The room where we sleep looks out over London. It's on the fifth floor - not very high but enough to get a view of the skyline. This is because London is not a very tall city. For much of its history St Paul's cathedral has been its tallest building. From the end of the nineteenth century until the early 1960s this fact was effectively guaranteed by law.¹ London missed out on the golden age of the skyscraper.

What about the cathedral now? From this room you can see it, but only just. At night its dome is a floodlit crescent stuck between the silhouettes of two black blocks. In the daytime the cathedral is even harder to make out and the two blocks are revealed to be trapezoids, strange obelisks with tops tapering to a sharp point like a stake - like someone had sliced off a triangular chunk. Their shape seems to hover on the edge of the mind's imaginative capacity like one of Escher's impossible drawings.

Although the blocks are glass from top to bottom, at night they are almost invisible. The light from surrounding office buildings is lost in the black glass, which is somehow both all-surface and impenetrably deep at the same time. In offices they leave the lights on for security reasons. If you walk through a financial district at night, you’ll notice straight away how the space grows suddenly deeper. Every glass wall is honeycombed by a thousand neon cubicles. But the two trapezoids are apartments, and they are black at night because the lights are off, and the lights are off because no one is there. This isn't to say that no one owns them; it's just that the owners don't live there. They bought them, at 1 to 6.5 million pounds, as an investment. And so in a strange reversal of Modernist values glass without light turns to oil and materials designed for transparency become opaque.

* * *

In this room there are actually three different views, one for each time of the day. Or rather one for the day and two for the night. From sunrise to late afternoon the room is flooded with clear white light. It's impossible to over-emphasise how different bright daylight is to bright artificial light. A very bright tungsten light will cause the edges of objects to dissolve and make their colours indiscernible. Everything gets bunched together on the red-orange end of the spectrum. Blues are cancelled and yellows and greens lapse into the same brassy glow. With sodium lamps it's even more extreme: walk down a street at night and see if you can tell whether a car is blue or green or grey. Neon has approximately the opposite effect. Edges are sharpened to the point that they overtake the bodies they belong to. Line detaches from volume. Meanwhile colour is flattened into a distinct and uniform factuality, which, like samples on a paint chart, paradoxically ends up in the realm of idealism.

But in the daylight the room is beautiful. Everything is limpid and bright, as if the whole place had risen out of a pool of water. Because the room is north facing, at the end of each day you get to witness the sunset creeping down the reflective surfaces of the buildings. As the north sky gets dimmer, the glass buildings get brighter. A sunset twenty times repeated.

Neon strip lights are what this room was originally equipped with but we tend to keep them off. If they do get turned on - because someone is looking for a key, or a cable at the bottom of a drawer - it's quite horrific, it looks like a prison. So we keep the neons off. Four small desk lamps have taken their place. They're cheap and they work perfectly - like modern-day candles. There is one in each corner of the room, angled downwards or upwards to bounce light off a shelf, a table, or a wall. This is the second view. With eyes conditioned by a vaguely yellow interior, the sky outside is a deep, inky blue. TVs light up the front rooms of the two-up flats in the near distance, which fall away below you like the floor of a canyon before the office blocks rise up on the other side.

In the middle distance - beyond the flats but before the offices - there is a space between two buildings where a train sometimes passes. The track runs from Waterloo, going south and east. So every night we see the commuters heading home to southern counties. In the daytime the trains, like the cathedral, are almost invisible. But at night you see their windows flashing in the gap between two buildings. Further out you can see red lights blinking on cranes.

The third view is when we turn the lights out. This time it's the sky that looks orange. The light pollution turns the clouds a rusty yellow brown. The whole room becomes a kind of lightbox - like a makeshift James Turrell installation. When you lie down for the night all you can see is a shifting wall of light and shadow.

Three white, paper-thin walls, like the walls of a shoebox, the fourth wall faced in glass.

In fact one of these walls we have converted into a great big bookshelf. The boards of the stud wall put up in place of the original partition, offer some soundproofing for us and the next room. So two out of four sides of the lightbox are surfaces of uncertain depth. Together these two altered walls - the glass with its view and the stud wall with its books - structure the conversations and everything else that goes on in the room. When you talk you look out of the window, or else someone grabs a book off a shelf and searches for a line just remembered.

* * *

The cranes on the horizon have recently been getting closer. There is already one on the main road, out the front of the building, and to the right looming in our peripheral vision. New buildings seem to spring up overnight. The foundations take a while but as soon as they are laid the framework is up in a matter of days. For months there is nothing but a hole in the ground, hidden behind a hoarding emblazoned with a name like Galdedale, Hawksworth, McAlpine or Mapesbury. They all sound like knights. Then suddenly four storeys of glass and steel.

If you were afflicted by a special kind of blindness that made colours, textures and proportions indistinguishable, you could at least tell the difference by the swarm of triangular balconies that tend to follow in the wake of the new buildings. Now and then someone will appear on one of the oddly shaped platforms with a cigarette or phone in one hand. It's always a single figure because the platforms can only fit one person at a time. The motive behind their design must have something to do with the fact that these little concrete protrusions offer a suitably extraneous surface on which to work some kind of ornamentation, however minimal, on an otherwise featureless building. So the balconies are set at curious angles and the inhabitants smoke their cigarettes one by one.

In the last four years over 450 planning applications in Cathedrals ward were approved by Southwark council.² This area - the canyon floor below our window - is a kind of no man's land. It sits on the edge of the major centres like a disused car park. In fact, it's a miracle the developers didn't discover it sooner.

Looking north towards the centre, away from the sun and towards its reflected setting, you see: in the east the City, reconnoitred by London Bridge, the Shard now an oversized watchtower on the edge of its territory; to the east Parliament, all spindles and crenulations covering what is essentially a Gothic church with ill-thought out extensions; and straight ahead the Southbank with its chain of broad, low-lying shapes (the Eye a circle, the IMAX a drum, the National Theatre a cluster of cubes).

If you crossed the corridor and looked out from the opposite room, you'd notice, by contrast, the absence of landmarks. Strangely enough it's this view that looks the most modern. It looks like a cubist painting. When the afternoon sun rakes over the rooftops, facets of white alternate with ochre and grey. The rows of terraced houses and council blocks are arranged in plots of repeating diagonals that alternate like herringbone. Mostly they are more of the two-up two-downs seen on the other side, but there also bigger, low-rise flats that jut out like the prow of an oil tanker.

The southern view is modern not because it is built of steel and glass. Mostly it's made of brick, the most available technique (as opposed to material) in the British construction industry. What makes it modern is the pattern and its logic. The logic is in the pattern; in other words the genetic structure of the whole image rather than any particular design feature. Whereas the northern view, the view of the centres, looks like a funfair. All features and no logic.

In itself this distinction doesn't constitute a value judgement. Le Corbusier was a democrat at heart but he was also a Taylorist. Modernism is, or at least was, the aesthetic code of capitalism - of its progenitors as much as its detractors. In other words it belongs to a system, a contradictory whole that includes slippages, diversions, cataclysms and revisions. Corbu's modular man - basic unit of his architecture and graphic symbol of his philosophy - is an emblem of humanism. He can just as easily represent man reduced to a reified fragment.

But the sad thing about the triangular balconies is the way they show that the people who built them can do anything, it's just that they dare not. Their attempts could not even house a modular man.

* * *

Our room with its window is in the middle of all this; halfway between the centres and the first semblance of a neighbourhood. The building is officially artists' studios but clearly lots of people here have made it their permanent residence. On the fifth floor one man has even made himself a de-facto porch by installing a second, internal door. T, our neighbour, followed suit when she re-did her floor, ripping up the grimy carpet tiles to replace them with parquet.  Couples have been seen carrying in four-poster beds under the cover of darkness. And not long ago we could have sworn we heard a baby crying down the end of the corridor.

We're not alone. Right below our window is a two-storey, pebble-dash bunker that looks like it was once an appendage to Weston House, the old office block next to us. It looks like it might have been for incoming deliveries. Or it could have been the data storage centre of an insurance company (there is a high fence all around it). This building is also occupied. It's been supporting several lives for at least three years now. The small windows are crowded by the elongated blades of yucca plants and sometimes the pinkish, pixellated shape of a body taking a shower.

Down a side street, curtains have appeared in the windows of a pub. When they aren't drawn, you get glimpses of laundry racks, posters on walls and stacks of CD cases on the floor. This one has a sign on it, and like the property companies its name is heraldic  - Camelot, protection through occupation. The streets criss-crossing the canyon floor form a network of burrows invisible from our window. The railway bridges that pass through here are very much part of the space. Streets pass under their arches, while balconies make sightlines with the tracks. Carving out depth on a lateral plane, these streets, tracks, arches, are the opposite of the skyline.

Some streets don't seem to have changed for half a century. And there are several prominent buildings from the late 19th century: Peabody estates, Guinness trusts and the workers' cottages of Octavia Hill. From a few decades earlier there is another building, whose name, written in gold on the lintel, is even more arcane that the chivalrous property companies: the Sons of Temperance Friendly Society.³ There's barely any furniture inside and on the few desks, no stationary or computers. Yet it isn't dusty or cobwebbed. The windows aren't boarded up, unlike several nearby housing estates, but we never see anyone enter. It's a relic, but not derelict. Inside it looks like time itself has stopped, and outside, the clock above the door rests at five past six.

The Guinness trusts and Friendly Societies mix with light industry (paper delivery centres, photographic studios, specialist foundries), pubs and a few theatres, which haven't quite shaken off their improvised appearance. This is to make a cartographic/sociological sketch of an area based on the immediately visible and the commonly known. But what really strikes you is the unknown. When you look out at this area, there is no way of knowing what is going on inside.⁴ It's like marijuana growing in a loft; the only way to detect it is its heat signature (that is if you're viewing the world from a helicopter).

* * *

We might ask, at what point did modernity's poles of opposition - inside/outside, knowledge/ignorance, security/danger, legitimacy/illegitimacy - swap places? At what point did the inside become the subterranean chamber of an illicit life, as opposed to the seat of power? The history of modern revolutions as traditionally told is one of people trying to get at this inside: storming the Bastille or the Winter Palace, right up to the day that Nguyen Van Tap drove his tank through the gates of Saigon's Independence Palace. Bob Dylan captured this movement of history when he sang, 'Come Senators, Congressmen please heed the call / don't stand in the doorway, don't block up the hall / […] There's a battle outside and it's raging / It'll soon shake your windows and rattle your walls / For the times they are a changing.'

Today we see more and more instances of people working the other way round, from the inside outwards. Or rather what we see is a reversal of the poles, everything turned inside out. Either the actual outside becomes a virtual inside; marked and inhabited as if it were an inside - as in Tahrir square, Occupy or the Indignados. Or the actual inside becomes a virtual outside; treated like there was no difference between it and the rest of the world, all doors and windows flung open, the whole place subject to an unfamiliar rhythm of comings and goings - as in the occupation of Wisconsin State Capitol, or the student occupations in this country.

In the first case rallies or marches, demonstrations of power, 'rehearsals for revolution',⁵ are indefinitely prolonged. Their inherent temporariness is not abolished but made permanent. Hence the rally becomes a tent city. (In a sense, what we see is the efficacy of false consciousness: believing the temporary to be permanent, willing it to be. Both the falseness and the efficacy of the gesture have something to do with everyday life: the tent as symbol of precariousness, and even as gesture of solidarity, whether genuine, token or unconscious, with the subaltern and the slum city). In the second case we see how the occupation also changes its nature. Formerly it was a tactic for blocking an apparatus, both physically and politically, jamming it up with your own presence, sabotaging a technical or administrative space. Now it becomes a way of transforming private or semi-private space into fully public space, a way of protesting the corroding influence of neoliberalism on public institutions, an attempt to reset the clock on this process, a way of opening up pockets of democracy within a free-market landscape. (Again there is the question of false consciousness. Direct action features prominently in the discourse but the action is certainly less direct than the occupation of a factory or a university's administrative centre). There are many other examples but by their nature they are less visible; they are part of the fabric of a life become precarious.

On its own this history is too crude. There has always been a dialectic of inside and outside. The question is, in what direction is it moving, and at what speed? What patterns of turbulence does it throw up? What twisted, inverted, suspended, cancelled, doubled, or overwrought forms does it create?

* * *

The Guinness trusts and Peabody estates are traces. Built in the wake of Chartism and the Europe-wide crisis of 1848, or, a few decades later amid unemployment riots and the birth of organised socialism, they are the results of struggles that have not changed the whole system but have managed to accumulate some solid and enduring reality in the world, a reality which then goes on living, long after the struggles themselves have died away or been surpassed. Like all struggles the outcome is shaped by contradictory forces. It's true the agitation for housing reform was carried out - at least at a parliamentary level and in the newspapers - by a wide-ranging bourgeois coalition, whose only stripe and colour in common, to all appearances, was opposition to the aristocratic favouritism of the Tory government. At a deeper level the motivations were not dissimilar to the ones that brought the bourgeoisie together in the Anti-Corn Law League: free trade ideologies in opposition to pro-aristocratic protectionism, and the drive to lower real wages by reducing the cost of living. We should also remember that the first wave of 19th century social housing was built in the middle of a long boom, in the 1860s. George Peabody, after all, was an American banker.

But beyond the stated interest in the "moral health" of the population, we can also hear the tremor of fear set off by the sight of that new gathering of the working class, not in the northern factories this time, but in the heart of the capital, the slums of London. At the same time there was a radical side to reformist tendencies and a genuine side to opportunist ones. No question apart from labour itself captured the radical imagination as much as housing: from the utopian socialism of Robert Owen and his model community-cum-factory at New Lanark, to the Chartists' much disputed attempts to return workers to the land, to the romanticism of John Ruskin, Octavia Hill and William Morris.⁶

The canyon below our window, with its burrowed streets and railway arches, is full of these traces. Strange things are buried there and strange things grow there.

Of course not all traces are progressive. Haussmann's city plans, as much as they represent a dramatic burst of modernisation, were intended to prevent the barricades from ever rising again in the streets of Paris. The Champs Elysées is a monument to this feat of counterrevolutionary urbanism.⁷

A friend asks, 'what would you do with the Houses of Parliament after a revolution?' There would be something obscene about setting it up as a new seat of government. (To even think like this is probably to get the wrong idea about how things might or should unfold). 'Maybe you could turn it into a luxury hotel for people working night shifts?' Engineers on the underground, nurses on call, lorry drivers, air traffic controllers, night porters and security guards - all will be welcomed with open arms at the Hotel Parliament!⁸

It was a fun game, and it said a lot about two things in particular: 1. The poverty, or simply the difficulty, of utopian imagination. (Why would you need security guards when most of them are employed to guard the foyers of banks and insurance companies? Could the right combination of resources and expertise not fix our delay-prone transport system once and for all?). 2. Perhaps more interesting, the way a city is full of desire.

Before and after questions of power there is a question of desire. In Camera Lucida Roland Barthes shows us a photograph of a house by Charles Clifford. What strikes him is not the beautiful lighting or the composition, but the simple fact, the simple desire - 'I want to live there'.⁹ For him this is the secret of photography - to pinpoint desire in the world. In the same way, perhaps we can say that politics starts with the way the world becomes animated by desire (starts with it but doesn't end with it).

For example the architecture of the Southbank, which we can see from our window, is called Brutalist and for lots of people this is the cue to reject it. But when I walk past, crossing Southwark or Blackfriars bridge, the Piranesi walkways, windows set deep like a cave's mouth, columns faceted into octagonal prisms, raising up the entry levels, throwing down flights of stairs and making pits in the ground - all these look like places to live in. I want to curl up in one of those windows. The same thing when I look up at a top-floor balcony covered in plants and washing lines, or when I pass a set of headlamps on the other side of the motorway.

Imagine cutting a hole through the interior walls of a row of terraced houses, travelling horizontally to make a tunnel through the different rooms, or rising diagonally, extracting slices of floors and walls as if there were no distinction between them. Imaginings like this are what childhood is made of. Imagine a children's book where one character discovers a key that opens any door, the other a rope that scales any wall. What adventures they would have in this city! One scrambling over rooftops, the other moving through basements and corridors.¹⁰ Or another example:

When I walk past a set of whitewashed windows, the words 'thanks to all our customers' inscribed in the cloudy surface, and catch glimpses through a transparent 'T' or 'O', of piles of unopened letters on the floor, desks with full in-trays, a little flag on one, a model aeroplane on another - as if one morning someone had picked up one of those letters, and, getting no further than the first line, folded it up, put it back in its envelope, turned to their colleague and said, I think we better leave now - then a faint shadow passes overhead, the air temperature increases by one degree and a voice whispers in my ear, I want to live here.

* * *

We are not sure how long this situation is going to last. Our friends in the bunker must feel similar, as the owners of Weston House have recently started destroying the building from the inside out. A couple of months ago they smashed up the stairwells. This is not light work so who knows how they did it so quickly. One evening we came back to find the lower windows cracked by falling rubble - rubble on the inside - and through the broken glass you could see lengths of rebar protruding from the concrete, like the splayed ribs of a side of beef in a butcher's window.

This is a city where one day people are paid to build things up, the next day to tear them down. And still there isn't enough work to go around. It's like one of those cautionary tales about the New Deal that they teach you in school - one set of people dig holes, another fill them in - except here it isn't a matter of trying to rescue a national economy, but rather simple homespun chaos; the atrophy of capitalism in a state of nature.

A few weeks ago some men were on the roof of Weston House. They cut up the big girders supporting the air conditioning system with a gas torch. Then they tipped the metre-long sections one by one over the edge, each one landing in some unseen skip with a great gong that you must have been able to hear for miles around.

* * *

The financial crisis has done nothing to slow the pace of change. If anything things have gotten more frantic.¹¹ At 240 Blackfriars road Great Portland Estates are unlocking potential with 19 storeys of 11,000ft office space. At 167-168, B&W interiors are achieving excellence through evolution, renovating old Friars House, circa 1960. Opposite, 1 Valentine Place knocks spots of the rest with its double height entrance reception. And at One Blackfriars it's their vision and our future. Our room, just down the road, is like a flake of glass floating at the centre of a whirlwind; it floats because it has no inertia and therefore no momentum. It has no friction, offers no resistance. And because it floats, it is a good vantage point for seeing what the centre itself is doing, while everything else is caught up and spun around.

Is it strange that a housing crisis, defined as a chronic shortage of a certain type of building, should look like this? In the last 8 years 100,000 people in London have joined the waiting list for council housing. In the same period general housebuilding in the capital fell by 25%; a mere 630 council houses were built. Today, across England, there are 1 million fewer council and housing association dwellings than in 1980 and 4 million people are on the waiting list.

Two main reasons are well known: the firesale of social housing stock initiated by Thatcher; and the conversion of mortgage lending into a complex, highly speculative branch of the financial sector. Thatcher’s policy was part of a generalised attack on the welfare state, which went hand in hand with a long term suppression of real wages, which in turn led to demand for cheap credit, including, among other things, mortgages. This process fuelled a property boom that has seen London house prices quadruple since the late 90s. Rent in London now rises on average £300 per year.¹²

But a third reason also deserves mentioning: the predominance of financial services in this country and the role of London as a global financial centre. It's not just that banks and insurance companies demand prestige offices in the city centre. Property itself, particularly residential property, has become a major storehouse for assets and a vehicle for investment. Property prices continue to rise, and the highest council tax anyone can pay - in Chelsea and Kensington - is just over £2000 a year, or 0.001% for a £140 million penthouse at One Hyde Park. As long as this formula holds, there is no safer bet. It's this reason, or set of reasons, that does most to explain the frenzy on Blackfriars road.

Yesterday we learnt that Barratt Homes just bought the building. They're not interested in the structure and may not do anything with it for several years. What matters is the few square yards of dirt that it sits on. They own the ground beneath our feet.

* * *

A similar frenzy is taking place on the Southbank. As part of the 60th anniversary of the Festival of Britain, joining seamlessly with the Olympics celebrations, the Brutalist gangways are being encrusted with fake turf, fibreglass mud huts, pink and blue sandpits, shipping containers painted yellow, jumbo bean bags and vinyl decals. There are quotes on the walls from poets of the world. But the Mexican taco stand gives the game away when it spells its name with a 'w' and an 'h' instead of an 'o' and an 'x': 'Wahaca'.

It's right to readdress the jingoistic aspects of the original festival, but the Southbank in its current state shows that affirmation can never replace critique. The demons of a dying colonialism are not exorcised; they are sublimated.

The same goes for modernism. The successes and the failures, the promises and the illusions cast in those blocks of concrete, remain untouched by the coat of turquoise that has just been applied to the spiral stairwell linking ground and footbridge. They want to believe that a colour can summon the object of its resemblance; so they paint the staircases blue like a Californian swimming pool. This is the theodicy of postmodernism, the 18th century doxa that all is for the best in the best of all possible worlds, resurrected for the 21st: Everything which should exist, appears to exist, and everything which exists in appearance, is given reality by divine right.¹³

But in reality there is enough evidence of people disregarding the rule. If you look, you'll find it. Take today, a cold bright day in autumn when visibility reaches a high point for the year. I am on the ground floor, sitting at a table in the well at the back of the building. This space is 30 metres squared of polished wooden floorboards. Two children on scooters are zipping along its inside edge, darting off between tables and chairs, then back again, round and round. Sometimes they will work up such a momentum that they can relax their kicking foot and sit down on the board, which they now ride like a sled, clinging on to the pole of the handlebars. At least the older of the two has mastered this trick. She glances backwards and invites her brother to try it.

On the alcoved balcony hovering in the middle of the space, there are others like me working away on laptops. There is no piped music (the concerts won't start till later) and you can hear the delicate clatter of a thousand keystrokes. They have commandeered a nest of plug sockets meant for the projector mounted underneath.

In the toilets an elderly man is brushing his teeth. He spends half an hour rearranging the contents of his wheely shopping caddy. He takes out plastic bags, shakes them, folds them up very carefully, puts them back. Some of the clothes he has just rinsed go back in the bags, others hang over the frame of the caddy.

In the basement groups of kids (aged, at a guess, 15 to 18) make use of the big mirrors on the walls to practice their dance moves. Like the children in the well they appreciate the smooth floors. From here you get a stadium view of the action. They're almost all undeniably talented. They have the kind of talent that stands as its own defence against doubt. I imagine if a security guard challenged them they would just keep dancing, and the guard would shrink palely away. They bring a pair of computer speakers and an iPod and plug them into the wall. I wonder if the different groups have some kind of agreement about when to use the space.

What is missing from the taco stands and beanbags and mastercard sponsorship thankyous and triangular balconies, is hope. Because what else is hope, if not the courage that comes from knowing one's situation is not fully determined? Postmodernism's obsession with surface is a doctrine of historical fatalism. In place of potential it substitutes the instant; in place of tendency, fact; in place of the critical moment, the timeless style or period. Its eclecticism is not so much a symptom of relativism - for understandable reasons critics often assume this - as of absolutism. In order to fragment, it first has to reify, to freeze a process or a relation into a thing. Only then can it access a suitably brittle material on which to work its logic of juxtaposition and recombination. Maybe this is the difference between the modern and the postmodern. Fragmentation is a feature of the twentieth and twenty first centuries in general, and therefore modern as much as postmodern (think of Dada and Cubism). But whereas modern fragmentation channels the fluid, dissolving, hypertrophic energy of the world, postmodern fragmentation treats the world as a series of homogenous blocks. It regards these blocks from a safe distance, then selects them, plucks bits of them where necessary, takes them wholesale where possible. Modern fragmentation is involved in the dialectic of its own moment. This is not to say that it has the power to fundamentally change this moment; on its own it is powerless; it is the crest of a wave, riding its own dissolution. But postmodern fragmentation is undialectical in principle. It is not involved in an attempt to change its own moment. It repudiates this attempt. The difference, to put it crudely, is one of hope versus cynicism.

Hope is what the kids in the basement have, what every living creature surviving in the ruins has; they know where to find it, like a secret pool to visit and sip from.