Chou En-Lai, China's Prime Minister for over twenty years, was once asked was he thought of western civilisation. He is said to have pondered the question and then to have replied "It would be a good idea". I often recall this comment when I return from some far flung outpost of fledgling democracy, happy to be back home, but increasingly alarmed by the superficiality and vapidity of domestic politics.

One of the huge challenges which face western society, and, by extension, western politicians, is the rise of fundamentalism in all its myriad forms. Can anyone doubt that one of the key spurs to the growth of Islamic fundamentalism, particularly amongst young people, is the visible moral bankruptcy of what are perceived as "Christian countries". There is a lack of spirituality in the west - not in a narrow religious sense, but in a dearth of belief in anything beyond the materialistic here and now. It has come to something when it is left to George Soros, often painted - incorrectly - as the arch-fiend of laissez-faire, to warn that he fears unbridled capitalism more than communism.

Seen from afar, by someone with an instinctive libertarian response to issues, and with a sensitivity honed by forty years of active Liberal politics, western society seems incapable of recognising how rapidly the seeds of its own demise are growing. The decline in human values, the aggrandisement of self, and the futile search for satisfaction in material rewards, are increasingly fed by a political establishment and by political parties, whose own awareness of what constitutes a free, secure and satisfying community has been eroded by constant attachment to electoral techniques for their own sake. We now have rule by focus group in order to offer the electorate its deepest desires.

During my time in Parliament I once found myself at a dinner seated next to a senior member of one of the big London finance houses. I asked him what I thought was a very naïve question: "On what does the international monetary system depend?". The upshot of this enquiry was a lunchtime meeting in the City with a number of bankers and other financial bigwigs all assembled to brief this solitary Liberal MP. The eventual answer to my innocent query was one word: "fear". No Bretton Woods agreement would ever be possible again; no country could underwrite the world's hard currencies and, if one country "fell out" of the charmed circle, the rest would have to rally round to ensure that the whole international market continued unabated.

With the hammer blows to the tiger economies of South East Asia a number of countries have "fallen out" and the western powers are frantically trying to shore up the edifice. This, coupled with the immense economic crisis in Russia, is likely to have huge implications for our economy for the foreseeable future. Are the consequences for the UK electorate being spelt out? Is there a single party in Parliament that is alerting the country to the looming economic disasters on the horizon? Is the moral case for assisting Russia and for forestalling ever increasing instability in South East Asia being expounded? Are the abject needs of the developing world being brought to the fore? Is the opportunity for a reassessment of what constitutes a civilised, human society being grasped? Alas, no. I see no rigorous effort by any party in parliament to attempt to awaken an essentially fearful and increasingly cynical public to the challenges and opportunities that lie ahead. And when the New Labour emperor, like his predecessors, proves to have no clothes, then great will be the public disillusion. And, what is more, great will be the chagrin of the Liberal Democrats who have glued themselves to the fortunes of the present New Labour leadership.

The potential insecurity that is looming ahead is, of course, worrying for politicians who need to safeguard stability in the community, but a society in which economic growth is no longer at the forefront of the political agenda should hold no terrors for Liberals. Precisely the reverse: historic Liberalism has always seen the obsession with economics as debilitating to human society. Over a century ago, with typical prescience, John Stuart Mill wrote:

It is scarcely necessary to remark that a stationary condition of capital and population implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress, as much room for improving the art of living, and much more likelihood of it being improved, when minds cease to be engrossed with the art of getting on.

So why are the Lib Dems not proclaiming the benefits and the potential advantages of the current international economic anarchy? Suddenly, from on high, so many political and economic imperatives are conspiring to create the fertile ground in which Liberal seeds can be sown. Out of the ether the opportunity for a uniquely Liberal answer to our tribulations has thrust itself forward. And, to my utmost sadness, there is no united, powerful Liberal political force able to grasp the opportunity and to run with it.

Whatever the alleged failings of the united pre-merger Liberal Party it was invariably a beacon for civil liberties and a resolute purveyor of often unpalatable political truths. Its record on immigration, on Europe, on identity cards, on protectionism, on ecological imperatives, was a source of pride and of admiration - including from many outside its immediate electoral support. What is the point of a party bearing the name "Liberal" - however diluted by suffix - if it fails to shout out loud a warning to the unwary on the great issues of the day? I have never doubted that there are individual Liberals within the Lib Dems, but, sadly, I fear that they have lingered so long in the realms of pragmatism and compromise that their Liberal nerve ends have long since atrophied. It is inconceivable that the pre-merger Liberal parliamentary party would have gone along with the highly repressive Criminal Justice (Terrorism and Conspiracy) Act rushed through Parliament recently in the aftermath of the Omagh bomb. Not only has the Lib Dem Parliamentary Party been collectively supine but not a single individual MP stood out from the herd and expressed even a tentative doubt about the "line" on the substantive issue. Are there no back benchers amongst the 46 MPs? Twice the number of MPs, but half the effectiveness! No wonder the usually sympathetic Hugo Young, in The Guardian, called the Lib Dem performance a "contemptible spectacle".

Criminal justice is far from the only such touchstone Liberal issue. I cannot imagine that the pre-merger party would have supported, let alone been responsible for in many local authorities, the introduction of surveillance cameras in public places. And what could more dangerously illiberal in the long run than a centrally directed national curriculum for education and the creation of unaccountable quangos for Further Education?

All these and more have been the preserve of the Lib Dems. And now we rapidly approach the Jenkins' Committee's proposals on the form of proportional representation to be put to the British people at a referendum. Make no mistake about it, electoral reform is the key to every other reform. The health of the political system will lie in how well our electoral process encourages and assists serious political discussion and debate. If our system continues to put a high electoral premium on the promotion of unpopular truths I fear for the stability of all our communities. The present system is disastrous in its inherent tendency to allow candidates and MPs to get away with trivialities and populism. Other systems contain more or less of the same drawback. Paddy Ashdown was quite right to point out at his recent conference that this issue, above all others, will be the touchstone of Tony Blair's commitment to pluralism and, by implication, of continued dalliance with the Lib Dems. But it is equally true that electoral reform will be touchstone of Ashdown's commitment to pluralism and to Liberalism. If Hugo Young's apparently well informed column in The Guardian of 13 October is to be believed, steps are already in train between Jenkins, Ashdown and Blair to fudge the referendum issue.

It will be a disaster of the highest proportions if a genuine preferential voting system is not on the referendum ballot paper. Frankly, I do not care too much about the views of the Prime Minister or the Cabinet on the form that the question should take. I, like all true Liberals, will take my chance with the electorate. It is supposed to be the individual voter's choice, not the Government's, and I object strongly to the idea of a pre-referendum carve up.

The embarrassment of the deal done with Labour and others on the electoral system for the Scottish Assembly elections is vividly apparent when one realises that in a recent House of Lords debate, as a consequence, the Lib Dem peers had therefore to vote against an amendment proposing STV!

There are surely in this country more than the two thousand or so members of the Liberal Party who are conscious of these crucial issues and who are alarmed by what is happening in western society. But if it is only our still small voice, it is crucial that we have the confidence to speak, write, lecture and broadcast on the truth as we see it.