<DIV>The respect for religious difference has formed the bedrock of our nation and made equality possible. Yet today we are told that &#8220;moral values&#8221;&#8212;code for a government shaped by religious concerns&#8212;must be the keystone of our social compact.<P>A rich and compelling chronicle of an essential idea, <I>Liberty of Conscience</I> tells the story of America&#8217;s great tradition of religious freedom. Philosopher Martha Nussbaum&#8217;s ambitious book is both a work of history and a pointed rejoinder to conservative efforts to break down barriers between church and state.</DIV>