"What does n****r mean, Daddy?"

"It's a disgusting word, darling. A nasty, ugly word. I don't want you ever to use it."

"But what does it mean?"

Eight-year-old children can ask tricky questions, but it's best to be straight with them.

"Some people use it to be hurtful to black people. Other people just use it to show off. But they're really just showing that they're idiots."

"But I've only ever heard black people saying it."

Tricky. Having just told my daughter that something was off-limits, was I immediately going to backtrack? Was I going to introduce an eight-year-old to the idea that, at least in this context, it is okay to judge people differently because of the color of their skin? To try to tell her that Jesse Helms using a racial epithet was not the same as Jesse Jackson doing so? (Remember Jesse Jackson's furious whisper, caught on a TV microphone, about Barack Obama "telling n*****s how to live"?)

No. Good manners, I felt, were absolute: They were not dependent on your physiognomy.

"Darling, have you ever heard a black friend of yours use that word?"

"No."

"Or a black friend of Mummy and Daddy's? Or any of the black people you know at church?"

"No. I only hear it on TV and in music."

"Right. It's not a word that decent people use. It's a word for idiots. They can be white idiots, or they can be black idiots. But if they use a word like that, they're not being clever or kind."

That awkward conversation came back to me last week, when a British Conservative MP, Anne Marie Morris, was recorded using the phrase "n****r in the woodpile." She certainly wasn't being clever or kind. In fairness, she doesn't seem to have been trying to be provocative either. The phrase slipped out inadvertently in a discussion of trade policy, and she used it to mean "a fact that ought to have been disclosed."

When the recording emerged, she apologized furiously, though that didn't prevent the Conservative Party suspending her. While she may have intended no offense, it was an extraordinarily thoughtless lapse.

Several commentators have jumped on the incident as proof of their conviction that the Tories are irredeemably racist and that British society is shot through with prejudice. I'd say it shows precisely the opposite.

That using a racial slur now triggers an immediate sacking tells us something about how the mood has shifted over the past half century. MPs can get away with lying, voting hypocritically, betraying their friends, cheating on their spouses, making extravagant claims on their expenses – all these things have happened without anyone suggesting that they be suspended from their parties. But the n-word, even when it slips out in an archaic phrase, is an immediate career-killer.

Think how race relations have improved over the past couple of generations. On almost every measure, Western societies have become more tolerant. Racial violence has declined. Lynchings are part of an almost unimaginable past, and ethnically-motivated assaults are at an all-time low. The legal and quasi-legal forms of discrimination and segregation that persisted into the 1960s have been dismantled.

On every test of public opinion — readiness to live in multi-ethnic neighborhoods, approval of mixed marriages — we have become more fair-minded.

Words matter, too, of course. But the sheer newsworthiness of this recent case tells us how shocking the use of racial epithets has become. In general, our policing of language is now about terms that have become stigmatized rather than terms being used with bad intent. In his 2004 book The Blank Slate, the linguist Steven Pinker observed that there was no intrinsic or philological reason why, say, "African-American" was acceptable but not "Afro-American", or why "People of Color" was acceptable but not "Colored People." We would have truly transcended racial problems, he argued, when the preferred terms no longer had to be updated.

To repeat, politeness matters. Avoiding phrases that have become tainted, albeit by association rather than from malice, shows basic consideration. Perhaps our squeamishness about language is an overshoot. But if a dose of political correctness is the price for having got rid of Jim Crow, I'd say it's a price worth paying.

I just wish we could drop the mandatory pessimism, the required pretense that we live in unusually racist societies. Our ultra-sensitivity is in fact proof that there has never been a time when racial prejudice was so out of fashion. It's not just Miss Morris' ugly phrase that has become antiquated. It's the worldview that sustained it.

Dan Hannan is a British Conservative MEP.