While the Marxist faith in central planning is now confined to a few dingy sects, a quasi-religious belief in free markets continues to shape the policies of governments.<p>Many writers have pointed to the havoc and ruin that have accompanied the imposition of free markets across the world. Whether in Africa, Asia, Latin America or post-communist Europe, policies of wholesale privatisation and structural adjustment have led to declining economic activity and social dislocation on a massive scale.

What I liked was Thatcherism's Bolshevik aspect, which was to shake up the whole of Britain quite fundamentally, and if you read what I wrote in those years I think you might agree that in taking the view that I did then — that this was necessary and desirable — I never subscribed to the main delusion of the Thatcherites, which was that you could change everything and everything would remain the same. If what you wanted was a very anarchic, globalised, polyglot, mixed-up society in which most of the structures which had somehow been renewed from the Edwardian period to the Sixties were destroyed, then Thatcherism was what would do the job.

When closed societies collapse but fail to make the transition to openness the reason need not be that they languish in anarchy or suffer a return to dictatorship. It may be that they adopt an illiberal form of democracy. Along with the liberal democratic tradition that goes back to Locke and the English civil war there is a tradition, originating in the French Revolution and formulated theoretically by Rousseau, which understands democracy as the expression of popular will. The elective theocracy that is emerging in much of post-Saddam Iraq is a democratic polity in the latter sense, as is the current regime in Iran; so is the Hamas government in Palestine... To be sure, these regimes often lack freedom of information and expression and legal limitations on government power, which are essential features of democracy in the liberal tradition. In these respects they are closed societies, but they are not dictatorships. It is often forgotten that democracy, defined chiefly by elections and the exercise of power in the name of the majority, can be as repressive of individual freedom and minority rights as dictatorship - sometimes more so.

To affirm that humans thrive in many different ways is not to deny that there are universal human values. Nor is it to reject the claim that there should be universal human rights. It is to deny that universal values can only be fully realized in a universal regime. Human rights can be respected in a variety of regimes, liberal and otherwise. Universal human rights are not an ideal constitution for a single regime throughout the world, but a set of minimum standards for peaceful coexistence among regimes that will always remain different.

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Human rights are not just cultural or legal constructions, as fashionable western relativists are fond of claiming. They are universal values. To deny the benefits of the new regime of rights to other cultures is to patronise them in a way that is reminiscent of the colonial era. If the new regime on torture is good enough for the US, who can say that it is not good for everyone?

As the Genesis story teaches, knowledge cannot save us from ourselves. If we know more than before, it means only that we have greater scope to enact our fantasies. But – as the Genesis myth also teaches – there is no way we can rid ourselves of what we know. If we try to regain a state of innocence, the result can only be a worse madness. The message of Genesis is that in the most vital areas of human life there can be no progress, only an unending struggle with our own nature.

From a Darwinian point of view, human beliefs are adaptations to our part of the world. No doubt much of what we believe must be roughly accurate, or else we would not have survived. But the beliefs we have evolved might latch on to the world only enough to help us stumble our way through it, and then only for the time being. Human belief-systems could be useful illusions, appearing and disappearing as they prove to be more or less advantageous in the random walk of natural selection. Might not evolution be one of these illusions? Scientific naturalism is the theory that human beliefs are evolutionary adaptations whose survival has nothing to do with their truth. But in that case scientific naturalism is self-defeating, since on its own premises scientific theories cannot be known to be true.

The repression of liberty that took place in the countries in which Communist regimes were established cannot be adequately explained as a product of backwardness, or of errors in the application of Marxian theory. It was the result of a resolute attempt to realize an Enlightenment utopia - a condition of society in which no serious form of conflict any longer exists.

The US — its bankrupt mortgage institutions nationalised and its gigantic war machine effectively funded by foreign borrowing — is in steep decline. With its financial system in the worst mess since the 1930s, the west's ability to shape events is dwindling by the day. Sermonising about "law-based international relations" is laughable after Iraq, and at bottom not much more than nostalgia for a vanished hegemony.