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.

Hayek watched the interwar collapse with horror, as Keynes did, and shared many of Keynes's liberal values. What he failed to understand is that these values cannot be renewed by applying any formula or doctrine, or by trying to construct an ideal liberal regime in which freedom is insulated from the contingencies of politics.

Hayek's blind spot with regard to politics was clear in the early 1980s when the first Thatcher government, in an attempt to reduce inflation and bring the public finances closer to a balanced budget, was raising interest rates and cutting public spending. As he had done during the 1930s, Hayek attacked these policies as not being severe enough. It would be better, he told me in a conversation we had around this time, if Thatcher imposed a more drastic contraction on the economy so that the wage-setting power of the trade unions could be broken. He appeared unfazed by unemployment, which was already higher (more than three million people) than at any time since the 1930s, and would rise much further if his recommendations were accepted.

No doubt markets transmit information in the way that Hayek claimed. But what reason is there to believe that - unlike any other social institution - they have a built-in capacity to correct their mistakes? History hardly supports the supposition. Moods of irrational exuberance and panic can, and often do, swamp the price-discovery functions of markets.

Human beings act, certainly. But none of them knows why they act as they do. There is a scattering of facts, which can be known and reported. Beyond these facts are the stories that are told. Human beings may behave like puppets, but no one is pulling the strings.

The belief that there is some hidden cabal directing the course of events is a type of anthropomorphism - a way of finding agency in the entropy of history.

With new technologies of surveillance, economies of scale overcome problems of cost. Since all their electronic communications can be accessed, it is no longer necessary to segregate the inmates from one another. As there is no outside world, escape becomes unimaginable. Technological progress has brought into being a system of surveillance more far-reaching than any Bentham could have conceived. Enclosing the entire population in a virtual Panopticon might seem the ultimate invasion of freedom. But universal confinement need not be experienced as a privation. If they know nothing else, most are likely to accept it as normal. If the technology through which surveillance operates also provides continuous entertainment, they may soon find any other way of living intolerable.

Near-ubiquitous technological monitoring is a consequence of the decline of cohesive societies that has occurred alongside the rising demand for individual freedom.

Today those who peer into the future want only relief from anxiety. Unable to face the prospect that the cycles of war will continue, they are desperate to find a pattern of improvement in history. It is only natural that believers in reason, lacking any deeper faith and too feeble to tolerate doubt, should turn to the sorcery of numbers. Happily there are some who are ready to assist them. Just as the Elizabethan magus transcribed tables shown to him by angels, the modern scientific scryer deciphers numerical auguries of angels hidden in ourselves.

Humans kill one another - and in some cases themselves - for many reasons, but none is more human than the attempt to make sense of their lives. More than the loss of life, they fear loss of meaning.