Seventy years ago this week, British foreign policy collapsed. Ignoring critics who wanted an alliance with Russia, Neville Chamberlain had been trying to find a modus vivendi with Germany. Eleven months earlier, when he returned from Munich and proclaimed peace, he had been hailed and heralded. But in the interval, his policy had foundered. Hitler was not only set on belligerence, he had secured a pact with the Russians. In late 1939, there was a danger that Britain could have found itself at war with both Germany and Russia. Suddenly, everyone agreed that appeasement had been a disaster, and most of the blame fell on Chamberlain. Those who had cheered him now reviled him. Few political reputations have disintegrated so completely.

Chamberlain failed. This does not mean that he was wrong to try. In 1938, there was no overwhelming moral case for going to war, and certainly not in alliance with Russia. By then, Stalin had murdered many millions of people, while Hitler was still only in the thousands. We were right to fear Hitler more than Stalin, because Hitler was more of a threat to us. But that was about self-preservation, not abstract morality.

It is also important to remember the sequence of events. We did not wage war to prevent the Holocaust: if there had not been a war, there might have been no Holocaust. Admittedly, Stalin could ravage Russia into mass-murder without a war, but in Germany, that would have been harder. Even under the Nazis, civil society was much stronger. It may be that the full hellishness of Hitler's gang could only have manifested itself in the smoke and darkness of total war.

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In October 1938, military calculations were more important than moral ones, and the arguments for and against war were finely balanced. First, it is not clear that the Russians would have been much use as Allies. They had only a relatively short land frontier with Germany, in East Prussia – and Stalin had spent the previous few months slaughtering his general staff and officer corps. The consequences would become apparent during his incompetent campaign against Finland and in the first catastrophic weeks after Barbarossa. In October 1938, we would have been justified in doubting the Russians' offensive capabilities. Second, the UK did not waste the months after Munich. Rearmament gained pace, especially in the RAF, which needed all the time it could get to build up its strength. We could not have won the Battle of Britain in the summer of 1939.

Those who wish to rehabilitate appeasement have to address the problem of Czechoslovakia. She had strong natural defences and factories which produced world-class artillery. On paper, a Czech alliance was a formidable asset. But battles are not won on paper. Would the Czechs have fought well? Or is there a second undiscovered volume of The Good Soldier Schweik, in which Schweik joins the Czech army after 1918 and becomes a field marshal? Even if the Czechs had tried to fight up to their capabilities, their efforts would have been sabotaged by the Sudeten Germans. In 1945, they paid a terrible price for their disloyalty. In 1938, they would have displayed it.

That summarises some of the military debates. But appeasement was not about strategy. The men who advocated it did so because they were desperate to avoid war. One can understand why. The First World War had come close to destroying Europe. There was every reason to fear that a second one would finish the job. There was nothing ignoble about the desire to preserve peace, if at all possible.

It was not possible, and Chamberlain, a pragmatist and a rationalist, was the wrong man to cope with Hitler. Churchill, who constantly chafed at the restraints of the rational and the pragmatic, could bring a demiurge's imaginative range to the task of dealing with evil. But as Graham Stewart demonstrates in his outstanding book Burying Caesar, Churchill respected Chamberlain to the end. The rest of us should do likewise.

Gordon Brown is harder to respect, and that is his own fault. Despite the intensity of the competition, he always manages to be his own worst enemy. Libya is the latest example. Whatever role the Government played in the release of Abdelbaset al-Megrahi, it had a good case, which it now finds impossible to make, because Mr Brown has been weak and shifty.

Twenty years ago, we were virtually in a state of undeclared war with Libya. The Libyans had given a lot of help to the IRA. They had tried to undermine Western interests wherever they could. Margaret Thatcher had allowed American planes to bomb Tripoli from British bases. In her memoirs, she writes that she agonised before taking that courageous decision. She knew it would be unpopular. It was. It was also right, even if it encouraged the Lockerbie bombing.

That was then. Now, everything is very different. There has been a rapprochement. In the course of several slow and suspicious years, the Libyans paid compensation, handed over Megrahi, renounced their nuclear programme, permitted some tourism and showed an interest in economic links with the UK. These are all desirable developments, and not only because they will lead to higher company profits and with them, urgently needed tax revenues. Trade and investment will help to strengthen our ties with Libya, making it less likely that there will be a reversion to the bad old days.

There will still be problems. Colonel Gaddafi is not about to turn into Thomas Jefferson. But we are now in a position where disagreements can be resolved through economics, diplomacy and personal contacts. Saif Gaddafi is a bright and interesting fellow. His friendship with Peter Mandelson should not be held against him.

There was one surviving embarrassment from the difficult years: Megrahi, in prison, dying. Assuming that he is guilty, there were no moral grounds for clemency, but why should morality be the determining factor? Former IRA men serve in the Northern Ireland administration. Senator Edward Kennedy, not too far behind the Libyans in the dishonour role of those who succoured terrorism in Ulster, is treated as if he were worthy of veneration. Yitzhak Shamir, who was involved in the bombing of the King David hotel, went on to become prime minister of Israel. The list could be lengthened.

There is a further point, assuming that the Libyans were responsible for Lockerbie, the decision would have been taken at the highest levels. For the past few years, we have been happy to collaborate with those high levels. As we have been so friendly to the organ-grinder, it is hypocrisy to make such a fuss about the monkey. It is reasonable to regard Megrahi as a prisoner of war, who can now be sent home to die. If the Americans object, remind them that Ted Kennedy never paid compensation.

Suppose Gordon Brown had argued along those lines. Although he would not have commanded universal assent, he would at least have said something. Those who disagreed might have respected his honesty. He could even have come across as decisive. Instead, we have been treated to a dithering, skulking silence, with the details gradually dragged out in leaks. Ministers are acting as if they were ashamed of themselves when, for once, they have no reason to be – unless they are ashamed to be led by a prime minister who cannot get anything right.