This was my third Hay festival and as I watched the green, shire-like hills compress into the M4 on my drive out to Heathrow, I was struck once again by how truly rare an experience it is to be there. Wading through the crowds that flow along the raised labyrinthine walkways, one is just as likely to brush past a Welsh dairy farmer as a Nobel laureate, a Booker prize winner or the next prime minister of Britain.

There is something inherently Romantic about it all, that harkens back to the kind of impulse that drove poets like Byron and Shelley to rebel against the political culture of conservatism that ultimately served to protect the elite from the common man; they sought a political expression that could channel the humanism of their day into the realm of governance. It's a beautiful idea and one that is embodied in the mission of Hay. For in establishing the new mecca for literature, Hay founder Peter Florence instinctually attached it to the great liberal project, which, from its inception, was a grand fusion of art and politics. Even John F. Kennedy knew the value of this alchemy. As he reminded his liberal knights of Camelot, "When power corrupts, poetry cleanses, for art establishes the basic human truths which must serve as the touchstones of our judgment."

Now, of course, for all his charisma and bon mots, Kennedy was just as war-happy and territorialist as the neo-cons. Only in those days, the ideologues self-identified as liberals. And it was precisely the kind of liberalism that fixed a young Christopher Hitchens to the mantle of socialism.

Sitting in a public library in Devonshire, the budding writer and future Hay icon read an essay by Irish diplomat and historian Connor Cruise O'Brien. In it, O'Brien referred to liberalism as "the ingratiating moral mask which a toughly acquisitive society wears before the world it robs: 'liberalism' is the ideology of the rich, the elevation into universal values of the codes which favoured the emergence, and favour the continuance, of the capitalist society."

Forty years later, I met Hitchens in the Green Room at Hay. "Actually, if you read that essay," he explained, "it was exactly what I felt for us on the left in Britain: The word liberal was a very rude thing to call somebody. Liberalism was an attempt to drape capitalism with some kind of pious social conscience ..."

For many on the left, not much has changed. The developed world still needs to find ways to exploit and rob poorer nations, only now we use different words and stronger tactics. If we can't do it through the kind of mercantilist trade policies that once emblemised the British empire - and seeded the foundation of our modern liberal project - then we do it through direct military action against recalcitrant leaders. Chatting with Ben Ramm, the young editor of the Liberal magazine, I asked him if the language of pro-war leftists like Christopher Hitchens and Nick Cohen is any different from that of the liberal exploitations the past. No, Ramm smiled, "but there's a more polite term for it now. They call it liberal interventionism."

Nick Cohen and I met on a Hay stage last Sunday to discuss this very issue. For Cohen, the anti-war left who opposed military action in Iraq symbolises a regressive instinct in the liberal herd. He reduces it to an "either-or" scenario which pits those who will fight to liberate the oppressed against those who, even if unwittingly, give comfort to modern-day Islamo-fascists by opposing intervention. But this is the kind of simplistic "you're either with us or against us" dualism that got us into this mess in the first place. It's one thing to actively obstruct the movement to help people living under totalitarian rule but quite another to question the motives of the ideologues who had Iraq in their scopes long before 9/11.

I opened my talk at Hay with an excerpt from my book, Wolves in Sheep's Clothing. It's an interview I did with an American soldier a few months after the fall of Baghdad. His name was Sgt Hollis and after we had returned from a mission to engage enemy fighters on the streets of Samara, he told me that the goal of the war was "globalisation. It's about expansion of economies ... We're into the stage where we have to stabilize new and emerging markets in order to secure resources. Fifty years, a hundred years, it's not about what it can do us in the short term, it's what it can do us in the long term."

Of course, this was just one man's opinion. But it echoed the beliefs of so many of us who could not accept the Bush administration's WMD argument, nor the bleating on of leftists like Hitchens and Cohen that it was all for the good of democracy and standing up for the oppressed - indeed massacred - minority in Iraq. It almost seemed too good to be true ... this bastard son of John Pilger strapped into an Abrams tank.

So I asked him why he believed this was the true function of the war. And he plainly told me that it was one thing for politicians to make the case to a weary public. Or for intellectuals to advocate intervention for the good of humanity. But for him, who was willing to risk his life, it had to be about something more than ideas.

"When Americans say 'liberation', we mean, capitalism," he said. "It's our way of life. And we believe in it. Can you tell mothers and daughters and sisters that your sons are dying for the American way of life? Can you say that they're dying for capital goods, this and that? No you cannot. So you have to make sure that whenever you fight, you fight for moral and ethical reasons."

Cue the war-cry of liberal interventionists.

When I confronted Hitchens about this vision of "liberalism" and the skepticism people have about the west's desire to bomb nations into compliant "democracies", he shrugged. American democracy, he admitted, has become indistinguishable from free market capitalism. "There's obviously been a great trial that could've been about social democracy ... And you see, that's what people don't believe anymore. That's what made me give up. There is no ... plausible theory of power; that capitalism could be challenged. There isn't. For the first time in its history, capitalism doesn't have an ideological enemy."

Ironic, at best. Tragic, at worst. And herein lies the problem: people like Nick Cohen may have wonderful ideals but they have thrown their lot in with empire. They got their war and it has been a disaster. But instead of taking the time to question what kind of intervention we should have, and by whom, they just beat up anyone who questions it at all. And in this they have abandoned the great role they could play in defining a new era of leftism, in which we define what intervention means and what the actual goals will be.

Which brings me back to Hay, the point of which Peter Florence recently told me, "is to redeem the idea of exchange, and infuse it with fun. We were all smarter when we sat up late at night at college arguing the world to rights without political or financial responsibility. If you can get those smart people, all grown-up, back round your kitchen table, then you have a chance of refreshing that idealism and energy. Imagine a young liberal heart firing a wise liberal mind again ..."

Scanning the list of politicians, philosophers, diplomats, environmentalists, scientists and poets who have descended upon this village over the past decade, I can't help but wonder about the potential of the Hay festival to become more than just a series of brilliant talks and encounters that evaporate into the ether once the tents come down.

Clearly we are moving into an era which will be defined by how the west responds to the crises in less mineral-rich and strategically located nations like Sudan. And we need to create a forum which exists outside of the corrupted American and British political apparatuses, and indeed the badly-named United Nations, where the people of these liberal nations can decide how to use their wealth and military might. Because at present, too much of the world sees us as wolves in sheep's clothing and our "liberal interventionism" as a sheath to cover the glint of our extracting blade. But a revival of the liberal project, at a place like Hay where leaders from across the political and artistic spectrum have come to debate and share their visions with the public, could come to exist as a more authentically representative body than anything we have now.

Of course, it would be no more binding than the ramblings of a idealistic blogger. But it could invigorate the notion that as a global community, we cannot afford to leave the decisions of how to rescue our imperiled brothers and sisters to the interest-laden politicians. We must find a way back to each other, back to our selves. And I can't think of a better place for this conversation to start than at Hay.