Shand and his wife (played by Helen Mirren) sip Bloody Marys on deck with the rusting machinery of the decommissioned port in the background. Their yacht glides past empty warehouses and idled cranes lining the waterways like funeral statuary. “There used to be eighty or ninety ships in here at one time,” Shand declaims in a speech from the prow framed by Tower Bridge. “Used to be the greatest dock in the world one time, this.” Shand sees opportunity in the decay. His plan? Tap overseas investors to fund construction of a site for the future Olympic Games, greased by favors from crooked local politicians.

  One of Shand’s haunts is a smoky bar with red flocked wallpaper called the Waterman’s Arms on the Isle of Dogs, a part of the Docklands that hangs like an uvula in the Thames. In the movie, Shand’s overseas-investors scheme unravels. But by chance, just months before the film was shot, the very same bar witnessed the birth of a much more successful real-life analogue. Gathering at the pub, a clutch of Conservative politicians set out a proposal not so different from Shand’s: parcel off chunks of London, free investors in those areas from taxes and regulations, and give them subsidies and grants on top of that, to make what had been formerly called corruption into the law of the land.12 The areas would be called enterprise zones. In the Docklands, the zone would turn a working-class neighborhood into a second financial district.

  The lead speaker at the Waterman’s Arms was Geoffrey Howe, a career politician in his fifties with a ripple of gray hair and watery eyes behind rectangular tortoiseshell glasses—a gift to caricaturists. He was the shadow chancellor of the exchequer for Thatcher’s Conservative Party, which would have its breakthrough victory the following year. The world economy was at an inflection point as he spoke. The tables of history seemed to be turning. For five centuries, ever since armed Portuguese and Dutch galleons entered the Indian Ocean, and Spanish conquistadors defeated Indigenous American empires, the part of the world known as the West had stood uncontested atop the global hierarchy. By the late 1970s, though, some saw its dominance teetering. The political scientist Ezra Vogel wrote a bestseller called Japan Is Number One: Lessons for America.13 Britain’s share of global manufacturing fell from one-quarter to a tenth in the first three postwar decades.14 In 1976, the UK went hat in hand to the International Monetary Fund to borrow money—a measure usually reserved for developing countries. Some were projecting a grim future. A strategy document written by a neoliberal think tank wondered whether Britain would have to “start again as a low-wage second-world economy, trying to keep up with Taiwan, South Korea, Hong Kong and Singapore?”15

  For Britain, swallowing the idea that one of its own colonies might have something to teach the mother country about capitalism was a bitter pill. But the surge in Hong Kong’s standing as both a manufacturing center and a site for offshore financial services was undeniable.16 In the second half of the 1970s, Hong Kong had annual GDP growth rates as high as 16.9 percent while the UK’s GDP growth topped out at 4 percent and even went negative a couple of years later.17 Howe pointed out the irony that Hong Kong, the “show-place of enterprise and self-discipline,” was “the child of two parents, Britain and China, which were at almost the same moment plumbing the depths of national humiliation: the one as the ‘sick man of Europe,’ the other as victim of the Cultural Revolution.”18

  China was already emulating aspects of Hong Kong in its coastal experiments. Its special economic zones showed that you did not need to create new nations to have laboratories: you could just carve up old ones. At the pub, Howe began by sharing the radical proposal of the geographer Peter Hall to do just that. Hall contrasted the moribundity of British cities to the thriving hubs of Hong Kong, Singapore, Seoul, and São Paulo. He conceded that they practiced “an imperfect version of Western democracy,” but perhaps this helped explain their success. He pitched a “non-plan”: rather than determining in advance what should be built, a vacuum would be created where something new might arise. British politicians could sequester swaths of inner cities and make them into new “Crown colonies” without any control of the inflow and outflow of people, goods, or money. In his thought experiment, people who opted in would lose their national citizenship and protections but would be liberated to build, truck, and barter unimpeded by taxation or regulation of any kind. The zones would leave the European Economic Community and re-create Hong Kong “inside inner Liverpool or inner Glasgow.”19

  One of Thatcher’s closest partners, Keith Joseph, was humming the same tune. Speaking at a neoliberal think tank in 1978, Joseph was asked whether he would agree to put socialism and liberalism to a head-to-head test by implementing socialism in one place, like the Isle of Wight off the South of England, and laissez-faire on another. He responded that the Conservatives had precisely the intention to designate areas “where the Queen’s writ does not run”: taxation, labor laws, and health and safety regulations would all be eliminated. Instead of offshore islands, though, they would use sites of “inner-city decay.” The audience apparently broke into applause at the idea.20

  The most ambitious aims for the zone were elaborated by the Heritage Foundation’s Stuart Butler, who was also trying to bring zones to the United States to create what one magazine described as “Hong Kong on the Hudson.”21 Butler called the enterprise zone “a political animal.”22 The goal was to create a “frontier community in the heart of a major city” and kick-start a change in mentality in the era of big government.23 Cut loose from the authorities, residents would be compelled to improvise their own solutions. The depth of inner-city poverty was a plus. “Crisis breeds entrepreneurs,” Butler wrote.24 The zone was an experiment in creativity crossbred with desperation. Policy entrepreneurs cast themselves melodramatically as guerrillas of the Right, occupying and decomposing cities zone by zone. One commentator called the enterprise zone a “dagger aimed at the heart of socialism.”25

  Eleven enterprise zones were rolled out in Thatcher’s first budget.26 All were exempted from requirements for local planning approval, freed from local taxes for ten years, and provided capital allowances for commercial buildings.27 In the words of the historian Sam Wetherell, they “pierced holes in Britain’s national economic fabric, briefly allowing aggressive free market capitalism and a regulatory social democratic economy to live literally streets apart.”28 Despite the hype, the results were disappointing and showed little evidence of new investment.29 Business mostly shifted around, moving to zones to chase tax breaks while landlords jacked up rents to get a piece of the action and investors found ways to lower their tax bills.30 BUY A BUILDING FOR FREE, read one headline wooing investors into the zone.31 HOW TO BUILD A TAX HAVEN read another, and meant it like a good thing.32 Thatcher’s advisor Alan Walters (another Mont Pelerin Society member) said they’d like to turn Britain into “one big Enterprise Zone.”33 But if tax dollars were being drawn from one part of the economy to pay for the other, whom would that leave to pay the subsidies? The government’s own consultants conceded that “only some areas can get priority.”34

  The zones seemed like window displays—Potemkin villages of the free market.35 But what if we took Butler’s idea of the “political animal” seriously? One geographer proposed that the zones were experiments in statecraft more than economics.36 The zone was not a non-plan at all. It was a plan of its own. The innovation was the way it short-circuited local government and handed control straight to developers. The facsimile of Hong Kong proposed first by Hall and Howe was one of grassroots commerce. What succeeded was arguably a more enduring version of the colony built on a close partnership between real estate developers and local government to create “landing strips for highly mobile financial capital.”37 The historian Perry Anderson recalls an episode at the World Bank when Walters praised Hong Kong as the “freest society in the world.” When the eminent statistician Angus Maddison interjected that it “doesn’t even have elections,” Walters replied with a “beatific smile” and said, “Yes, that’s just what I meant.”38

  2.

  In 1985, the opening scene from The Long Good Friday came to life as maquettes were unveiled for a complex in London’s Docklands atop the old West India Docks on the Isle of Dogs. Covering seventy-one acres, with ten million square feet of office space, the original plan included not one but three of the tallest skyscrapers in Europe and was billed as the largest real estate development in the world. The project brought together the starchitect studio of Skidmore, Owings & Merrill—which had built the Sears Tower in Chicago the decade before—with I. M. Pei, whose Bank of China Tower had just broken ground in Hong Kong. It was called Canary Wharf after the warehouse that once held fruit shipped from the Canary Islands.39 The architects claimed they were gesturing to the traditional urban fabric of London. Unlike Paris, Vienna, Budapest, or Madrid, with their grand boulevards climaxing in monuments, opera houses, and museums, London was more hivelike. It looked in toward squares and parklets.40

  Others saw a different template. One critic saw a “virtual carbon copy” of Exchange Square, then still under construction in Hong Kong’s Central District.41 The megaprojects resembled one another as clusters of glass skyscrapers constructed around an open space, but the similarities reached indoors too. Exchange Square was built to accommodate the Hong Kong Stock Exchange’s shift to electronic trading. The same shift was happening in London, driving people out of the cramped, historically protected buildings of the City of London. Built around central elevator shafts, those buildings could not accommodate the demand for the vast floors of monitors and cooling systems for the new age of “electronic banking.”42 The move to computer trading called instead for flexible layouts and raised floors for running cable and wiring workstations.43 “Hong Kong Central today is exactly what Docklands is supposed to become in the third millennium,” the critic wrote, “a new financial city; a bridgehead for American money in Europe just like the bridgehead for American finance half a world away.”44

  What he did not observe was the further similarity in the way the two complexes had come to be. In the Hong Kong model of “administrative absolutism,” appointed officials and representatives of big business made the decisions with no input from ordinary residents. Canary Wharf built in a similar mechanism. Because it was an enterprise zone, an entity called the London Docklands Development Corporation, headed by figures from real estate, could bypass local government, forgo the usual planning permission, and ignore the housing needs of residents.45 The corporation’s first director was not coy about his contempt for what he called the “surplus population” of existing residents—and he didn’t have to be.46

  Developers were given deals too good to turn down: land at a sixth of market value as well as promises of state investment in infrastructure.47 In 1986, the first flights landed at the newly constructed City Airport in the Docklands. A few years later, a new train line opened that would take you from the Docklands to the heart of the City in under ten minutes.

  Canary Wharf laid down a marker on London’s future. It was a symbol of the UK’s drift away from where it had been since the Second World War, namely a country defined by manufacturing and even agricultural self-sufficiency. Before the war, Britain had been a trailblazer of globalized trade. At the start of the twentieth century, it imported almost all its food, right down to eggs.48 After the war, there was a shift to more production for local consumption. London’s Royal Docks closed down because of containerization, but also because grain silos weren’t necessary when wheat was being grown at home.49 This self-sufficiency faded in the 1980s, as the UK once again began to import more than it exported. The country that had been the “most manufacturing-intensive economy in the world” began to do other things.50 Chief among those was the business of finance. By 1991, there were more people in office work than in manufacturing or agricultural production.51 “The London that had traded things,” one historian writes, “became the London that traded money.”52

  The zone may have been a dagger aimed at the heart of socialism, but socialism did not go down without a struggle. The strongest opposition came from the city government itself, the Greater London Council (GLC), which became the standard-bearer for a socialist vision of London after the election of left Labour politician Ken Livingstone in 1981. If Thatcher’s government drew lessons from the economic dragons of the Far East, the “new urban left” of the GLC practiced a different kind of internationalism. They sought to create links between the recent immigrant communities in London with the older working class.53 The GLC saw the neighborhood as a place where small versions of the future could be made, what are sometimes called prefigurative politics. An early success came on Coin Street, across the Thames from the financial district of the City, where they were able to block the plans of a developer and claim the land for a community trust, given to local residents to develop in their own interests.54 The group organized clerical workers in the City of London and even mobilized to have the anachronistic medieval government that ruled the financial district abolished.55

  The Docklands was another focus of their efforts. The GLC funded a People’s Plan Center to gather alternative visions of reviving the docks beyond the plans of high-profile developers.56 They used grassroots outreach, showing up at bingo sessions, toddler groups, and the few remaining factories to gather input for the plan. In 1984, the finished version was delivered to every household in the Docklands. The People’s Plan expressed the hope that there be “more to our working lives, and our children’s, than being porters and lavatory attendants for passing businessmen,” imagining instead a way of restoring small-scale manufacturing and reviving the docks, a proposal seconded by an outside consulting firm.57

  The alternative vision of London was a thorn in Thatcher’s side.58 Her response was to counterattack. At the Conservative Party conference in 1983, the Tories included a new demand in their manifesto: eliminate the GLC. Party chairman Norman Tebbit put the rationale in plain terms: the GLC stood for the “divisive version of socialism [that] must be defeated. So, we shall abolish the GLC.”59 Another MP was even more graphic. Saying the GLC had developed “into a monster,” she added that “the only way of dealing with that monster was to slay it, to kill it.”60 Five metropolitan councils in other cities were abolished at the same time and a limit placed on the amount of revenue local government could raise through taxation.61 Local government, and the platform it offered for the revival of the British tradition of municipal socialism, was deliberately hobbled. Usually synonymous with breaking unions, Thatcherism was also about breaking local government.

  We often think of the 1980s in terms of the struggle between the state and the market. But this doesn’t capture the dynamic at all. Thatcher’s government and the GLC were both part of “the state.” Where they differed was in their conception of what the state was for. The urban new left had their share of skepticism about the benevolent role of government; sometimes they referred to what they were doing as operating “in and against the state.”62 But what matters is where decisions are being made—and in whose interest they are being made. Thatcher’s evaporation of the GLC removed the largest urban government in Europe at the stroke of a pen.63 It was a coup from above. In its aftermath, the path was clear for a new vision of the city to be rolled out with less obstruction.

  3.

  By century’s end, Red London was on its knees and finance was ascendant. Recovering from a stumble after the Black Monday stock market crash of 1987, by the mid-1990s Canary Wharf stood as the City’s double, a glistening monument to the new metropole. Estimates suggested the developer had used the enterprise zone status to secure £1.3 billion in tax breaks and infrastructure for a supposed “paragon of free-market urban revitalization.”64 Its central structure was One Canada Square, a fifty-story skyscraper capped with a pyramid designed by another of the era’s star architects, César Pelli. When Prime Minister Tony Blair hosted French president Jacques Chirac on the thirty-eighth floor of the building, they looked down on streets named after famous settlers of the Americas—Columbus Courtyard, Cabot Square—as well as on the site where Blair, like Shand, planned for the Olympic Games.65

  If London had gone from trading things to trading money, now it started trading space, as real estate—and housing in particular—became a new global asset.66 Homeownership became depersonalized and tradable, set adrift on waves of global supply, demand, and speculation. By the new millennium, there seemed to be no alternative but to surrender to the model of “municipal mercantilism,” parceling off ever more parts of the city to offer ever more tax breaks and public subsidies for new towers.67 The shift was evidenced by the fact that the leftist Ken Livingstone himself returned to government as the mayor of London and became a leading promoter of the private tower in the zone.

  The world built skyward after the year 2000. In the first fifteen years of the new century, the number of buildings over two hundred meters globally more than tripled.68 Part of the push came from money seeking a refuge. The 2003 invasion of Iraq by the United States and the UK helped drive oil prices upward, boosting profits for oil-producing states, which invested in real estate through massive sovereign wealth funds. By 2005, Russian oligarchs seeking places to park their wealth overseas earned Britain’s capital the nickname Londongrad.69 In a symbolic moment, the oligarch Roman Abramovich bought West London’s Chelsea Football Club in 2003. China’s precipitous rise also meant more money looking to get out. The 2008 global financial crisis—itself a product of overleveraged speculation in the housing market—deepened a sense of volatility and instability. With zero interest rates, money was cheap and it was seeking, as it does, high profits, low risk, and governments willing to make this happen.

  Britain was eager to oblige. A small number of luxury districts came to be seen as unassailable “safe havens” for mobile wealth.70 London was the “unrivalled king of the global property league for the super-rich.”71 From 2009 to 2011, £8 billion of London real estate was purchased through the British Virgin Islands alone; by 2015, an astonishing £100 billion had been purchased from offshore.72 In 2012, scholars found, “85% of all high-end residential real estate in London and 50% in New York were bought by foreign buyers.”73 In many cases, this was housing in name only, as many practiced “buy to leave” with the units left empty. “We’ve been building the world’s most expensive safety deposit boxes,” one real estate consultant said in 2017. “You just put your valuables in and then never visit.”74 In 2015, a Labour MP condemned the “global superrich” for buying “London homes like they are gold bars as assets to appreciate, rather than homes in which to live.”75