Toxteth, 1981: the summer Liverpool burned – by the rioter and economist on opposite sides

In an extract from his new book, Andy Beckett gets an extraordinary insight into the 1981 Toxteth riots - from the Liverpool-based economist advising Margaret Thatcher's government, and a rioter enraged by their controversial policies

For much of the postwar period, Britain imported more than it exported. The resulting trade deficits were widely seen as a sign of approaching economic doom; that a once-great trading and manufacturing nation could no longer make its way in the world.

In 1980, this pattern went into reverse. That year, and in 1981 and 1982, there was a rare British trade surplus in goods. Yet the economic commodity most valued by Margaret Thatcher's often struggling first government was still an import. It was not an industrial product, but something much more modern; an intellectual product, a theory - monetarism.

It was like having a case study on your doorstep. You had to be a bit careful, but in many ways it was very instructive

Liverpool's a funny place. There was this feeling": 'He may be in the enemy team, but at least he's in Liverpool!'

In the car, one of the policemen had been making threatening faces and saying things - I was scared absolutely shitless

We'd set cars alight. We wanted to clear the street. You don't do that by asking politely ...

Related: Toxteth then and now: photographs of a bygone Liverpool