Not too long ago, Sauchiehall Street in Glasgow was better known for eructation than erudition. Now, thanks to Waterstone's, it boasts Britain's smartest (and most sybaritic) bookshop. Lolling on the sofas and trawling data from the in-store database at the inaugural bash, I recalled fruitless teenage Saturdays among the Kafkaesque print canyons of Foyles - that grim warehouse with all the charm and flair of the Novosibirsk Tractor Supplies Depot, circa 1935.

The launch of Waterstone's spanking new flagship (on five floors, with 350,000 volumes and two cafes) stirred many smug thoughts about how bookselling - and Glasgow - have changed. The stacks beckoned with their come-hither classifications such as "Nudes" or "Drink" until "Walking and Climbing" reminded you of a sterner local tradition.

Then, like Jacob Marley's clanking ghost, a spectre from the city's past arose in the shape of Lord Provost Pat Lally, decked out in his chains of office. Now suspended from the Labour group for his alleged part in Glasgow's votes-for-jaunts scandal, the uncrushable Lally prompts some colourful comparisons in the West of Scotland. Admirers speak of Houdini; detractors mention Dracula.

So what has Britain's most granitic municipal capo got to do with upmarket book retailing? The answer turns on the shifting boundary between the public and private realms. From the late 1980s, Lally and his crew made Glasgow seductive to incomers at the cost (so critics say) of downgrading local services. And what Waterstone's de luxe emporium brings to mind is nothing so much as some postwar Fabian planner's dream of the perfect public library.

For what the welfare state once gave, we now turn to benevolent businesses. Not very coincidentally, the Audit Commission has just confirmed in a new report that actual libraries have seen sharp falls in book issues, staff numbers and opening hours. Year after year of vicious cuts - imposed by all parties - have plunged the sector into a cycle of decline. Yet when councils do decide to fund them adequately, the results - with sleek modern complexes on prime sites in urban centres such as Croydon and Birmingham - can match the grandest chain stores for style and service.

But the broad picture reveals a slow descent into shabbiness and marginality. Retail culture gleams and smiles; its ugly tax-funded sister peels and scowls. History shows that state provision decays into a slummy backwater when people who have a choice forsake it for a slicker private space. In many areas, libraries have all but reached that stage. For proof of what happens after that, spend some time in any US public hospital (although not even Glasgow Labour Party would wish that fate on their worst enemies).