August 25, 2008, (SMH)- We are living through one of those rare yet transforming events in history, a shift in the power in the world from West to East. For 500 years Europe dominated the world; now for all its wealth and population it is drifting into relative decline.
Will our understanding of this transformation, and our acceptance of its equity for the greater reaches of mankind, lead us to a position of general preparedness of its inevitability, or will we cavil at it in much the same way as Europe resisted the rise of Bismarck's creation at the end of the 19th century?
We can see, with this the 29th Olympiad, the questioning of China and the resentment at its pretensions about being one of us. Even becoming one of us!
The Western liberal press featured, generally in critical terms, the world-long torch relay, juxtaposing all that it represents and is good about it with what it sees as China's democratic defects, viewing it almost exclusively through the prism of Tibet.
Saying, almost, that the aspirations of this massive nation, a quarter of humanity, a legatee of a century of misery, dragging itself from poverty, is somehow of questionable legitimacy, because its Government's attitude to political freedoms and in specific instances, human rights, are not up to scratch. Ignoring the massive leaps in progress, of income growth, of shelter, of the alleviation of poverty, of dwindling infant mortality, of education, of, by any measure, the much better life now being experienced by the great majority of Chinese.
The Western critic feeling the epicentre of the world changing but not at all liking it, seeks to put down these vast societies on the basis that their political and value systems don't match up to theirs.
Henry Kissinger made the point recently when he said, "We cannot do in China in the 21st century what others thought to do in the 19th - prescribe their institutions for them and seek to organise Asia."
And he went on to pose the question: do we split the world into a union of democracies and non-democracies, or must there be another approach key to regional and historic circumstance?
There is a view that should China become a democracy, a real one, many tensions in the global system would go; that democracies find peace with other democracies; that the former political-military state first turns itself into a trading state and as wealth and opportunity rise so, too, do democratic values.
But what we must remember is that even if all the states of the world became democratic, the structure of the international system would remain anarchic.
The greatest challenge we face, whether for managing incidents or easing the new economic tectonic plates into place, will be to construct a truly representative structure of world governance which reflects global realities, but which is also equitable and fair.
For two Clinton presidential terms and two George Bush terms, the world has been left without such a structure; certainly one able to accommodate Russia and the great states such as China and India.
Instead Clinton and Bush left us with the template of 1947; the template cut by the victorious powers of World War II, the one where Germany and Japan were left on the outside, and still are 60 years later, and in which China and India are tolerated and palely humoured.
Sixteen critical years have already been lost. And it is not as if we are dealing with a world where things are the same now as they were 16 years ago. The world is dynamic: 16 years ago China was not a world power; today it is. Sixteen years ago, Russia was collapsing; today it is growing and strongly.
We are now sitting through, witnessing, the eclipse of American power. Yet for those 16 critical years, two American presidents did nothing to better shape the institutions of world governance.
And there has been no help from the old powers; Tony Blair's Britain and Jacques Chirac's France. After all, they had box seats to the event, courtesy of being on top in 1947.
But Blair's contribution was not anything new or free-thinking, rather he thought being an American acolyte was all that was required. Chirac was simply incapable of adding any strategic value to the equation.
The fact is we are again heading towards a bipolar world. Not one shaped by a balance of terror like the old one, but certainly not a multipolar one - in fact, one heavily influenced by two countries; the United States and China.
Russia's economy, while growing in strength from the burnt-out wreck it was in 1990, will not be in the league of that of the US or of China.
But Russia will still be wealthy; wealthy enough to continue to field its massive arsenal of nuclear weapons. So whether you attribute to Russia full "pole" status or not, you can certainly attribute to it huge strategic standing.
It is more the pity then, that following that unexpected epiphany in 1989, the Clinton administration rashly decided to ring-fence Russia by inviting the former Warsaw Treaty states of Poland, Hungary and the Czech Republic to join NATO.
By doing so, the US failed to learn one of the lessons of history: that the victor should be magnanimous with the vanquished.
At some time the US will be obliged to treat Russia as a great sovereign power replete with a range of national interests of the kind that other major powers possess.
In the meantime, the great risk of this sort of adventurism is that with NATO's border now right up to western Ukraine, the Russians will take the less costly military option of counter-weighing NATO's power by keeping their nuclear arsenal on full operational alert.
This posture automatically carries with it the possibility of a Russian nuclear attack by mistake. The years of Russia's economic poverty, certainly since the collapse of its economy in the first half of the 1990s, has meant the Russians have allowed their surveillance and early warning systems to ossify. To compensate, they are keeping their nuclear arsenal on full operational alert.
This leaves the rest of the world relying more on the generals, the battlefield commanders and intelligence assessors to restrain a nuclear response than it does the Russian President or his Government. This means that while the Cold War is over, the risk of a mistaken pre-emptory response has increased.
Many people will think and some will say that with communications and the globalisation of economic wealth being what it is, an outbreak of a major conflict seems more and more remote. That global interdependence and the shrinking of the world makes war a decidedly unproductive way of resolving foreign policy differences.
People should be reminded that that was said at the time of the last great intensification of trade between Britain, France and Germany along with the growing US economy before 1914.
The lesson is that when the strategic bits go wrong, the economic bits soon follow. Certainly not the obverse: when the trade goes well, the strategic wrinkles get ironed out.
The structure of the international system is anarchic. Was anarchic; remains anarchic. This condition cannot be remedied but structures to mitigate its most violent manifestations can be put into place.
Against this backdrop remains the open question about "the West" and its fibre. The question that was resoundingly answered by that generation who suffered the Depression and the Second World War and who delivered us into a new era of peace and prosperity.
Is our culture a culture made compliant by too much coming too easily; producing a state of intellectual and spiritual lassitude which can only be shaken by the gravest threats, be they economic, environmental or indeed, strategic?
As that pendulum swings from West to East, are the motivations for the West's former primacy swinging with it? Has the bounty of science and industrialisation with its cornucopia of production and wealth encouraged us too far away from simpler requirements and concern for the needs of all?
As societies, have we taken our eye off public affairs for way too long?
Can we, all of us, assimilate, adjust ourselves to a constancy of peace and prosperity without lessening our regard for those enlivening impulses of truth and goodness?
A new international order based on truth and justice founded in the recognition of the rights of each of us to live out our lives in peace and harmony, can, I believe, provide the only plausible long-term template.
The old order of victorious powers, of a compromised United Nations, a moribund G8 with major powers hanging on to weapons of mass destruction, is a remnant of the violent 20th century. It cannot provide the basis for an equitable and effective system of world governance.
Just as world community concern has been ahead of the political system on issues such as global warming so, too, world community concern needs to galvanise international action to find a new template for a lasting peace, one embracing all the major powers and regions.
The philosopher Immanuel Kant said some day there will be a universal peace; the only question, he said, is will this come about by human insight or by catastrophe, leaving no other outcome possible.
Humankind demands that that proposition be settled in the former and not the latter.
Paul Keating was prime minister from 1991 to 1996. This is an edited extract of a speech delivered to the Melbourne Writers' Festival on Saturday.