First of all explain a bit about your background

 
I was editor of Marxism Today from '77 to '91 before that I was academic at Bristol University and took my doctorate at Cambridge.
 
Marxism Today was extremely influential in its time and was associated with three fundamental propositions. One was that it recognised from 1977 onwards the novelty of Thatcherism, that it was a new kind of phenomenon. Most thought that it was just a rawer form of Toryism: they were wrong. It was new. The term Thatcherism was first coined in January 1979 in an essay by Stuart Hall in Marxism Today.

Second proposition. At that time the great majority on the left thought the labour movement was on the rise and believed that the march of progress was inevitable - that history was on their side. Our proposition was that the labour movement was in decline. We contradicted the conventional wisdom. In fact, the left was on the eve of the most fierce decline and its executioner was Thatcherism.

Third proposition. In 1988 we produced an edition called New Times which argued the world had been through a profound change with globalisation and post-Fordism. Thatcherism's historic achievement had been to recognise that process and to claim it for the right. At that time, the left hadn't even really clocked the changes, alas.
 
Although we closed the magazine in 1991, we produced a special one-off edition in 1998. On the cover was: Blair Wrong. It was our assessment of New Labour. Some had claimed that Blair was in some way a product of Marxism Today. Certainly he recognised the changes that had taken place such as globalisation. But rather than seeking a different kind of response to them he simply acquiesced in Thatcherism: that acquiescence was the defining characteristic of New Labour.
 

What else did you used to do?

I used to write a column for the Sunday Times and a weekly column for the Times and I was deputy editor of the Independent and the co-founder of Demos.
 
But from '93 onwards my interest shifted to East Asia particularly China. And out of that interest now comes a new book which I've written and which is due out on 25 June. It's called When China rules the world: the rise of the Middle Kingdom and the end of the Western world.
 

What do you hope will emerge from the economic crisis?

 
The left is very fragmented and does not have a strong sense of itself anymore. It's much more polycentric than it used to be. I suppose that has advantages but there are also a lot of disadvantages.
 
This is a situation in which an inchoate shift to the left is taking place – popular opinion has turned on the citadels of neo-liberalism, chiefly the banks.
 
There's a turn against the gross inequalities and gross privilege that have characterised the neo-liberal era. Furthermore, there's an almost universal belief that there's only one body that can sort this out and that's the government. That’s a fundamental shift because for over thirty years people have believed the opposite: that government is ineffectual, even obsolescent, while the market and private enterprise are dynamic and operate in the public interest. They don’t think that now.
 
The striking thing, however, is that the left has had precious little to do with this shift – it's not like the 1970s when the old system ran out of steam and was undermined by the rise of Thatcherism. The whole thing has imploded but not thanks to the left.
 

So if Keith Joseph were the intellectual underpinning for Thatcherism, where should the left now turn?

 
 
I read Willem Buiter's blog on the FT. I'm an avid fan of Robert Peston. I read Martin Wolf. I read Paul Krugman and Joe Stiglitz.
 
The most insightful analysis is coming from the mainstream, though of course Stiglitz and Krugman are on the left of US politics. New Labour was – with Thatcherism – one of the architects of the neo-liberal order so it is trapped in and by its own past, still stuck in a world which has now collapsed. It speaks with a forked tongue – it's trying to break free but by and large it's still bound to the past.
 
The left doesn't have the answers. The New Labour project has been in hock to all this stuff. We need the broadest possible discussion and the New Statesman could play an important role in this. We need lots of centres of discussion and debate that reach into the mainstream.
 

Will Labour win the next election?

 
It's not impossible but the odds are very much against them. Normally the party in office which has been responsible for the previous 10 years would pay the price and the fact the Tories would have done the same things does not in any way vindicate Labour.
 
It seems to me they don't have the courage to break with the past properly. If Brown said 'mea culpa – this is what I thought, this is what we all thought. I was wrong and so was everyone else. Now I see things much more clearly...' I think people can warm to this kind of honesty. That combined with a much clearer and bolder break with the past. The problem with New Labour has been that it only ever showed courage when it was fighting those that were weak. When it came to powerful vested interests then it was utterly cowardly; indeed, it worshipped them. Blair loved money, wealth, the City. New Labour connived in inequality. New Labour had no political courage and Brown, Darling and the rest are products of that.
 
The government should nationalise the banks. The logic of this situation demands it. They should do it Swedish-style, a short-term measure, until the financial system is working again. And they must introduce a new and very strict system of regulation. Banks should be boring. Bankers thought they were so smart and clever but they've been Class A idiots.
 

How long will the crisis continue?

 
I don't see any end in sight to this – this will be a depression not a recession. The effects are only just beginning. The people who will pay for the irresponsibility will not be the bankers in front of the select committee – they're alright, they've got plenty of money. The people who will pay are the ones without the resources who then lose their jobs, their homes, their hopes and in a way part of their lives. That's the price that will be paid – the cost is in lives.
 
What also concerns me very much is the global problem. The crisis of the 1930s was partly a crisis of Britain's decline. Britain was the world’s financial centre but it could no longer sustain its role. In 1931 the gold standard collapsed and with it Britain’s dominant role. But the United States was not yet in a position to support a new system. So in the 1930s the world became balkanised into regional currency and trading groups. A global solution proved impossible. In some ways you've a similar situation now – this is a crisis which is in part caused by the decline of America.
 
It's no longer able to sustain the post-1945 Bretton Woods system, with the IMF et al. Economic power is shifting remorselessly to the developing world. This is the most important shift in over 200 years. The new giants are countries like China and, in time, India. China will in due course usurp the US’s economic role. But it is not yet willing or in a position to do that. We are living in a period where the old dominant power is no longer dominant and the new rising power is not yet able to be dominant. Such situations are generally unstable. That is a cause for considerable concern. It makes a global solution much more difficult. 

Don't miss Martin Jacques' essay in this week's NS