You're a novelist, not an economist. Why should we listen to what you have to say about the financial crisis?
If you can follow an expert, by all means do. But I think that there is this sort of "two cultures" issue about people who "speak" money and understand money, and those who don't. I think that the gulf between people who just get it and everyone else is dangerous, because democracy
implies the idea of an informed electorate, and I'm not sure how informed we are. And, to answer your question, I think there is something to be said for being in the middle, being able to talk across the gap.
Most of us are financially illiterate, yet we are obsessed as never before by the housing market. It's an odd state of affairs, isn't it?
It is. And I think it's hard to make a case against the idea that the housing market is too important in Britain. I've heard about this person who's a complete master of every aspect of things like buy-to-let, knows the whole market inside out, knows the tax tricks, the stuff you can claim back, the exact implications, street-by-street variations in property prices, what the discount rate against inflation is, getting the yield . . . the whole thing - but he doesn't know what the stock market is.
I think that's a very distinct, British, thing. Do you think home ownership will ever lose its grip on the English imagination?
No, I don't. I think it's hard-wired, and in a funny way it's almost like an abusive relationship: it doesn't cool off when things go wrong. That people are losing money at the moment doesn't put them off houses. That's certainly what happened in the Nineties - everyone was just waiting for the market to improve.
Does housing need to be depoliticised in this country?
I think it's a good idea, but it's hard to envision in practice, because anyone who pays a mortgage has a dangerously vivid reason for being interested in the interest rate. The moving of the Bank of England out of government control is an attempt to depoliticise the interest rate. So, as we can see, it works until it doesn't. And it's difficult to imagine people not caring about what they pay for their mortgages, and not seeing it as an issue that the government is responsible for.
You've said that political rhetoric has changed. What's distinctive about the way politicians talk today?
I think political discourse used to be more value-based. Now, politicians speak much more about figures. It was Margaret Thatcher who changed that. If addressed on a specific point, she would beat her interlocutor up with facts, in a way that hadn't quite been the dominant mode. If you look at the political rhetoric of someone like Churchill or Bevan, there's barely a fact to be seen. And so I think we did move away from a discourse based on values, often collective values, to one based on facts and money.
Your father was a banker. An interesting aspect of your new book - Whoops! - is your mourning for banking of a more traditional sort.
Well, it's interesting that so many of the institutions that blew up here were former mutuals, owned by their members, where the idea was that you got a better rate of return by pooling your assets and pooling the liabilities. I do regret that.
You began writing about this stuff when you were researching a novel. What's happened to the novel?
I finished a draft of it. Normally what happens is I finish a draft of a book and then stick it in a drawer and wait until I can see it clear before going back to finish it. And then I spend three or four months thinking: “God, it'd be great to take up Pilates or learn German." This time I ended up marinating in credit default swaps.
Did you feel you were losing touch with yourself as a novelist?
Not really. Then again, the next thing I wrote was a piece about Lehman Brothers, and I showed it to my wife before filing, and there were about three or four things I needed to explain. I took that as a sign of leading a rebellion and then joining the evil empire!
John Lanchester's "Whoops! Why Everyone Owes Everyone and No One Can Pay" is published by Allen Lane (£20).
