There is a consensus from top to bottom of the Labour family that we urgently need a new sense of direction. As I write, the briefings are loud in their promise of renewal of "the project". Renewal, though, must be about more than reviving party political support. It must also offer a prospect of giving politics back a sense of excitement, and rekindling the dwindling interest in the political system. That means a return to value-based politics.

No government should expect to be re-elected if it cannot prove that it has provided better hospitals and better schools. But although it is necessary for politicians to be competent managers, it is not a sufficient condition for a successful political movement. Political choice is about the kind of society in which voters want to live.

What makes a society strong is its sense of social cohesion, the belief of all its members in their basic equality. That is why progressive political forces who value society treasure institutions which reinforce the sense of equality: an open democracy in which everyone's vote is of equal worth; a free health service in which patients get equal treatment depending on their medical need; and an education system in which everyone can develop their full potential. Commercialising public services erodes this public realm.

Social fairness is the natural complement to civic equality. Both should be part of the core values of a centre-left party. Fairness in the distribution of income and wealth is an essential feature of a good society.

New Labour is curiously diffident about proclaiming its commitment to fairness. Its commitment is real enough - this government has been the most redistributionist since Lloyd George. But Labour keeps such progressive policies under wraps.

Ultimately, a strategy of trying to deliver social justice by stealth is not sustainable. In particular, Labour loses the opportunity to consolidate its core support among the very voters who have benefited most from its government.

The postwar settlement was built on a recognition that the market economy was a valuable servant of society, but a capricious master. Today, the balance between social intervention and the free market has been unhinged by the dominance of an aggressive market fundamentalism. The neo-liberal hegemony dictates that maximising shareholder return is the prime objective of business organisation, that individual self-interest is the sole motivation of economic activity,and that social institutions, such as governments, should shrink to a minimalist role. There can rarely have been a moment in the history of political thought when its dominant economic thesis was regarded with such popular distaste.

There is, therefore, an opening for an alternative economic analysis that can both command public support and more comprehensively account for the social ingredients that are essential to economic success. For one, all-too brief moment, the stake-holder economy surfaced as an organising principle of the "third way". The retreat from it was disabling because it left New Labour with no distinc tive economic narrative. A coherent centre-left project must start from the proposition that the economy is not the property of any single set of participants in it, but that it is a public good which must be managed in the public interest.

Embracing such an analysis would help New Labour find the confidence to be ambitious where it has been cautious. In the first place, it could be more robust in defending the case for public regulation than credulously accepting neo-liberal demands for deregulation. Nobody was louder in his demands for less regulation than Ken Lay, chief executive of Enron, and nothing better demonstrated the public interest in more regulation of accounting standards than the collapse of his company.

New Labour should also be more ambitious in promoting public intervention in the protection of the environment. The market is incapable of respecting a common resource such as the environment. Yet every participant in the market will experience a loss in their quality of life if the cumulative effect of their activities is to degrade their common environment.

A paradox of New Labour is that it prides itself on modern policies but fosters a political style of uniformity that is anything but modern. Conformity is no longer valued as a virtue. It is originality and self-expression that are admired.

The paradox is that in Wilson's time, the Labour party was more pluralist than now and its senior figures had distinctive views of their own, which mirrored the spread of opinion across the broad church of the Labour vote. By contrast, New Labour aspires to a uniformity of view that is badly behind the times.

The acid test of any commitment to pluralism is whether we are prepared to allow Britain a proportional electoral system that returns a pluralist parliament. The reason why every election campaign is fought only on the issues that matter to Mondeo Man, Worcester Woman and the rest of the Pebbledash People is that campaigners hone their message to the 1% of the electorate whose swing votes in the target constituencies really count.

A more pluralist electoral system that obliged them to fight for every vote would promptly produce a more diverse campaign pitch. The programme of Sweden's Social Democrats, for example, is radicalised by the knowledge that proportional representation obliges them to look to the left as well as to the centre for votes.

Any set of values for a modern society will only be successful in practice if they are outward-looking and cosmopolitan. I still hear discussion of British foreign policy in terms of the pursuit of narrow national interest, as if we were living in the age of Metternich or Palmerston. In reality, in today's interdependent, interconnected world, the interest of the international community is also our national interest.

The old dividing lines between left and right will evolve over the 21st century into a parallel divide between cosmopolitans and chauvinists. Reactionary political forces will be distinguished by their attempts at isolation from the modern world and their nostalgia for a romanticised past. They will resent the pressures to reach international agreement as a threat, and are more likely to detain than welcome the stranger in their midst. By contrast, progressive political forces will be outward-looking and comfortable with building international partnerships.

None of these values can be caricatured as a reversion to old Labour. In truth, few members have any nostalgia for the 1980s. Those who are most disappointed by the timidity at home and unilateralism abroad of Labour's second term are the very members who were most supportive of the modernisation of the party.

Renewal of Labour will only be a success if it recaptures their enthusiasm by demonstrating that their government will now bring the same radical boldness to modernising the values of British society.

· Robin Cook MP was foreign secretary from 1997-2001 and leader of the House of Commons until he resigned from the government in March. This is an edited extract from his book, The Point of Departure (Simon & Schuster).