Extract:

With the marvellous benefit of hindsight (and, as we all know, hindsight is a perfect science) what happened on 11 September should not have come as a surprise. I do not mean the particular nature of the outrage, but the fact that the protest and direct action against western democratic capitalism which we have seen develop over a number of years, would (sooner or later) spill over into terrorist attacks.

The demise of communism has undoubtedly changed the name of the game. Previously, our free market ideas and values could be portrayed as self-evidently "good" and effective by comparison with those of communism, which were clearly "bad" and ineffective. But, without the comparator, western democratic capitalism has been left standing on its own, warts and all. And that is a different and far more precarious proposition.

Add to that, the facts that -

1. so many political and economic forces are, nowadays, global or at least supra-national in character (whilst our traditional democratic institutions, which have to deal with those forces, are based on the relatively narrow foundation of the nation state); that

2. modern, digital network technology (itself global in nature) takes the pace of change and the propagation of ideas on to new levels; and that

3. the vast disparities of wealth and power around the world (which can be all too easily attributed to capitalism), the envy they breed and the associated political unrest are there for all to see, day in day out, via the global networked media.

Add all those factors together (without even mentioning radical religions) and, sooner or later, something was going to give. The tell-tale signs of attention-seeking protest and direct action (not least against globalisation and world trade) had been visible and growing in intensity for some time.

It is far too early even to guess at how everything will play out. But we can be sure that the so-called "war on terrorism" must be as much as war of ideas, values and political institutions as it is a physical rooting out of terrorist cells.

The price of freedom is, indeed, eternal vigilance. But we freedom-loving, capitalist democracies have let our guard down in recent years. We have underestimated the antipathy towards us and misunderstood its nature. We have taken the superiority of our institutions and values too much for granted. We have not spoken up for them convincingly. And, arguably we have been tardy in adapting them sufficiently to meet the needs of the times.

"What has all this heady abstraction got to do with the CBI?", you may ask. To which I would answer, "If the CBI isn't prepared to stand up and defend the values of democratic capitalism and explain and promote the role of business in society, I wonder why we are here in the first place?" In that broadest sense, the CBI is, indeed, a political organisation.

It is not for business to take on the role of politicians. But it is important that business understands and adapts to its political and social environment and that it fulfils its own responsibilities within it.

Indeed, business has a role in helping to create that environment in the first place, both in the UK and (for the multi-nationals) elsewhere in the world. It has a particular responsibility towards its constituencies of shareholders, customers, employees and suppliers. It has a responsibility to lead by example and to avoid excesses that might bring the workings of democratic capitalism into disrepute. It has a responsibility to demonstrate the key contribution that its task of wealth creation makes on behalf of society as a whole - including that of the Third World. And it is not just for politicians and economists to lead the way in convincing people that the world needs a good deal more globalisation, not less of it.

Unless it shoulders its responsibilities (and is seen to do so) business cannot properly fulfil its prime role - that of creating shareholder value.