Peter Carey's latest novel - Parrot and Oliver in America

The truth, of course, is that history happens, for although this "unreliable history" may sound like a children's book it's actually a playful reimagining of the French historian Alexis de Tocqueville's journey through the fledgling Union and the creation in 1835 of his Democracy in America – a book, Carey points out, that is forever being quoted by both Left and Right in the United States.

"They quote him mostly to prove that a French aristocrat understood American democracy," says the Australian-born two-time Booker Prize winner who, dressed in several shades of black, is curled like a comma on a white sofa in the airy SoHo loft that he shares with his third wife, the British editor and publisher Frances Coady.

"You read Democracy in America now knowing about George W Bush, knowing about Sarah Palin, and you realise that this French aristocrat has imagined this possibility. De Tocqueville was amazingly intelligent and prescient," says 66-year-old Carey, hence those marvellously ambivalent final lines given to Parrot, who finally buys into the American dream.

One John Larrit – "part footman, part adventurer, part spy and part artist, in many ways the resourceful, cunning servant of old comedies and picaresque tales" – known also as Parrot or Perroquet because of his rare skill as a mimic, reluctantly accompanies Olivier-Jean-Baptiste de Clarel de Barfleur de Garmont on his journey to the New World.

In Carey's extravagant reworking of de Tocqueville's travels, the character of Olivier is based on de Tocqueville but is most definitely not de Tocqueville. Nonetheless, like the great political thinker, Olivier is a scion of an old Norman family, the traumatised child of survivors of the Revolution.

"I believe this really is a new insight into de Tocqueville, that he was the child of survivors of the Terror. Many of us know people who are children of Holocaust survivors and we know what that has done to them and how extraordinarily difficult and particular those lives are. So Olivier is the child of survivors, too.

"It seems to me – I don't speak French so I read de Tocqueville in translation – that no-one has written about this. That discovery excited me because I felt I understood how the historical character got to be the way he was.

"Parrot and Olivier, though, really are an argument about the nature of American democracy – and I guess I am the cheeky, chippy chappie Parrot figure because he's much closer to my own cultural history and class."

Carey, who first won the Booker Prize in 1988 for his novel Oscar and Lucinda and who has been based in New York for 20 years, says: "When you've lived through the years of the Bush administration and at a time when we are all more and more aware of swimming in a sea of cultural crap and you see de Tocqueville worrying about these very things, it's astonishing."

As an Australian and "a foreigner" in the States – despite holding two passports, one for each country – Carey says part of him wants to dismiss de Tocqueville as a snob, "the sort of aristocratic snob who says to someone like me that I should not be born and that I should not make art". But another part of him identifies with the philosopher who worried about a future under majority rule.

"Boy, it sounds reactionary to us, doesn't it? But what he's saying is the time may come when the people might elect a Sarah Palin. You go, 'Holy hell. You are very close!'"

So why didn't he simply write a book about de Tocqueville, who travelled to America in 1831 to investigate prisons, accompanied by his friend, the prison reformer Gustave de Beaumont?

Carey, whose True History of the Kelly Gang won the Booker prize in 2001, responds with one of his trademark irrepressible puckish grins, then says: "I really wanted to make it clear from the outset that I was not writing de Tocqueville's history but that I was writing about the existence of a person I'd invented. I can't write a book that is cluttered with research. Yes, I did research, then I threw most of it away."

It's not a true history then? A forgery perhaps? Is the author of books such as My Life as a Fake up to his old literary conjuring tricks of faking it, telling us true lies?

"Of course it's a true history!" he exclaims, then laughs loudly and says: "Of course Parrot never existed either, so it's not a true history and although both characters may have their roots in real people, they're also fiction."

And that, of course, is the artistry of a novelist and storyteller as gifted as Carey, who teaches on the creative writing programme at New York's Hunter College. Which brings us to the Olivier/de Tocqueville view that there can be no art in a democracy.

Historically, Carey acknowledges, great art has come out of much more repressive regimes than that of George W Bush. "So I don't think it's weird that we have seen some good art come out of the Bush era. Maybe art is much more necessary in that sort of situation anyway."

Nonetheless, he was thrilled when Barack Obama became President. "I was delighted because many of us, who are not hysterical people, really felt we were living on the edge of fascism. I think that's why so many of us cried when he was elected; I don't know anybody who didn't cry. We wept because of what it meant historically and politically but also it was to do with the total, total fascistic horror that we were no longer going to have to face.

"But Obama has inherited a dreadful burden and we are all still arguing about the financial people he's put in power, people who are playing the same old system, and why he did that. Still, I have a lot of faith in him. His election has brought out the true nasty horror of the racists of the Right – and my countryman, Rupert Murdoch, is running the media in such a vile way that he's giving voice to the extreme Right, which I find totally obnoxious. So, yeah, I guess you can say Parrot and Olivier in America is a book that grew out of a time of great political upheaval and the great crap culture of America and the rest of the world."

Carey's 11th novel is also a love story, however – the story of a profound friendship between two unlikely men, both of whom have tempestuous love affairs. "Yeah, I want people to know this is a hot book," he exclaims.

On a personal level, he is, he says "very, very happy – my head's bursting with creativity." Which is a huge change since 2003, when he and his second wife, Alison Summers, the mother of his two sons, now aged 19 and 23, divorced. She subsequently accused him of "misuse of literature", claiming a character – "an alimony whore" – in his 2006 novel, Theft: A Love Story, was a thinly disguised portrait of her. Carey responded that if he had wanted to write a memoir, he would have done so.

Now, he insists, his life is blessed since meeting Coady, who is the publisher of Picador USA and editor of such writers as Paul Auster, Alan Bennett and the historian and activist Naomi Klein.

A marriage of true minds?

"You betcha!" he says, adding that she is his first reader, along with his friends the publisher Sonny Mehta and novelist Patrick McGrath.

"They had things to say after reading Parrot and Olivier really closely. The older you get the more you benefit from that. When I was younger, it was impossible for me to take criticism. I wouldn't let anyone do anything to my work; I was too threatened by it. It was quite a while before anyone actually edited me.

"When I did show work in progress, it was because I thought it was so fabulous, I wanted my editor to send it back and say it was bloody terrific."

Finally, as the wintry afternoon shadows lengthen on the book-lined wall behind Carey, I ask him what conclusions he's drawn about American democracy.

"I never find out anything when I'm writing a novel. I find out I can write a novel," he replies, adding that he's already embarked on his next one, although he's wary of talking about it since he once lost a book to another writer by doing just that.

"There's a moment at the end of this book when something happens that you don't expect; I was always driving towards that point. The day I actually arrived there was exhilarating. I remember showing the very imperfect finished manuscript to Frances. She read it, then she said, 'You did it!'

"It was so lovely to share that moment and celebrate the fact that I'd pulled off this crazy, risky idea. But then isn't risk what keeps us alive?"

Parrot and Olivier in America by Peter Carey is published by Faber & Faber, priced 17.99.

Peter Carey's latest novel - Parrot and Oliver in America - puts modern America on notice