As we tried to get our heads around events outside the cafe, uninvited pictures were taken of us by what appeared to be paparazzi. Obviously, we weren’t celebrities but our Caucasian skin probably led to the presumption that we were American and maybe “grieving Americans in Oaxaca” was thought a picture worth having. Our picture, though, didn’t appear in the local newspapers that we bought and which somewhere, probably my parent’s house in Cumbria, I’m fairly sure I retain as a piece of local perspective on an epoch defining event.

For the most part, the Mexicans with whom we had contact were shocked and respectful. I remember a conversation in Spanish in our hotel reception coming to a hushed silence as we returned. The receptionists looked at us, looked at the reports from New York on the TV behind them and looked again at us. We didn’t speak much Spanish and they didn’t speak much English, but their body language communicated a bewilderment and concern that we, as assumed Americans, might be more directly impacted (which, thankfully, we weren’t).

My friend and I graduated from Durham University a few months before and I’d been a know-it-all, smart-arse presence in politics tutorials. In these tutorials, I had a (probably conceited and almost certainly naive) answer to any point of view. As we reflected on events, on the balcony of our hotel room, overlooking the city, with its rich Spanish Empire-era architecture, I had no answers. I had barely anything to say. This strike against the great power of our time was utterly beyond my ken.     

The next day the main square of Oaxaca was packed with farmers, with their traditional dress, pitchforks and placards. Primarily, they seemed to be protesting some local issue. The placards that jumped out, though, were those that featured pictures of the attacks on the Twin Towers and the words “a strike against Yankee imperialism” (which even our Spanish was able to decipher). Those pitchforks suddenly seemed more menacing. We left before anyone turned them on us.

Given that the hotel TVs broadcast Spanish language stations and that sitting in an internet cafe all day would have cost a small fortune, our news flow remained relatively patchy over coming days. We’d quickly descend on any TV we came across, seeking out nuggets of information on any developments. The news we were dreading was America letting loose some kind of Armageddon. The possibility of massively violent retribution seemed real.

Between protesting farmers and foreboding about what America might do next, we seemed to have descended to a much more polarised and uncertain world. In this sense, we succumbed to being small cogs in the giant wheel of someone who I had never previously heard of, Osama Bin Laden. Mercifully, his master plan now seems much less on track.

As the national transitional council’s (NCT) grip on Libya tightened, I wondered: What do the Muammar Gaddafi loyalists in their last redoubts want? Having refused the NCT’s generous reconciliation offer, do the Gaddafi loyalists really think that they can recover the whole of their country? As this is implausible, it must be that they remain loyal enough to their barbaric, ego-maniac, delusional leader that they’d rather die in his name than accept Libya’s new reality.

Belief held so absolutely has become alien to most westerners and, thus, inherently terrifying. Willingness to fight to the death is beyond the ken of people unwilling to fight for much besides the TV remote. That’s why it wasn’t just Tony Blair and George W Bush who were mortified by Al-Qaeda. We all were. These ingenuous people would go to any lengths, including sacrificing themselves, to destroy us. What wasn’t to be afraid of?

Well, much less than it seemed. We thought Al-Qaeda’s appalling idea could attract ever more active backers. We suspected that many people, possibly millions, absolutely believed things utterly out of kilter with what we believe fundamentally. And they believed these things with the passion of newlyweds, while the passion of western citizens for the defining values of their states is that of the long married. Not non-existent, but not obviously burning.

While the passionate beliefs of Gaddafi loyalists now bemuse western eyes as much as the passionate beliefs of Al-Qaeda have done, these passionate beliefs are very different, of course. Gaddafi comes from a tradition that starts with Gamal Nasser and hopefully ends with Bashar al-Assad. Upon these strong men Arab states were personalised. Gaddafi was Libya and Libya was Gaddafi. And that just seemed the way things were.

This appeared almost as otherworldly to western eyes as Al-Qaeda, who hoped to replace the secular despotism of the Arab dictatorships with an Islamic caliphate. Ten years after 9/11, revolutions have come, but not those anticipated by Al-Qaeda. Modern freedom was more attractive than returning to the seventh century.

In bravely rising up, the Arabs showed themselves to be not so odd after all. They’ve hungered for the same things that Al-Qaeda want to destroy. Not western values, but universal human values: liberty, democracy, the rule of law, the absence of arbitrary power. Now the Arabs are for the long march through the institutions but with what Hegel called weltgeist on their side. Ultimately, they will arrive at states embodying the universal values for which the Arab Spring strives.

The rise of the rest, particularly China and India, is often taken to mean that weltgeist is passing from west to east. But, while the values championed by the Arab Spring are universal, they have their fullest expression in the west. The power of this advantage is overlooked in the rush to proclaim western decline. Western countries are not convulsed, as China and India are, by the protests of expanding middles classes, no longer prepared to have their rights trammelled upon. Trade with China has often been justified in terms of Chinese economic freedom being a precursor to a more assertive Chinese middle class, which would demand political freedoms.

This argument for Chinese trade is a confident western argument; an argument that believes in the potency of values upheld by the west. Yet, just as the Arabs are inspired by the same values that this now emerging Chinese middle class demands, so underlining the universality and appeal of these values, western confidence seems nowhere.

This diminution was encouraged by needlessly betraying the values that Al-Qaeda assaulted (Abu-Ghraib, Guantanamo Bay). As well as an economic crisis in which the commanding heights of private capitalism were massively subsidised by the taxpayer and, subsequently, banking practices remained unreformed amid widespread public and private deleveraging and horribly anaemic growth rates. But these post 9/11 mistakes and the financial crisis were self-inflicted western wounds. From which we could recover strongly with a fraction of the resolve that the Arab Spring has required.

It wasn’t always so. Britons once volunteered to fight against those who would crush universal values. They believed, as strongly as the Gaddafi loyalists who now cling to their wrong-headed beliefs, that if they could shoot Welsh rabbits then they could kill Spanish fascists. The spread of universal values that the Arab Spring and the rise of middle classes in China and India portends, hopefully, means that we won’t have to fight as the International Brigade did for these values.

Certainly, this spread means that the west should have more confidence in our capacity to build a world that would make these universal values universally enjoyed. A confident west would, amongst other things, now be offering the same kind of carrots and sticks towards enduring democratic change in the Arab world as were offered to Eastern Europe twenty years ago.

It doesn’t just matter that the values that shape the west are universal. It also matters that the west believes in them enough to act upon them.

People make their own history, as Karl Marx knew and Angela Merkel and Barack Obama cannot deny, but under circumstances existing already, given and transmitted from the past. Over hundreds of years America has evolved to a fiercely divided, uncompromising polis wedded to a system demanding compromise. Over decades Europe has achieved monetary union. Thousands of years of history hang over its fiscal consummation, which is required to avoid collapse and further calamity. The tradition of all dead generations weighs like a nightmare on the brains of the living.

One of the ironies of Marx is that communism was supposedly inevitable, but his tombstone declares that the point is to change the world, not interpret it. What’s to change if history’s terminus is already determined? What was the point of agitating publications like the Communist Manifesto if we were all, in spite of ourselves, destined for communism?

Such publications imply that Marx himself may not have seen communism as quite the iron certainty that rigid interpretations of his writing suggest. But one of the divisions between Marxism and much of the rest of the left concerns the extent to which we are prisoners of history. Parties such Labour predicate themselves on an assumption that the institutions of advanced capitalist democracies can be moulded to serve socially just ends. Ed Miliband’s father, of course, like other Marxists, thought this naive.

Recent economic events seem to vindicate Ralph Miliband. Political leadership seems oxymoronic when our nominal leaders appear only witnesses to events that they can barely fathom, let alone command. (In the non-economic sphere, our Tuscan prime minister is similarly bemused by the revenge of the lumpenproletariat). Nothing has happened to undermine James Carville’s famous wish to come back as the bond market and intimidate everybody. It’s these markets that are in the box seat and our political leaders that are cowered.

What they demand are credible plans from governments to repay their creditors. This isn’t unreasonable. I expect you’d want to see credible repayment plans before you leant non-trivial amounts of money. The governments of the third and fourth largest economies in the eurozone, Italy and Spain, seem increasingly unable to produce such plans. The downgrade of the USA, though unjustified, speaks to a similar lack of confidence in America’s ability to manage its debts.

While events seem to lead towards the largest country in the world that still professes to be communist, China, being an ever more dominant geo-political force, the Marxists should not be too triumphant. The markets are, of course, as powerful as James Carville’s wildest dream and Ralph Miliband’s bleakest nightmare. But they do not remain beyond the capacity of political leaders to have them becalmed. That is if political leaders do what it says on their tin; lead.

This doesn’t mean interpreting opinion polls as immovable. Germany, for example, could swing behind the full steps required to save the euro if Merkel articulated them well enough. It means seeing your electorate as intelligent beings capable of being won over by the force of your argument and your actions. Merkel and Obama can still do this. But only if they stop being intimidated not only by the bond markets but also by opinion polls, their political opponents and their own inevitable failure to hold in their minds every relevant fact and figure.

As the Irish leader, Enda Kenny, has said the answer from Merkel, whether the question is bailouts or debt restructuring, is always no – until it is yes. We all know the big question hanging over all of this: will the single currency underwrite the debts of all of its members? These debts would be eminently manageable under such an arrangement; so long as the political will to enact such an arrangement can be found. It is for Merkel to find this will. If she cannot, then she should say so speedily. The longer she delays the worse the fallout when she confirms her inability to rise to her historic purpose.

In spite of the tea party and the fractious nature of US politics, things are more straight-forward for Obama. He has no unprecedented, continent-wide institution building project to contemplate as a matter of existential necessity. His outlook would suddenly look much rosier if he could only say yes, we did achieve growth rates in 2011 equal to the hardly spectacular rates of 2010.

Can the US really not grow at 2.8 per cent this year? Can unemployment really not be significantly reduced from the historic high of 9.2 per cent? While markets fret over the ability of governments to manage their debts, they are also increasingly worried that the US cannot do better on growth and unemployment. Surely if the social democratic faith in the power of government is justified then Obama can prove them wrong?

Merkel and Obama can rise to their challenges or we succumb to capitalism’s latest crisis. These crises will not, however, give way to something as pleasant as Marx envisaged communism to be. It will be something with much more of a Chinese flavour.

The epoch changing events in the Middle East, lest we forget, were precipitated by Tarek el-Tayyib Mohamed Ben Bouazizi. Just over a month later, Karim Medhat Ennarah, an Egyptian protester told the Guardian, with tears in his eyes, that:

“For 18 days we have withstood teargas, rubber bullets, live ammunition, Molotov cocktails, thugs on horseback, the scepticism and fear of our loved ones, and the worst sort of ambivalence from an international community that claims to care about democracy. But we held our ground. We did it”.

In the intervening period, the most that William Hague could do to respond to the beauty and bravery of these protestors was to mouth almost exactly the same measly words as Hosni Mubarak about an orderly transition. Britain managed to be dismissed as at best irrelevant, as Krishnan Guru-Murthy noted, both by the Mubarek regime and by those risking their lives to overthrow it.

Our Garibaldi, David Cameron, wasn’t content. He set off on a crusade for freedom. He was the first western leader to visit post-revolutionary Egypt. All very noble. But are arms really the first thing required in the birth pangs of democracy? And is the most fundamental right of British citizens not protection from indiscriminate violence?

At least two prime ministers, Anthony Eden and Tony Blair, became defined by the Middle East. The unanswered pleas for assistance of British citizens in Libya to the British government as Cameron set out on his freedom mission are the tragic loop of history. Its farce is the phalanx of arms dealers in which he shrouded himself.

Egyptians thought us pointless during their revolution. Cameron’s mantle of missile manufacturers mean they now think us grubby. Rather than demeaning us in this way, Cameron should have ensured that his government executed the same basic function that every government deserving of the name was capable: getting our citizens out of the hell that Libya has descended into. Turbine engineer, John Rouse, told The Evening Standard:

“We are going crazy because everyone is getting rescued but us. The Chinese, French, the Russians, Americans – everyone’s leaving but the British can’t sort it out”.

To minimise suffering in Libya, the UN should have implemented a no-fly zone at the earliest opportunity. But the ability of our prime minister to be doing what he should have been doing – leading the calls for a no-fly zone – is compromised by him not having fulfilled his duty: to rescue all British citizens from Libya. Our capacity to lead these demands is, obviously, constrained both because we almost certainly need to have further flights into Libya to recover our citizens, and because we therefore have such a pressing incentive not to spark reprisals against Britons by Colonel Gaddafi.

Cameron’s government is still addressing last week’s challenges. By now, our citizens should be safely home and a no-fly zone should be in place. Neither of these outcomes, tragically, has been brought about. The debate should now be focused on how many Libyans have to be killed by Gaddafi before we are prepared to risk our troops for them and how we might end the carnage enveloping that country.

Not that sending in troops is necessarily the best way for us to do this. President Obama is right, however, that all options should be considered. And we should now be assessing our options in this regard, not worrying about our fellow citizens stranded amid Gaddafi’s orgy of violence.

If we really want to honour Mohammed Bouazizi, we should always stand up for freedom. We didn’t do this while Egyptians stood up to Mubarek for their freedom. We lacked the competence to ensure the freedom of our citizens in Libya.

Some say that British foreign policy has lacked direction under this government. That the government’s “approach to foreign policy is to not have a foreign policy”. The truth is now emerging: gutless and inept leadership is painfully and needlessly squandering our most precious commodity.

Which is not arms or oil, but freedom.

“I didn’t need a diplomatic decoder to work out what he was really saying : “Britain doesn’t matter, who cares what it says?” Out on the streets they don’t have a much higher opinion of Britain with our mother of parliaments and democratic history – the refusal to back the protesters, the following of the Washington line, the use of almost exactly the same phrases as Mubarak about orderly transition, the need to avoid chaos, the dangers of the Muslim Brotherhood and the need for broad based government – it has not exactly left London looking like a beacon of democratic hope. So here we are – 21st century democratic revolutionary thinking spreading across the middle east and Britain isn’t much liked by anyone on any side. That’s a tricky place to be for a declining world power.”

Within 48 hours the front page of the Guardian was reporting that Karim Medhat Ennarah, an anti Hosni Mubarak protestor, had said to them, with tears in his eyes, that:

“For 18 days we have withstood teargas, rubber bullets, live ammunition, Molotov cocktails, thugs on horseback, the scepticism and fear of our loved ones, and the worst sort of ambivalence from an international community that claims to care about democracy. But we held our ground. We did it.”

Surely if William Hague had one iota of the bravery of Ennarah he wouldn’t have been mouthing almost exactly the same phrases as Mubarak about orderly transition?

I am as saddened by Hague’s needless and gutless timidity as I am moved by the spirit of Ennarah and those proud Egyptians like him.

Not all states in the world are democracies or respectful of human rights, of course. That doesn’t mean the UK shouldn’t have economic and political dealings with these states. But these dealings should never be confused with endorsement. And they should always seek to encourage the spread of basic rights. Because all people have democratic and human rights, which the UK should seek, as far as we are able, to have upheld. 

The Egyptian protests made obvious that the end-game had been reached by Mubarak and changed the calculus of our engagement with Egypt. In this changed world our foreign secretary shouldn’t have found it so hard to say:

“We believe that all people have democratic and human rights. We always seek to have these respected as far as we are able. We previously encouraged reform in Egypt. It now seems clear that the Egyptian people, quite rightly, are demanding that their democratic and human rights be respected. Plans now need to be brought forward to act upon these demands. President Mubarak either needs to come forward with such plans as command the confidence of the Egyptian people or he needs to stand aside in favour of someone who is capable of doing so.”

If the UK is unable to stand up for fundamental rights in this way the decline that Guru-Murthy writes of will only speed up.

Francis Fukuyama is best known for confusing the period between the falls of the Berlin Wall and Lehman Brothers with the end of history. This was to be defined by the global triumph of liberal democracy and market economies. He recently conceded:

“The most important strength of the Chinese political system is its ability to make large, complex decisions quickly, and to make them relatively well, at least in economic policy”.

China is neither liberal nor democratic, but its state-directed model of capitalism is reshaping markets across the globe. Nonetheless, everyone from George W. Bush to Will Hutton is confident of the model’s limitations. It is thought that history hasn’t ended yet, but that it will, and on the lines that Fukuyama proclaimed.

“Trade freely with China and time is on our side”, said Bush. These economic freedoms will, ultimately, it is argued, require political freedoms. This is because per capita western incomes depend upon what Hutton calls the “enlightenment infrastructure” – pluralism (multiple centres of political and economic power), capabilities (rights, education, private ownership) and justification (accountability, scrutiny, free expression).

Hutton made this argument in a debate with Meghnad Desai in Prospect just before the credit crunch. Desai scoffed: “For you, there is only one road to capitalism – the Western one – and only one political system – ours”. The crunch must place at least a question mark next to Hutton’s Whiggish confidence.

Perhaps the most important way in which 11 September 2001 changed the world was in making more apparent what few had already perceived: the ambition of Al-Qaeda’s threat to the west. Similarly, the significance of China’s rise wasn’t widely understood before the financial crisis. Now it is more obvious.

Zhu Min, special advisor to the international monetary fund, coined the phrase “three-speed” recovery in the opening debate at Davos this year. This involves emerging economies growing at more than 6 per cent in 2011, the US by 3 per cent and Europe by less than 2 per cent. Negative growth in the fourth quarter of 2010 puts the UK in the slowest of the slow. China is among the quickest of quick. It isn’t a global crisis anymore. It’s a European crisis.

While Fukuyama applauds the efficient rapidity of Chinese decision making, the Eurozone is sluggish to confront its big choices. Not that the UK should be smug. We’ve allowed banks “too big to fail” to morph into banks that increasingly seem “too big to save” – without correcting the causes of these banks becoming too big to fail. We’re also guilty of failing to match lofty rhetoric on climate change with effective policy and of drifting towards dependence on Gazprom in an ever more resource-stretched world. To say nothing of our geriatric-paced policy response to demographic change.

Yes, a plan for growth is essential. But for this to be meaningful it needs to chart a trajectory for the state to stop being a featherbed for bankers and start being a catalyst to a more energy-efficient and innovative economy.

All of this is painfully clear, as is the inability of David Cameron to offer anything like an adequate response. All politicians are in the gutter, but Cameron isn’t staring at the stars. Hu Jintao is. Mark Leonard in Renewal credits him with leading a campaign of “asymmetric warfare” against the west: “finding and exploiting the enemy’s soft spots”.

After international financers, like George Soros, humbled the “Asian tigers” in 1997, Chinese intellectuals, Leonard notes, pondered: “If a lone individual like Soros could unleash so much destruction simply for profit, how much damage could a proud nation like China inflict on the USA with its trillion dollars of foreign reserves”?

China and America’s condition of mutually assured economic destruction means this theoretical proposition is unlikely to be soon tested. It does, however, expose the vulnerability of the west, particularly if the uber-pragmatists of Jintao’s generation are succeeded by a more assertive cadre. That the question is even asked shows that Chinese leaders are capable of doing what our leaders struggle to: coldly assessing strengths and weakness and, given these strengths and weaknesses, ruthlessly pursuing objectives.

Al-Qaeda are world leaders in asymmetric warfare as it is conventionally understood. Guantanamo Bay and Bagram are the weakest parts of the west’s response, because they compromise our defining values. Privatising the upside of banking, while socialising the downside, also rejects the fundamentals of capitalism. Chinese-style, forensic assessment of the West’s strengths and weaknesses would rank our values – the “enlightenment infrastructure” – as our greatest strength and anything that belittles them as corrosive weakness.

Leadership is required for this betrayal to be averted – most pressingly in relation to Egypt. True leadership would also see it as analytically inadequate and careless with the hopes of millions simply to presume that Hutton is right and Desai is wrong. Hutton is right insofar as the “enlightenment infrastructure” is the richest inheritance and the seed of the innovation that can allow the West to prosper in a century in which China will be much more globally consequential than before.

However, in addition to this infrastructure, leadership will be necessary for the west to so prosper. Real leadership isn’t just about rhetoric or grand promises to be fulfilled years hence, but about the policies that will concretely advance these promises: the prose as well as the poetry. In respect of the key challenges that confront them – banking, energy, climate change and ageing – western leaders provide little of either. In particular, they struggle with the prose, which comes so easily to the Chinese. This needs to change if history is, after all, to end.

Labour modernisers have been largely pro-European since Neil Kinnock made them so. The role of the EU in advancing Labour’s goals has often, however, been vaguely defined. As UK relations with the EU head towards various crunches, this seems likely to be inadequate.

The issues that are most important to people will determine the next general election: the economy, jobs and public services. Nonetheless, debate about the EU is going to get hotter. As this happens, the connections between EU policy and the things that people care most about are likely to become more apparent.

Most immediately, the European Union bill, over the short to medium term the euro-zone crisis and the longer term need for the UK to adapt to the rise of Asia could all bring UK/EU relations to the boil. The first of these pressure-points diminishes UK influence in the EU at the same time as the second poses not only an existential crisis to a currency to which we don’t belong, but a union to which we do and our largest trading partners.

Either disintegration of the euro/EU or consolidation of the euro as both a fiscal and monetary union seem more likely outcomes of this crisis than perpetuation of the status quo. Either way, British business has only just begun the adaptation that it must undergo to prosper in a world whose centre of gravity lies ever more firmly to the east.

Liberal Democrat MEP, Andrew Duff writes of the European Union bill, which is being taken through Parliament by the government of which his party is a part: “The blunt truth is that if this bill becomes law, no future EU treaty revision will be possible if the UK remains a full member of the Union.” This could yet create serious splits within and between the two parties of government, which Labour should encourage by robustly opposing the bill and reaching out to pro-European Lib Dems and Tories (who may have died off in the Commons but still exist in the Lords).

At some stage in the management of the euro-zone crisis, irrespective of what finance ministers may insist, haircuts for bondholders and state debt restructuring seem virtually inevitable. Because some euro-zone members are too over extended; the bailout facilities available to them too finite (the largesse of even the IMF must know some limits); and the austerity that follows these bailouts too terrible (the wretchedness of all of Ireland is increased for the sake of sparing bondholders any pain, as Fine Gael, the likely winners of the national election expected in March, argue).

While she may be concerned with German interests, rather than troubled by the austerity misery that seems set to extend beyond Greece and Ireland, Angela Merkel appears to understand this. It was market recognition of this understanding, and fears of Germany imposing haircuts on Irish bondholders, that weakened the Irish such that they had to accept a bailout and austerity. An attempt will have to be made to confront the necessity for haircuts while minimising the fever of market reactions to this confrontation.

If German politicians wish to minimise their fiscal transfers to the rest of the euro-zone, their officials may be discretely working on the details of such an attempt. French leaders appear increasingly sanguine about the consummation of such a fiscal union and much greater co-ordination of economic policy by members of the euro. To Germans this may seem like France trying use German money to pick French “winners”, which could make any fireworks between the Tories and the Liberal Democrats appear relatively tame.

Undoubtedly, economic turbulence will persist in the euro-zone until some massive political choices are faced. The UK must act responsibly and avoid gloating. The short to medium term interest of the UK is minimisation of this turbulence and our longer term interest is in whatever kind of Europe best enables us to adapt to our Asian age. This means, if Germany is as determined to keep the euro together as it claims, encouraging Germany to face the full consequences of this, which probably requires both a convincing plan for haircuts and an enduring framework of some kind for fiscal transfers within the euro-zone.

It is easy for George Osborne to say that Ireland will be the only euro-zone member to be bailed out by the UK – a position that will come under considerable pressure as the turbulence endures and which won’t be strictly true once the IMF are in Portugal. But it is harder for him to engage with Germany on the steps that ought to be taken, as they would probably necessitate treaty change and, under the European Union bill, according to Duff, an end of full EU membership for the UK.

While defending UK membership of the EU, Labour should demand an EU best equipped to enable us to adapt to Asia’s rise. As Asia gets more serious about curbing carbon emissions, for example, we should be selling them the green manufacture that enables this. However, innovation in green manufacture will be undermined so long the EU-ETS remains as ineffective as it is in establishing a carbon price. Labour should seek to provide the leadership to change this and have the EU focus more intently upon areas such as this where it really can add value. Rather than devoting its energies to less controversial policy areas in which the added value of the EU is much less clear.

Tony Blair made adaptation to globalisation a Labour leitmotif. Yet the existence of the “squeezed middle” is a symptom that he did not finish the job. Today’s globalisation is more about the rise of Asia than was the case when Blair became party leader. Easing the squeezing requires better adaptation to this Asian age.

It will take more than David Cameron hawking UK PLC from one rising Asian power to the next. The prime minister is listless in the face of power seeping from the over-indebted West to the resource-rich East, so neatly encapsulated by FIFA’s world cup decisions. His PR smoothness is no substitute for leadership in urgent debates about the architecture of globalisation. It seems that his only reason for attending the G20 was, unsuccessfully, to press the flesh for England’s world cup bid.

Perhaps Cameron confused diary entries, and we lost the world cup after he confronted FIFA president, Sepp Blatter, on macro-prudential regulation. After all, the Tory-Lib Dems’ bail-out of the Irish demonstrates that we live in an interconnected age. It exposes their myth: that our economic predicament is solely Labour’s fault.

While Cameron cannot afford himself a robust response to Asia’s rise, leading centre left thinkers are looking at the bargain Labour struck with globalisation. On the one hand, it was relaxed about the filthy rich. On the other, it recycled tax revenues into public services and redistributions, like tax credits, at unprecedented levels. But the most striking feature of this economic model is its dependence upon secondary redistribution. The middle is squeezed because we have not got to a more equitable distribution of market rewards.

John Humphrys may find it bizarrely incomprehensible, but the squeezed middle is not just a British phenomenon. In the US, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973. It used to be middle-class aspiration that Labour needed to tap into. Now the middling sort across the whole of the West is anxious. It is even possible to understand the tea party movement when you realise that at its core is anxiety, not guns and bibles.

Tea partiers, like Essex men, are more focused on keeping what they have than wanting more. They want to take their country back, not look for answers from the great beyond. They are resentful of any perceived threat. Whether that is losing their health insurance to Obamacare or their jobs to the oilfields and factories of the East.

Politicians across Europe are increasingly willing to bemoan minorities and immigrants, other governments and Brussels. There are many corners of foreign fields that seem forever Mrs. Duffy. Tackling the squeeze is a precondition of curbing this.

Globalisation will only go into reverse if an open currency war follows banks and states defaulting. Almost any amount of squeeze for the middle and anxiety for Mrs Duffys is worth it to avoid this 1930s scenario. And the more squeezed the middle becomes, the more politicians will struggle to resist protectionism and competitive currency devaluations. These would be the seeds of a cataclysm of 1930s proportions. We cannot sustain globalisation without improving social justice both domestically and internationally.

In the UK, we must recognise that income distributions that are skewed towards the rich minority are a practical menace, as well as morally questionable. Countries with lower Gini-coefficients (a measure of the inequality of a distribution – the higher the score, the more unequal) are more likely to increase consumer demand in sustainable ways. This means that median workers will not find their wages squeezed, and their maxed-out credit cards will not create booms and busts. Labour must find ways of achieving this while scaling back government to control the deficit. Here – after the public spending largesse of the Blair/Brown years – we start with a blank piece of paper.

Even if social democracy means that the state consumes an ever-larger slice of GDP, it cannot mean it now, in such fiscally straitened times. That states, as well as markets, fail should not leave social democrats bereft of hope. It should inspire a radical pragmatism for whatever truly works. A pragmatism never abashed by cross dressing or reformers and one unafraid to deploy state or market wherever it is best suited.

Advancing social justice internationally won’t be achieved by Cameron’s glad handing. His G20 failure, which Brown would have avoided, was far more of a dereliction of duty than his failure to deliver, in contrast to Blair, a global sporting event. Not least thanks to Brown, world leaders were quick to come together effectively in the early stages of the global crisis.

The extent to which the fundamental causes of this crisis have been addressed is debatable. Global leaders must maintain their engagement in order to tackle these causes. Not just applaud what good chaps Prince William and David Beckham are. Cameron offers vapid PR stunts instead of leadership. Whereas Labour must find practical ways of advancing social justice here and internationally. Only then can the globalised middle end up slightly more eased than squeezed.