an abstract concept but our greatest responsibility.

In our information-rich, media-saturated world, history can be caricatured as a luxury, not least for those who have their hands full running the country. But I could not imagine having been Foreign Secretary without drawing on the advice of the Foreign Office historians, who were able to offer historical precedents for every conceivable revolution, insurgency, treaty or crisis, and who produced maps and papers that shed light on the most intractable of modern problems. It is as important to consult the lessons of history in foreign policy as it is to seek the advice of our embassies, our intelligence agencies, our military and our allies. History is not set in stone and is open to endless reinterpretation. But the habit of deep and searching thought rooted in history must be cultivated: not to paralyse us or make us excessively pessimistic, but to help us make sound decisions and guide our actions.

It remains as true today as it was when Edmund Burke first expressed it that the only thing necessary for evil to triumph is for good men and women to do nothing. We cannot in our generation coast along or think it is not our responsibility or that it is too difficult to tackle conflict and injustice that bring misery to millions. However pressing the crises of the day, we have to address the fundamental conditions that lead to armed conflict and reduce the human suffering it causes. This means not only maintaining Britain’s global role – living up to our responsibilities, protecting our interests internationally and being able to project military power where necessary – but also consciously encouraging and developing the ideas, concepts and strategies needed to address poverty, conflict and injustice.

All our advances start with an idea. Powerful ideas can then become unstoppable movements as indeed the abolition of the slave trade did in the eighteenth century. For that to happen governments have to adopt the best of these ideas, and leaders have to be prepared to be open and radical.

***

The title of my essay is taken from a remark by Admiral John Fisher, First Sea Lord in the early nineteenth century and commander of the Royal Navy at the start of the First World War. In 1899, he was sent as Britain’s representative to the first Hague Peace Conference, called by Russia, to discuss the growing arms race and place curbs on the use of certain weapons in war. As these proposals were discussed at the negotiating table, he is said to have remarked with some passion that one could sooner talk of ‘humanising hell’ than of ‘humanising war’. While he was, of course, right about the hell of war, in actual fact the traumatic experience of conflict and great idealism have often gone together. It has frequently been the very experience of war that has spurred mankind’s greatest advances in international relations, based on ideas that were radical when first presented. 

When Henry Dunant observed the agonizing deaths of thousands of injured men at the battle of Solferino in 1859, his outrage and activism led to the 1864 Geneva Convention, the founding text of contemporary international humanitarian law, which laid the foundation for the treatment of prisoners in war. After the First World War, there was a vast and intensive period of institution building, leading to the League of Nations, International Labour Organization, the prohibition on use of chemical weapons and the creation of the High Commissioner for Refugees to find a way of returning millions of European refugees to their homes, which supports over 50 million refugees and displaced people worldwide today.

While the Second World War was raging, Roosevelt and Churchill spent hours discussing the creation of a new international body to prevent conflict in the future, which led to the United Nations itself, the Security Council and the Universal Declaration of Human Rights. More recently, in our lifetime, the outrage at atrocities in Cambodia, Rwanda, Liberia and Bosnia led to the creation of the International Criminal Court and the concept of the Responsibility to Protect. Since 1990 our country has played a leading role in securing international bans on the use of cluster munitions and landmines, and I was proud to sign on Britain’s behalf the ratification of the International Arms Trade Treaty, the culmination of ten years of advocacy begun here in Britain.

The humanising of the hell of war is a continual process. While our goal must always be to avert conflict in the first place, except as a last resort as provided in the UN charter, it is also essential to establish norms of behaviour about what is unacceptable even in times of war. This is vital so that if conflict breaks out despite our best efforts, governments feel restrained by the threat of accountability for any crimes that are committed, we have mechanisms to protect civilians and peace agreements take account of the need for reconciliation and the punishment of crimes against humanity. The crucial point is that while the international bodies we have are the result of diplomacy, they do not simply arise on their own. They are the product of ideas generated by individuals, groups or governments refusing to accept the status quo, such that then, with enough momentum, public support and political commitment became reality.

I think of this ‘restless conscience’, as I call it, as an enduring and admirable British characteristic. Our nongovernmental organizations (NGOs), lawyers, academics and Crown servants have had an extraordinary impact internationally. In my time in the Foreign Office I found our diplomats a powerful part of this tradition, from their work on the abolition of the death penalty, to improving the lot of lesbian, gay, bisexual and transgender (LGBT) communities worldwide, to helping negotiations as far away as the now‑successful Mindanao Peace Process in the Philippines. This is part of our country’s distinctive contribution to the world, and it involves the power of our ideas as much as the skill of our diplomats. We must always cherish and encourage that flow of ideas and idealism and those rivers of soft power and influence that form such a large part of our role in the world.

It is also true that diplomatic negotiations for peace do not simply arise automatically. They require extraordinary effort by individuals. US former Secretary of State, John Kerry, for example, deserves praise for his tireless work on the Israeli–Palestinian conflict. He chose to devote weeks on end trying to restart and conclude those negotiations, rather than taking the easy route of not attempting such a difficult task. Individuals and the choices they make have an immense impact. Sometimes the individual is someone in high office, like William Pitt, who did his utmost in the early 1790s to avoid war with France and whose State Paper of 1805 was the basis for European peace for most of the nineteenth century. Or it is someone like Wilberforce, who was never a government minister, but whose ideas and energy brought relief, an end of suffering and ultimately freedom for millions of people.

Choices are motivated differently. The coalition to end the British slave trade was driven not just by moral considerations, but also by political and economic factors. Adam Smith argued against slavery because he saw it as an inefficient allocation of resources. British naval supremacy in the world meant that in simple political terms, abolition was possible because we had the diplomatic and military muscle to enforce it. And Wilberforce was outraged that slaves had no opportunity to embrace Christianity, so their souls were being lost. So his key argument against the trade was neither economic nor political, it was religious. It is inevitable that in this way governments, like individuals, are motivated by a number of different factors. But we must pursue the issues today that bring together the moral interest and the national interest, using the combination of powerful ideas, our strong institutions and our global role.

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We should be proud that, so far, our country has kept its promise to spend 0.7 per cent of gross domestic product (GDP) on international development, not just because it is morally right, but also because it is profoundly in our national interest to help other nations lift their citizens out of poverty. We have to continue to lead global efforts to stop the illegal wildlife trade, which destroys the natural heritage of African nations, undermines economic development and creates instability. It is vital that we promote a rules-based international system, because it nourishes the commerce, trade and stability that are the lifeblood of our own economy as well as strengthening human rights internationally. And it is essential that we support political reform, civil society, women’s rights and economic progress in the Middle East, because it is vital to our long-term security that that region becomes more free, more stable and more prosperous.

The pursuit of policies that bring stability in the world, and the moral authority for them, are inseparable. Any idea that we should retrench, withdraw or turn away from these issues is misguided and wrong for two reasons. First, the world is becoming systemically less stable. This is due to many different factors: the dispersal of power amongst a wider group of nations, many of whom do not fully share our values and our objectives in foreign policy; the diffusion of power away from governments, accelerated by technology; the globalization of ideas and ability of people to organize themselves into leaderless movements and spread ideas around the world within minutes; our interconnectedness, a boon for development but also a major vulnerability to threats, from terrorism and cyber crime to the spread of diseases like Ebola; the growing global middle class, which is driving demand for greater accountability and more freedom within states designed to suppress such instincts; and the rise of religious intolerance in the Middle East.

Global institutions are struggling to deal with these trends. It is not enough to ensure there is no conflict on our own continent, although sadly the crisis in Ukraine has shown, once again, that even Europe is not immune. Conflict anywhere in the world affects us through refugee flows, the crimes and terrorism that conflict fuels and the billions of pounds needed in humanitarian assistance, so we have to address these issues.

Second, the pursuit of sound development, inclusive politics and the rule of law are essential to our moral standing in the world, which is in turn an important factor in our international influence. As I pointed out in 2006, the US and UK suffered a loss of moral authority as a result of aspects of the War on Terror, which affected the standing of our foreign policy and the willingness of other countries to work with us, and which both President Obama’s administration and our own government worked hard to address. We are strongest when we act with moral authority, and that means being the strongest champions of our values.

Thus, neither as a matter of wise policy nor as a matter of conscience can Britain ever afford to turn aside from a global role. We have to continue to be restless advocates for improving the condition of humanity. This means continuing to forge new alliances, reforming the UN and other global institutions and enforcing the rules that govern international relations. But that will never be enough by itself, so we also have to retain the ambition to influence not just the resolutions that are passed and the treaties that are signed up to, but also the beliefs in the world about what is acceptable and what is not.

A powerful example of an issue on which we need to apply such leadership is the use of rape and sexual violence as weapons of war. I have been surprised by how deeply engrained and passive attitudes to this subject often are. Because history is full of accounts of the mass abuse of women and captives, and because there is so much domestic violence in all societies, it is a widely held view that violence against women and girls is inevitable in peacetime and in conflict.

But when we see ISIL foreign fighters in Iraq and Syria selling women as slaves and glorifying rape and sexual slavery; when we hear of refugees, who have already lost everything, being raped in camps for want of basic protections; when we see leaders exhorting their fighters to go out and rape their opponents, specifically to inflict terror, to make women pregnant, to force people to flee their homes and to destroy their families and communities; or peace agreements giving amnesty to men who have ordered and carried out rape or deliberately turned a blind eye to it; or soldiers – and even peacekeepers – committing rape due to lack of discipline, proper training, no accountability and a culture that treats women as the spoils of war, a commodity to be exploited with impunity, then we are clearly dealing with injustice on a scale that is simply intolerable, as well as damaging to the stability of those countries and the peace of the wider world.

It is often said to me that without war there would be no warzone rape, as if that is the only way to address the problem. While of course our goal is always to prevent conflict, we cannot simply consign millions of women, men, girls and boys to the suffering of rape while we seek a way to put an end to all conflict, since, as I have argued, this goal is one we should always strive for but may often not attain.

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We have shown that we can put restraints on the way war is conducted. We have put beyond the pale the use of poison gas or torture and devised the Arms Trade Treaty for the trade in illegal weapons. It is time to address this aspect of conflict and to treat sexual violence as an issue of global peace and security. The biggest obstacle we face in this campaign is the idea you cannot do anything about it – that you cannot humanise hell, that there is nothing we can do to end warzone rape. But there is hope, and we must dispel this pessimism. Over the last two years, working with NGOs, the UN and faith groups, we have brought the weight and influence of Britain to bear globally as no country ever has done before on this subject.

Over 150 countries have joined our campaign and endorsed a global declaration of commitment to end sexual violence in conflict. We brought together over 120 governments and thousands of people at a Global Summit in London in June 2014, the first of its kind. And in countries like the Democratic Republic of Congo, South Sudan and Colombia we are seeing signs of governments being prepared to address this issue by passing laws and reforming their militaries.

What would it say about our commitment to human rights in our own society if we knew about such abuses but did nothing about them? And how could we be at the forefront of preventing conflict in the world if we did not act to prevent something that causes conflict in the future? Sexual violence is often designed to make peace impossible to achieve and create the bitterness and incentive for future conflict. Dealing with it is not a luxury to be added on, it is an integral part of conflict prevention, a crucial part of breaking a cycle of war. And it has to go hand in hand with seeking the full political, social and economic empowerment of women everywhere, the greatest strategic prize of all for our century.

In 2014 we commemorated those who died in the First World War and their suffering. There is no more fitting thing we can do for the sake of that memory than to face up to the hell of conflict in our lifetimes. We have never had to mobilize our population to fight in the way their generation did, and so we have been spared their painful burdens. But how much more incumbent does that make it on all of us to fight with the peaceful tools at our disposal on behalf of those who are denied, through no fault of their own, the security we consider our birthright.

Just as in Wilberforce’s day, it will always be necessary for Britain to be at the forefront of efforts to improve the condition of humanity. The search for peace and an end to conflict requires powerful ideas and the relentless defence of our values, as much it does negotiations and summits between nations. We could be heading for such turbulent times that it will be easy for some people to say we should not bother with development or tackling sexual violence in conflict or other such issues. There will always be the pressing crisis of the day that risks drowning out such long‑term causes. But, in fact, addressing these issues is crucial to overcoming crises now and in the future – and it will be an increasingly important part of our moral authority and standing in the world that we are seen to do this.

Just because there are economic crises and major social changes does not mean we or our partners can squander any day or any year in producing the ideas as well as the laws that prevent conflict and deal with some of the greatest scourges of the twenty-first century, and we must do so with confidence: for it remains the case that free and democratic societies are the only places where the ideas and the moral force we need can be found. Our times call for a renewal of that effort – for just and equitable solutions to conflict, the driving down of global inequalities and the confronting of injustices.

Every day we have to start again: there is not going to be a day in our lifetimes when we can wake up and say this work is complete. We have to overcome the sense of helplessness that says that vast problems cannot be tackled. We have to awaken the conscience of nations and stir the actions of governments. In an age of mass communication this is a task for every one of us. Whether we are in government, are diplomats, journalists, members of the armed forces, members of the public, students, faith groups or civil servants, every one of us is part of that effort.

In Britain, our restless conscience should never allow us to withdraw behind our fortifications and turn away from the world but should always inspire us to strive for peace and security, to maintain our responsibilities, seek new ways of addressing the worst aspects of human behaviour and live up to our greatest traditions.

This essay is taken from The Moral Heart of Public Service, edited by Claire Foster-Gilbert and published by Jessica Kingsley Publishers, priced £15.99, on 21 June 2017.

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