CB

It’s definitely our perception that the Labour leadership has a strategy of presenting a moderate front. We hear all this talk of John McDonnell going round the City of London to sit down for cups of tea and try and reassure the capital markets that they’ve got nothing to fear — that it’s all a question of public investment that will stimulate the economy and that this will be good for them, that there’s no tricks up our sleeves, that we won’t have capital controls and so on.

That’s an understandable political calculation, given the risk of backlash from the financial markets, which could destabilize a Labour government. That’s clearly the scenario they’re trying to avoid. Thatcher also said there’s no point embarking on a battle unless you’re reasonably confident you can win.

My thinking shifted as I wrote the book. I went into it thinking the City of London is the equivalent for us of what the unions were for her — the Death Star, the powerful elite we need to take on. A radical agenda for banking reform would involve things like forcing the separation of retail banking from investment banking, breaking up the big banks, taking banks into public ownership or doing more with those already in public ownership like Royal Bank of Scotland, imposing much stricter regulation on banks’ more socially-damaging activities, and supporting community banks as alternative. My view would have been — you’ve got to go ahead with that on day one, when you have most political capital, or it’s never going to happen.

But I think the lesson of the Thatcher offensive — and perhaps this is what Labour is thinking now — is that if you do try and do all that on day one and you’re not ready, and those institutions have the economy by the jugular (as Ridley said of the public sector unions in the 1970s), all you do is destabilize your government and the economy, and you can’t implement the rest of your program.

Instead, what you need to do first is build up the power of public banks and reduce the power of private banks, creating a situation where the economy as a whole is less dependent on finance, so that you are in a position to provoke that confrontation at a time when it’s politically and economically opportune and you can win. Our fear is, if that’s not happening, then that confrontation gets postponed indefinitely.

The financialization of the economy and the power of the City is such a fundamental part of our economic malaise and the skewing of power and control in the economy that we’re skeptical it would be possible to implement a radical economic program while leaving that untouched. So that confrontation might be our equivalent of the miners’ strike.