The Hon. Alexander Downer, MP

crest

Speech

at the 25th Annual Menzies Lecture
Parliament House, Melbourne, 10 October 2002

Liberalism and the Challenges of Building an Open Society

INTRODUCTION

Nearly 58 years ago, in December 1944, Sir Robert Menzies formally founded the Liberal Party.

It was a time of extremes.

It was a period of ultra nationalism, it was an age when Soviet ideology was spreading its roots, and - of course - it was in the midst of the most destructive conflict the world has yet known.

It also was a fight for the very existence of liberalism.

As Menzies said in 1944 (Afternoon Light p289):

"I see the individual and his encouragement and recognition as the prime motive force for the building of a better world.

Socialism means high costs, inefficiency, the constant intrusion of political considerations, the damping down of enterprise, the overlordship of routine.

None of these elements can produce progress, and without progress, security will turn out to be a delusion."

We should reflect on those words "without progress, security will turn out to be a delusion."

For security and the fight for liberalism are very much part of the national and international political struggle today.

Today, the battles are not as easily defined and delineated as those during the Second World War and the subsequent Cold War.

Today, the fight is about the reach of liberalism and our capacity to live up to its values at a time when it is under threat on a myriad of fronts from poverty, authoritarianism, nationalism, extremism and terrorism.

Since its evolution over 300 years ago, liberalism has been engaged in an epic struggle against authoritarianism of the left and the right.

The ideas of Locke, Kant and Adam Smith have been equally antipathetic to the absolute monarch, the ultra-nationalist, the religious extremist and the authoritarian leftist.

These forces shared a common cause in their opposition to liberalism.

Liberalism was a threat to all of them because it encouraged the contestability of ideas, and the flourishing of individual freedom.

Liberalism was then - and still is - the natural enemy of the undemocratic, the extreme and the tyrannical.

The end of the Cold War was a watershed in the advance of liberal ideas.

But the battle is not yet won.

Today, there are still two great threats to liberalism.

First, there is the external threat. 

Extremism, whether religious or national, still poses a threat to the security of many democratic societies. 

It may not threaten their existence but, as we have witnessed in the last year, it can have a profound impact on their operation, and on the lives of families and communities.

I think that the threat posed by extremism is growing rather than diminishing. 

Moreover, extremism has brought misery to those who actually live under it.

Citizens in Iraq, Afghanistan under the Taliban, North Korea, Black South Africa under White rule and Zimbabwe under Mugabe, have all lived through both an economic and political hell. 

It is fashionable to say that democracy has triumphed in the battle of competing ideologies.

Autocratic extremism, however, is an ideology and its roots are still strong in many parts of the world.

Francis Fukuyama's original thesis was wrong.

We have not reached the 'end of history'. 

Second, liberalism faces challenges from within.

There is a natural battle within liberal societies - between those who would seek greater state control, and those who seek greater individual and intellectual freedom.

State control of the economy, openness to capital, openness of labor markets, protectionism, the very fact of participating in a global economy – all are substantial debates in our society.

The essence of liberalism is to argue for the open society, both as an end in itself, and as a means to providing individuals with the opportunity to maximise their own fulfillment.

So my thesis tonight is simple: the battle for liberalism is as relevant and worthwhile today as at it ever was.

 

I believe in the open society: a society not afraid to change, open internationally and confident in its embrace of the future.

But the open society is not a given, it has to be fought for, protected and nurtured against the instincts to retreat into a smaller, less open world.

And while there are key challenges which liberalism faces, it offers the best opportunity for individuals to advance, prosper and attain self-fulfillment.

In that context, I believe there are three great pillars of liberalism:

  • Economic Freedom
  • Political Freedom; and
  • Security that makes possible the expression of those freedoms 

As we set out on a new century, it is important to understand the generational challenges facing each of these three pillars - both domestically and internationally. 

I turn now to the first of the pillars of liberalism - economic freedom.

1. ECONOMIC FREEDOM

In essence it is the capacity to determine the true and fair value of goods, services, labour and capital, through open domestic and global markets.

In doing so, the goal is to empower individuals to lead their own lives by removing impediments and providing opportunities. 

It is both a positive and negative freedom. 

It is the freedom to pursue one's own development, but it is also the freedom from basic wants of food, clothing and shelter.

I have witnessed first hand, in oppressive States like North Korea and Burma, that the price of a closed economy is always borne by the people.

One simple fact sets out the meaning of economic progress. 

At our Federation, on the 1st of January 1901, average life expectancy in Australia was 57 years of age.

A mere 100 years later, an Australian child born on 1st January 2001 can be expected to live to 79 years.

A 39% increase in life expectancy in one century was not surpassed in any previous century on record.

In that context, human society has not descended from an ideal state. 

It has emerged, slowly and painfully, from a state in which the vast bulk of people throughout the vast bulk of human history have eked out a living.

Today in much of the developed world we have new drugs, the democratisation of wealth, safer working conditions, radical new medical care, improved nutrition, and water sanitation at a level with no previous parallel.

All have been significantly advanced because of market driven economic growth.

Growth is also possible under autarkic conditions, but the sustained growth models of the last century have occurred under open economies.

The closed economies of Eastern Europe, parts of Asia and Latin America not only failed to match the performance of open economies, but in most cases their models have been abandoned.

The adoption of open investment, trade, ownership, and labor markets in much of East Asia over the last three decades has lifted more than 400 million people out of poverty.

These are not perfect liberal societies, but liberal economic policies have had a profound human impact.

I believe that if we want to continue openness and growth - here in Australia and overseas - there are four key economic policies we must pursue at a domestic level, and three key policies at the international level.

On the domestic front the engines of an open economy are:

  • Sound fiscal and monetary policy;
  • More flexible domestic product and labor markets;
  • Healthy markets, including good corporate governance; and
  • Reduced government ownership of businesses.

On the international front, I believe the grand systemic challenges are:

  • Securing trade liberalization;
  • Promoting development; and
  • Opening capital markets

1.a The Domestic Economic Agenda

I turn first to the domestic economic agenda.

The four principles for the future that I have outlined build on the core domestic economic policies that we have pursued in Government since 1996. 

The result so far has been that Australia has led the developed world in economic growth for the past five years.

We have maintained economic growth of 4.0 percent compared with an OECD average of 2.9 percent, and a 40 year Australian average of 3.7 percent. This excellent result has been achieved through some very challenging times including the Asian economic crisis.

Sound fiscal and monetary policy

The first element of the domestic agenda is a sound fiscal and monetary policy.

Sound fiscal and monetary policy means two things. 

It means, on balance, spending no more than you earn and reducing the cost of owning money by limiting government borrowing.

In the five years prior to the 1996-7 federal budget, government payments exceeded government receipts by a cumulative $69 billion.

In the five years that followed, this trend was reversed and receipts exceeded payments by a cumulative $22 billion.

By the end of this financial year, we will have retired $61 billion in Commonwealth government debt, taking pressure off interest rates, supporting domestic investment, and improving budget flexibility by reducing public debt interest payments.

Our debt to GDP ratio is expected to have fallen from 19.1% to 4.6% in this same period – one of the lowest ratios among developed countries.

As a result of this discipline and reform of the tax system, Australia's unemployment rate has dropped to 6.2 percent, the lowest level in a quarter century, over a million jobs have been created since 1996 and interest rates are around their lowest in an entire generation.

These reforms translate to better lives for families, a better lifestyle with greater opportunity for people from Mount Barker, to Frankston, to Parramatta.

Perfect - no, but for most people, much better.

Flexible domestic product and labor markets

The second great domestic reform for the future is to maintain our relatively high ratio of productivity. 

Productivity growth has increased from 1.2 percent in the late 1980's to 2.6 percent today.

This has been the result of not just the improved investment climate, but also our labor market and - in particular - waterfront reforms. 

It is enough to say that despite being told that waterfront crane rates were best practice in 1997, waterfront productivity has almost doubled since, from 16 to 27 lifts per hour.

Our next great productivity challenge is to ensure that conditions are not only healthy for capital investment, but that destructive work practices such as industry wide strikes, the closed shop, and constraints on small business employment, continue to be addressed.

This is particularly the case because, as the percentage of our population who are working declines, we will have to ensure greater productivity growth in order to maintain economic growth.

Promotion of healthy markets including good corporate governance

As important as productivity are healthy markets. 

Healthy markets help direct capital to the most productive – and therefore the most profitable and growth inducing - activities.

It is a regrettable fact of life that in a liberal economy some companies will fail. 

Indeed, of the Fortune 500 companies listed in 1956, only 65 remain in existence today.

Unfortunate as company closures may be - and Ansett's closure last year was particularly sad – we shouldn't prop up inefficient industries, and we shouldn't let individual companies distort resource allocation by hiding the true state of their economic health.

That is why the next decade demands a strong Australian Competition and Consumer Commission (ACCC), rather than a weak one.

The role of the ACCC is critical in preventing monopolistic and oligopolistic rent seekers from subverting consumer interests.

Indeed, if consumer confidence is going to be maintained in the propriety and effectiveness of the market, the market needs to be operating in an efficient and fair way.

This is where good corporate governance is critical.

Of course, healthy markets also mean that we should not be distorting capital allocation by creating false and unsustainable tariff walls and industry subsidies.

We have continued to simplify and reduce tariffs, to the point where our average tariff rate is 4 percent. 

The effective rate of assistance for manufacturing has fallen from 16 per cent in 1989-90 to 5 per cent today.

Our assistance to agriculture, at 0.3 percent of GDP, is the lowest in the developed world. Although, the Government has an important role to play assisting in times of crisis such as flooding and drought.

Every time we spend money on an unproductive enterprise it has a net cost to the economy and ultimately leads to the destruction of wealth in our society.

Reduced Government ownership

The fourth part of the liberal economic framework for Australia is the question of reducing government ownership of enterprises that could naturally be conducted by the private sector.

Perhaps most important amongst these is the question of Telstra's future.

I am an unashamed supporter of fully privatizing Telstra once arrangements are in place to deliver adequate services to all Australians. 

My support is not just because of the capital windfall it would bring to the Commonwealth, but because Telstra could then raise the capital it requires to truly invest in Australia's broadband future. 

At present it simply cannot invest without further raising debt, and its equity remains locked away as the nation's most under-utilised asset.

Full privatisation will also remove any potential conflict between the Commonwealth being both the industry regulator and a shareholder in the largest telecommunications carrier.

In short, I believe that Government's role is to create the environment for commercial exchange.

However, government does have a key role in ensuring that there is sufficient investment in collective goods such as health, education and the environment, both as a means to longer term economic prosperity but also as deeply valuable social ends in themselves.

In such an environment we also have a responsibility to assist those who are unable to effectively participate in - or benefit from - a modern open economy.

For those individuals who have completed their working life, or who are unable to enter the workforce, liberalism recognises a key element in social cohesion – that is, a society free from poverty.

1b International Promotion of Economic Freedoms

The very same principles of domestic economic liberalism when applied globally have precisely the same impact: they empower individuals and promote prosperity.

Trade liberalisation

Trade liberalisation is the first of the core policies for international economic development, in so far as that opening markets is the principal means by which the economic freedoms of liberalism can be extended to the greatest number.

Today, there is no greater challenge for government ministers such as myself than to explain to an often sceptical audience that trade and economic liberalisation is the simplest and most direct path to continued economic prosperity – and therefore also to our security.

Indeed, the contribution of trade to the Australian economy has been growing steadily with exports and imports increasing as a proportion of GDP in the 1990's from around 30% to 40%.  The result is that 20% of all Australian jobs are now created by exports.

A further 10% increase in exports and it can create up to 70,000 new Australian jobs.

If both Australia and the international community are going to develop further, they must capitalise on the three key trends in international trade.

These generational shifts are deepening multilateralism, emerging bilateralism, and new opportunities for the developing world to participate in the international economy.

 

Multilateral outcomes have the potential to produce the best result for free trade.

That is why Australia strongly supports the Doha round of global trade negotiations and why we are chair of the Cairns Group of agricultural exporters in the WTO.

In the absence of effective multilateral outcomes it is important to take out insurance in the form of bilateral agreements.

That is why we are pursuing bilateral Free Trade Agreements with Singapore, Thailand and the United States.

The United States – which accounts for a third of global GDP on an exchange rate basis - is entering into preferential trade agreements with a series of partners, including a prospective Free Trade Area of the Americas.

Australia must more closely integrate with the world's most dynamic economy and in doing so avoid deterioration in our position compared with America's new partners in free trade.

An FTA with the United States is a real opportunity to put our economic relationship on a parallel footing with our political relationship, which is manifested so clearly in the ANZUS alliance.

Indeed, Menzies proudly described ANZUS as one of the major achievements of his administration and "the most significant feature of Australia's modern foreign policy" (p52 The Measure of the Years).

While we know that free trade and open economies are in our national interest, this has also become self evident to developing countries. 

An Oxfam study of 73 developing countries found that those increasing their openness to trade since 1980 grew on average 10% faster than those that did not.

For example, China's entry into the WTO and the growth of its market economy is delivering direct economic benefits for its people.

In line with its WTO commitments, China reduced as of January 1 this year, its average tariff rates on general commodities from 15.5% to 12% and has agreed to immediately eliminate all export subsidies.

It is no surprise that with China's gradual economic liberalisation it has jumped from being Australia's 9th largest partner in merchandise trade in 1991-2 to our third in 2001-2, with trade totalling $19 billion.

The recent successful bid by the Australian led consortium to supply up to $25 billion of LNG to China will deliver immediate financial rewards and is also strategically important for energy security in East Asia and regional economic integration.

Trade leads directly to the question of development.

Development

International aid, so favoured by non-Government organizations as the principal vehicle for development, can only help at the margins.

Aid, in itself, is no solution to the economic problems of the developing world.

At nearly $90 billion a year, official development assistance is a fraction of the $3.6 trillion in export earnings and the $360 billion in foreign direct investment which flow to developing countries annually.

It is trade and investment, not aid, that is the real driver of development: by providing access to a broader range of goods, services and technologies; by accelerating the flow of private capital and foreign exchange reserves; and by acting as an employment multiplier upon which the local work force develop an entrepreneurial skill base.

The World Bank has estimated that world incomes would increase by at least $250 billion if agricultural protection were abolished with both rich and poor countries benefiting from increased trade.

The relationship between trade, protection and development was a point recognised by former British Prime Minister Margaret Thatcher, in her 1981 Menzies address, when she said "too often the politicians who propose more aid are the same as those who, by calling for more protection, are proposing less trade".

Margaret Thatcher recognised then what we know now, that the freedom to trade was critical to developing countries escaping the cycle of aid dependency.

This is not to suggest that aid has no role. It does.

In particular, it can help improve the quality of governance and provide humanitarian relief, but its use as a tool for development is too often exaggerated.

Opening capital markets

Like trade in goods and services, openness to capital flows is vital to economic growth.

However, during 2001 foreign direct investment flows declined over 50 percent. Most of this decline was in developed countries, but FDI flows also declined, by an average 14.9 percent in developing countries.

The challenge is to re-establish business confidence and re-create the momentum for global capital flows which underpinned much of the success of many developing countries in the 1980s and 1990s.

The lessons of the Asian financial crisis of 1997 – and of the corporate governance crisis of 2002 – is that capital flows can only succeed in the long term where there are credible and transparent regulatory structures and open markets.

2. POLITICAL FREEDOM

Let me now turn to the second pillar of liberalism – political freedom.

It is the freedom of individuals to speak, to think, to believe and to associate – or not to associate - as they see fit.

It is also about the freedom to appoint and dismiss a government freely and fairly through the ballot box.

2.a Domestic Political Freedom

While there may be much debate about both the domestic and international economic agendas, there is a relatively settled compact about the elements of political freedom in Australia.

I believe that there are five core elements to the exercise of political freedom in Australia.

First, the rule of law means that the constitution governs law-making and that our laws in turn govern decision-making by the executive and the judiciary.

In Australia, the rule of law depends upon an effective separation of powers between executive, legislature and the judiciary.

Independence of the judiciary does not mean freedom from criticism.  It does however mean freedom from interference.

Second, it is critical that there is accountability through the ballot box.

In Australia, while there has been little evidence of electoral fraud, I do believe that there is a growing tendency to frustrate the express mandate and agenda of an elected Government by minor parties.

A mandate means that if a Government takes a policy to an election and wins, then it has the right to implement that approach.

Of course minor parties can amend and improve.  But it is a breach of the fundamental democratic precept to frustrate a core platform which the Australian people have endorsed.

In that context I support the 1957 all party recommendations – which, incidentally, included my father and Gough Whitlam amongst the drafters - for reform of section 57 of the Constitution.

Such reform would allow a joint sitting rather than a double dissolution upon legislation having been twice rejected.

Third, an open society demands transparency in government decision-making.

While the role of bodies such as the Auditor-General, and the operation of Freedom of Information legislation are well known, within my own portfolio I have taken three key decisions:

First, at the systemic level we introduced the Joint Standing Committee on Treaties to review and report on every treaty into which Australia wishes to enter.

Second, in 1996 we made available all government intelligence to the Shermann Inquiry into the deaths of five journalists at Balibo, in Timor, twenty years earlier.  It was a significant decision and was, I believe, the beginning of change in Australia's policy towards East Timor.

Finally, I legislated to establish a legal framework, including a system of accountability for the Australian Secret Intelligence Service (ASIS).

The fourth domestic value is that liberalism depends fundamentally on freedom of expression and association.

I welcome the healthy public debate on issues such as Australian involvement in the International Criminal Court and international approaches to Iraq.  It is a sign of a healthy democracy.

However, those exercising their freedom of expression should never make it their objective to prevent others from exercising their freedoms.

For example, the anti-globalisation demonstration in Melbourne in September 2000, was a protest against a meeting of the World Economic Forum.

I participated in that Forum and was trapped for 24 hours in my hotel room.

I recognise that the demonstrators had a legitimate right peacefully to protest but so did the Forum have a right to meet.

The freedom of association means the right both to associate and not to associate.

I personally remain utterly committed to ensuring that workers have the right to freely choose whether or not they wish to be involved in a union.

They have every right to be involved - and they have every right not to be.

The fifth freedom is religious belief, guaranteed under S.116 of the Constitution.

In particular, since September 11, there has been a greater need for all liberals to articulate this principle and to ensure that Australian Muslims are not diminished by false associations with extremism or terrorism.

It serves us well to remember the words of Sir Robert Menzies in his 1942 address "The Forgotten People" when he said "freedom of worship is the victorious enemy of persecution."

The corollary of tolerance is that immigrant groups should not bring with them residual conflicts from times past and places distant. 

I continue to support strongly Australia's expanding immigration program and am proud that my father as the Minister at the time oversaw one of Australia's greatest periods of immigration growth.

During his time as Minister around 600,000 people found a new home in Australia.

However, for a country to respect political freedoms at home is not enough in itself.

We must also promote political liberalism abroad.

2.b Political Freedom Abroad

Internationally, Australia must do what it can to advance appropriate standards of human dignity, justice and freedom.

I believe there are three great human rights challenges for the next generation.

First is the development and advancement of the fundamental norms of human rights.

Second, is an expansion of the key institutions of governance.

Third, is to develop and refine credible means of enforcement, so that the perpetrators of human rights abuses do not go unpunished.

Norms

The fundamental human rights norms find expression in the six core UN human rights treaty instruments - to which Australia is a party.

However, the UN human rights committees are failing in their task to hold states to account for breaches of these norms.

This is why Australia is leading international efforts to restore credibility to the UN human rights treaty body system.

We want to see the human rights committees adhering to their mandates, addressing serious resource issues, and addressing the most egregious international violations.

Governance

The second global human rights challenge is to establish effective and accountable systems of governance.

In some developing countries, human rights are still seen as a luxury to be added on once the economy has been addressed.

However, without proper legal systems, fair electoral processes and genuine democratic institutions, there can be no lasting progress toward sustained development.

That is why in our aid program we have doubled our budget for good governance initiatives and I have advocated, sometimes controversially, bilateral human rights dialogues and training programs with key interlocutors such as China, Vietnam and Burma.

I would be the last to inflate the prospects of turning around the human rights situation in those countries over-night. However, our efforts are making a difference.

Exposing officials to human rights norms and facilitating visits of their judges, police and bureaucrats to our country will pay dividends in the years ahead.

Enforcement

The third challenge is to establish a credible and effective means of enforcing international human rights.

Bit by bit, leaders of governments that suppress human rights are being made to feel uncomfortable, however much they bluster and hide behind sovereignty arguments.

The Saddams and Milosevics of the future are going to grow up in an international environment that will give them pause.

Building on the work of the International Tribunals for the Former Yugoslavia and Rwanda, the International Criminal Court will make an important contribution to shaping this new environment.

The functioning of a permanent, global criminal justice system is both a deterrent to and a means of punishing the most egregious human rights abusers.

I take pride in Australia's role in the Court's gestation and birth, which includes our chairmanship of the 60-nation like-minded group that fought so hard for an effective court.

3. INSTITUTIONS OF LIBERALISM

The third pillar of twenty-first century liberalism is the security that makes the expression of political and economic freedoms possible.

Security is the protection of society from acts of destruction that strike at its infrastructure, individuals and core freedoms.

The lesson of the decade since the end of the Cold War is that there are those that for their own ends and ideologies still seek to strike at the legitimacy of liberal democracy and the spread of individual freedom.

It would be irresponsible as well as a failure of liberalism to ignore these growing security threats and to defer them to a time when those threats were both much greater and more difficult to counter.

In the same way that responsible decision making demands that we make long term but difficult economic decisions, we also fail the next generation if we bequeath them a security nightmare based on inaction today.

We still face an environment influenced by notions of realpolitik.

While a number of ongoing security issues remain unresolved, I believe that over the coming decade the international community will face, in particular, two major challenges.

First, there is the problem of the proliferation of weapons of mass destruction, most significantly into the hands of non-state actors.

Second, is the necessity to take collective responsibility to counter this emerging threat.

Proliferation of Weapons of Mass Destruction (WMD)

I now turn to the first issue of the proliferation of weapons of mass destruction.

This is exemplified by the pre-eminent issue in international affairs today, that of Iraq.

The threat posed by Saddam Hussein's growing arsenal of biological and chemical weapons and potentially nuclear weapons constitutes a litmus test for the international community.

He is a despot with a quantity of these most terrifying weapons, a willingness to develop them further and a proven capacity for using them against both his neighbours and his own people.

If Saddam's stockpile is allowed to grow further, it will send a message that the international community remains unwilling to uphold international law.

Simply put, if Saddam's arsenal is left in tact then the credibility of the Security Council will be undermined and the problem deferred.

One must ask the question: if Saddam Hussein is prepared to risk war rather than have his weapons of mass destruction destroyed, then what act of horror does he have in mind?

This question only serves to reinforce the point that it is Saddam Hussein alone who can determine a peaceful resolution to this stand off.

The danger that these weapons of mass destruction pose to the civilised world has become even more immediate as they could potentially find their way into the hands of non-state actors.

The sophisticated techniques employed by terrorist groups such as Al-Qaeda, Islamic Jihad and Hamas together with the immense resources and networks available to them make it ever more likely that they can access weapons of mass destruction. 

No one should underestimate their intention to acquire, and ultimately to deploy these weapons.  And let there be no doubt that if they obtain access to such weapons this changes the very nature of our security.

That is why our efforts against terror and proliferation must be sustained and proportionate.

In particular, we must guard against this action being portrayed as something that it is fundamentally and patently not – a confrontation between the Judeo-Christian world and Islam - a clash of civilisations.

Indeed, the Muslim extremists are heretics to Islam as much as they are to the liberal democratic values we adhere to in the West. A Muslim colleague told me in Thailand earlier this year that on September 11 the terrorists had hijacked not only the planes but also his religion.

Thus the role for the international community is to define, articulate and enforce its common interest in defeating terrorism and in particular stopping the proliferation of weapons of mass destruction.

This brings me to the second great security challenge: the notion of collective responsibility.

Collective Responsibility

Given the common interest in preventing the proliferation of weapons of mass destruction it becomes essential that the international community take collective responsibility to stop this threat.

The United Nations is the central arena for dealing with these two key issues of international concern: terrorism and the proliferation of weapons of mass destruction.

The various UN instruments designed to limit the financing of terrorism as well as the Nuclear Non-Proliferation Treaty (NPT), the Chemical Weapons Convention (CWC) and the Comprehensive Test Ban Treaty (CTBT), are just four practical examples of international cooperation at work.

Interestingly, my predecessor was a key player in developing the CWC and I took the CTBT to the United Nations General Assembly and helped give it life.

In each of these instances the UN successfully established regulatory frameworks.

However, the United Nations has a mixed record in the more complicated and sensitive task of authorising the use of force in instances where it has been necessary to uphold its collective responsibility.

There have been stand out successes like East Timor, where quick, decisive action mandated by a Chapter 7 resolution, which provided for the use of force, helped bring an end to the violence and in doing so saved thousands of civilian lives.

However, there have also been other instances such as the former Yugoslavia where the ethnic and historical affinities of the permanent five members of the Security Council prevented any coordinated UN effort.

Despite innocent lives being lost by the day, it was not until NATO stepped in to fill the void that a successful humanitarian intervention was undertaken which stemmed the ethnic cleansing in Kosovo.

Collective responsibility is an increasingly significant test for the international community.

If states such as Iraq are allowed to develop weapons of mass destruction in flagrant breach of international law then the minority of states who have both the capacity and the willingness to meet this threat could well take action either in concert or alone.

The challenge for our age is to ensure that collective action based on collective responsibility is the primary means for ensuring international security.

However, the Security Council members must ensure that they actually do shoulder the burden of collective responsibility. 

If they do not, then either we deliver the next generation a legacy of proliferation or we rely on those willing to act in the common interest.

CONCLUSION

Ladies and gentlemen, writing in Afternoon Light, Sir Robert Menzies said:

"We took the name 'Liberal' because we were determined to be a progressive party, willing to make experiments, in no sense reactionary but believing in the individual, his rights, and his enterprise, and rejecting the Social panacea." (p286)

As I said at the outset, these principles are still as valid today as they were over a half-century ago.

The three pillars - economic freedom, political freedom and security - underpin the vision of an open society in which individuals can pursue a full life.

But history is still very much alive and there is neither full agreement between societies on the primacy of liberalism or even within the Western world on the desirability of the liberal agenda.

As for myself, I am for liberalism. I am for the open society. And I am for a modern international community which encourages a free environment of ideas, people and goods.

It is an imperfect system.  However, where it has been applied, I believe that true liberalism has led to the greatest growth and democratisation of wealth and personal freedom we have yet seen.

Liberalism remains the leading world force for advancement, renewal and peace. I have outlined how liberalism fosters progress and progress fosters security.

Ultimately, our challenge is not to retreat in fear, but to expand our freedoms and to choose the open society.


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