As we talked in the sepulchral lounge of one of the chic hotels thrown up by Ireland's vanished boom, the Dublin writer Paul Murray told me what Neil Jordan had said at a recent conference. The novelist-turned- film director had a simple point to make: that creative artists had been "the one element of Irish life that didn't let people down". Unlike the bankers, developers, politicians and (of course) the priests, "they hadn't betrayed people".
Murray, Man Booker-longlisted this year for Skippy Dies, his exuberant tragi-comic carnival of a novel about Dublin schooldays and their adult upshot, also recalled the moment when, in 1999, he left Ireland to spend three months in Spain. He returned to find a land "transformed" by the lure of easy money and rocketing wealth. At the febrile height of the "Celtic Tiger" mood, "people were just buying things, from jeeps to jacuzzis".
We all know the final act of that drama, with the country's deficit now scheduled to rise to 32 per cent of the entire GDP, and a wave of public rage directed at the betrayals perpetrated by a very un-literary property-and-politics elite. "No one thought that it would end quite as badly as it did," said Murray. "It was horrible – like a fable."
Who better than a writer to make a fable stick? Dublin has just been named as one of Unesco's first "Cities of Literature". It wants to celebrate that honour. So it should: no reader should need reminding that, block for block, this city can command more literary firepower than almost any other place on earth. Simply a walk around the tall Georgian terraces of Merrion Square yields, from Oscar Wilde's family home at No 1 to WB Yeats's 1920s residence at No 82, more traces of genius than the whole territory of many larger nations. Yet several of the titans that Dublin now cherishes it once either neglected or reviled. Even Oscar, the black sheep for so long, has a statue of his own now in a corner of the square – slouching languidly on a rock.
It took time for some of Ireland's literary prophets to find official honour in their own country. But the depths of a slump might prove the perfect moment to stroke the heads that bit the hands that fed them. In public monuments, the evidence of this new-found reverence already abounds. Three elegant hi-tech bridges over the Liffey (two designed by the visionary architect Santiago Calatrava) carry the names of James Joyce, Sean O'Casey and Samuel Beckett: each in turn a voluntary exile from the cramping conventions of empire, church and then Free State.
I caught the last night of the Abbey Theatre's uproarious new production of O'Casey's The Plough and the Stars, with its audacious, pugnacious satire on the pieties of nationalism. It was first staged, in 1926, before an audience packed with outraged veterans of the 1916 Easter Rising. At the wonderfully evocative Dublin Writers' Museum on Parnell Square (housed in the former home of a whiskey-distilling Jameson), I was reminded of what had happened on the first night.
Parts of the audience erupted in fury. Yeats himself – referring to the 1907 riots over Synge's The Playboy of the Western World – strode on stage to defend the play. "You have disgraced yourselves again," he thundered. "Is this to be an ever-recurring celebration of the arrival of Irish genius?" Magnificent – and pure Dublin theatre, in every sense.
Raised in a tenement, O'Casey brought into the limelight the deeds, and words, of those Dubliners who scraped a living far from the literary salons of the Celtic twilight. From Brendan Behan to Roddy Doyle, many local writers have followed his democratic lead. The challenge of connecting an abundant heritage with everyday life persists. As Paul Murray put it, "On the one hand you've got literary Ireland; and on the other, you've got Ireland" – that "normal" European consumer society where, when I visited, the hotels were crammed for sell-out stadium shows by the Canadian crooner Michael Bublé.
I strolled around the city on "Culture Night", the annual open evening for (this year) 132 Dublin arts-related locations, from galleries to libraries. The project encourages wary citizens to cross new cultural thresholds. Last year, 152,000 of them took up the invitation. For me, a highlight was the ornate interior of the National Library on Kildare Street. There, among balloon-toting kids released from the rules of solemn hush, I remembered the "Scylla and Charybdis" episode of Ulysses. Joyce has his everyman Leopold Bloom blunder into these hallowed halls after Stephen Dedalus's fanciful debates with the scholars. So reality and imagination must converge: part of the novel's purpose, but also a fruitful aim for a metropolis of writers who, however provocative, have never let their people down.
Franzen's fine postmodern mess
Australia marks a "National Sorry Day" to show regret for its mistreatment of Aboriginals. Should the UK now have a Sorry Day to apologise to Jonathan Franzen? You will know about the misprints that led to the pulping of 80,000 British copies of Freedom, and about the theft of the author's glasses as some sort of art stunt at his launch party in the Serpentine Gallery's pavilion. His publisher, Victoria Barnsley, and editor, Nicholas Pearson, both grovelled piteously. Then those specs were seized. I blame the odd vibes of a structure designed by Jean Nouvel. The architect was a friend of postmodern guru Jean Baudrillard. How he would have loved the whole surreal mess.
A winner on the winds of war
Yesterday at the Frankfurt Book Fair, publishers and agents swooned or spluttered at the award of the 2010 Nobel Prize in Literature to... Given our weekly deadlines, you will have to turn to today's news pages to learn about the winner, however predictable the paroxyms of fury and delight. I do know the destination of the week's other major award. The German Book Prize came into being in 2005, a bid to raise the international profile of German-language fiction via a high-profile contest on Booker, Pulitzer and Goncourt lines. This week it was won, unexpectedly, by a Serbian-born Swiss writer, Melinda Nadj Abonji, for Tauben Fliegen Auf, a novel of war and migration centred on a Hungarian family in Serbia who leave for Switzerland. Previous victors include Julia Franck for her superb The Blind Side of the Heart (shortlisted for the Independent Foreign Fiction Prize) and Katharina Hacker for The Have-Nots - which, by the way, painted a vivid portrait of London in the Noughties finance boom. How long ago that all feels now.