Photographer Martin Parr spent two years in the Square Mile. John Lanchester relishes the chance to get a glimpse of this secretive world • See more of Martin Parr’s photographs of the City of London

Outsiders feel confused by the City of London. They are right to: it’s complicated, because when we refer to the City with a capital C, there are two different, overlapping entities involved.

The first is the City in the sense of London’s financial centre. This used to be a coherent geographical entity, located in the Square Mile, with St Paul’s more or less at its centre. The Square Mile is still a big deal in the world of banking and finance, but when people talk about the City in this context, they now include the other bits of London that deal with money, among them Canary Wharf (where a number of the big banks are) and Mayfair (where the hedge funders hang out).

The City in this broader sense has for centuries been one of the most internationally connected parts of the country. Indeed, that international network was its main asset. Britain had an empire, and the world’s most powerful navy, and as a result an international system of trade and finance, with three main components: importing goods such as sugar, tea and coffee; re-exporting them, often to Europe; and using the closed network of the empire as a favourable market for British manufactured goods.

The City was central to all this, a globally unique cluster of expertise and capital. Big bang, near-total deregulation and the City’s consequent opening up to foreign capital by Mrs Thatcher in October 1986 was the culmination of this long-standing theme in British history. It was an event with huge consequences, which turned the power of finance into a monster, looming over the rest of the British economy; but it was also consistent with this old theme of internationalised, globally networked capitalism, with the City of London at its heart.

Looking at Parr's photographs, you might find yourself asking: why are these people dressing up all the time?

I’ll call that City 1. The other thing people are talking about when they refer to the City of London is the body that runs it: the City of London Corporation. Let’s call this City 2. This is the City of these photographs, and a very strange place it is, too. The photographs are part of Martin Parr’s long-term project to study the British establishment. (“I’m currently doing Oxford and I’ve done a couple of public schools,” he tells me). The City series is the first fruit of this longer scheme. It might seem a surprising subject for a man who sees common humanity wherever he looks. Parr is interested in Englishness, and eccentricity, and in people whose preoccupations create a world of their own. “I’m a nosy person,” he says. “That’s why I’m a photographer.”

City 2 is the body that runs the Square Mile. It is, as the corporation’s website tells you, “the oldest continuous municipal democracy in the world and predates parliament”. That’s predates in the sense of “is older than”, though to many observers the City also has a predatory, antagonistic relationship with the rest of the UK’s body politic. The City has its own form of democracy, one in which the majority of votes are controlled by corporations rather than by individuals. It is both a city and a county; it has its own police force, and owns and develops properties beyond its boundaries. (The City of London runs Hampstead Heath.)

Facebook Twitter Pinterest Members of The Company Of Watermen And Lightermen, Lord Mayor’s Show, Guildhall, City of London, 2014. Photograph: © Martin Parr/Magnum Photos

City 2 is rich and powerful, immensely so: its budget for this year is £372m, including a contribution of £2.6m to top up its cash reserves. The City Fund has assets worth £1.05bn, and a separate City’s Cash fund with assets of £1.8bn. (These figures only became public knowledge in 2012, after scrutiny by the Occupy movement.) That’s a lot of money for a council that, at the time of the 2011 census, had only 7,400 actual human residents.

But then, human residents aren’t what the City is really about. In his fascinating and horrifying book Treasure Islands, a study of tax havens around the world, Nicholas Shaxson makes clear that the outsider’s bafflement at what the City does is perfectly justified. “You could read every page on its website for days, and still not find a satisfactory answer to the question, ‘What is it?’, except that the corporation is the local government of the Square Mile.” Much of the City’s activity is focused on lobbying for its own interests. It even has a permanent official in both the House of Commons and the House of Lords whose job is to make sure that no legislation is passed detrimental to the City’s interests. He has a wonderfully Gothic job title: the Remembrancer.

Looking at Parr’s photographs, you might find yourself asking: why are these people dressing up all the time? The answer is that City 2 has an immense amount of ceremony and ritual, most of it completely opaque to outsiders. “I still get confused about who everyone is and how it all works, aldermen and freemen and sheriffs and all that,” Parr says. The Lord Mayor’s Show is the annual climax of this ritual: according to Shaxson, it’s the world’s oldest civic procession, and was the first outside event ever broadcast live on TV. (The City’s Lord Mayor, by the way, is not to be confused with London’s mayor. The current holder of the office is the hereditary peer Lord Mountevans.)

But the Lord Mayor’s Show is only the tip of a ceremonial, processional iceberg, as Parr’s photographs show. There are 108 livery companies in the City, all of them with traditions, rituals and costumes of their own. “It was very white, very middle class,” Parr tells me. “The liveries are interesting, because they’re very wealthy and they give a lot of money away, yet there’s all this banqueting and feasting. The City is a very modern place and it’s also very feudal.”

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Some of the ritual looks incomprehensible and some of it looks lethally dull: quite a few people look deeply bored. And some of it looks fun: “swan upping”, for instance, is the odd-sounding term for the capture and release of swans on the Thames as part of the annual swan census. As the British monarchy explains on its website: “This historic ceremony dates from the 12th century, when the crown claimed ownership of all mute swans. At that time swans were regarded as a delicious dish at banquets and feasts.” I like the “at that time”, which makes it clear that their majesties have stopped scoffing swans at banquets, while also making it clear that if they wanted to, they legally could, and it would be none of our damned business.

Facebook Twitter Pinterest Trial of the Pyx, Goldsmiths’ Hall, 2014 – where newly minted coins are checked; the Pyx is a chest the coins are carried in. Photograph: © Martin Parr/Magnum Photos

This isn’t just a peculiar subculture with no relevance to anything else. To be elected to any role in the corporation, you have to be a freeman of the City, nominated by an alderman, and the livery companies have a big say in all stages of that process. Other countries have versions of City 1, the financial centre – New York, Hong Kong, Singapore, Shanghai, Tokyo – but nobody has anything resembling City 2, the corporation with a 1,000-year history of being a legally separate entity that puts its own interests first.

The two Cities overlap. City 2 is, to all intents and purposes, impossible for an outsider to understand, or penetrate. The opacity and complexity are not accidental, and do a lot to serve the interests of City 1, which is, among other things, the world’s leading centre for offshore capital, much of it stolen, much of it hidden from all governments and tax regimes via the use of trust mechanisms.

I didn't realise how powerful the City is until I gave evidence for the Occupy movement

It’s difficult to stress just how opaque, how closed off, this system is. Anyone can prove this for themselves by going anywhere in the Square Mile, standing in front of a building and taking out a camera. Within seconds, a security guard, or guards, will come out and ask you to move on. The requests will rapidly escalate in force. Anyone who’s tried filming in the City will have had the experience of being bounced by bank security. Paul Mason launched into a famous rant in 2014, standing across the road from RBS, about how sick and tired he was after six years of reporting on bank scandals: “If the banks had the same scrutiny over the traders and their own managers as they have over the camera crews standing outside… we might not be in this situation.”

I must admit that I didn’t realise how powerful and secretive City 2 is until I gave evidence for the Occupy movement during their eviction proceedings at the high court. The Corporation led the legal charge against Occupy, whose response was to draw attention to the extent of City 2’s unaccountable power. Under the heading Democratise the Corporation of the City of London, they listed demands including:

“The city can no longer be tolerated as a state within a state governing above and beyond the authority of parliament. Standing in the tradition of Clement Attlee, we demand:

1. An end to business block votes in all elections.

2. Democratisation of the City’s political institutions.

3. Abolition of the office of Remembrancer in the House of Commons.

4. Abolition of existing secrecy practices within the City, and total and transparent reform of its institutions in order to end corporate tax fraud.

5. The City of London police to be decommissioned and its officers brought under the jurisdiction of the Metropolitan police force.

6. Abolition of the office of Lord Mayor of London.

7. A truth and reconciliation commission to examine corruption within the City and its institutions.”

None of that has happened, or shows any sign of happening. City 2 won that round.

This struggle, however, is not going to go away, not as the gap between the world of finance and the rest of society continues to grow. In the meantime, the City sees no reason to change its ways and will continue on its uniquely closed, uniquely powerful, uniquely unaccountable way. I am a little envious of Martin Parr. The level of access implied in his photographs is one that no writer or journalist will ever – ever – get. You should enjoy his pictures, and make the most of the insight they give into this particular piece of British life. You’re never going to get a closer look.

• John Lanchester is the author of the novel Capital, and Whoops! Why Everyone Owes Everyone And No One Can Pay.

• Unseen City: Photos By Martin Parr is at Guildhall Art Gallery, London EC2, from 4 March. Parr’s work also appears in Strange And Familiar: Britain As Revealed By International Photographers at the Barbican Art Gallery, London EC2, from 16 March, and The Rhubarb Triangle & Other Stories at the Hepworth Wakefield until 12 June.

• This article was amended on 23 February 2016. An earlier version said the City of London owned Hampstead Heath; it manages the heath but does not own it.