THIS is a time of year when I try to catch up on my reading, and the Christmas present I have enjoyed most was a book, Extreme Economies by Richard Davies. It has not just one but two subtitles: Survival, Failure, Future, then Lessons from the World’s Limits.

Davies is a whizz-kid who has already been economics correspondent of The Economist and special adviser to Chancellor George Osborne. But his book is far from mainstream.

On the contrary, like many economists Davies is frustrated by the failure of his discipline either to predict the great financial crash of 2008 or to show any way forward from the aftermath.

We are still stuck in stagnation, so it is reasonable to suppose this might have deeper roots than a single crisis, however shattering.

Instead, Davies looks round the world at nine places that have been ignored by economists and policy-makers, just because they are “extreme”, that is, they deviate too far from the norm. Perhaps it’s why they hold a clue to the wider malaise. They range from a refugee camp in Jordan to a whole town of old-age pensioners in Japan. Among these nine places is Glasgow.

Glasgow? Well, maybe it looks that way from the London School of Economics, but from this side of the border Glasgow seems a pretty normal sort of place, not to say the most Scottish of all our cities. But on a global scale it is unique for a single particular thing.

A hundred years ago, the four biggest cities in Europe were London, Paris, Berlin and Glasgow, each with more than a million people. Today, the first three have several million extra people (in Berlin’s case, despite having been meanwhile flattened in wartime). But Glasgow has shrunk. It now has fewer than 600,000 people. True, if we take the whole Clydeside conurbation, through which many Glaswegians have been deliberately dispersed, the picture is not so bad. Nor is it good, however.

Davies comments: “Glasgow is an extreme economy because no other city in the 20th century experienced a decline as severe … In the late nineteenth century Glasgow was seen as the Second City of the Empire, and in many ways began to outpace the UK’s capital, leading London in art, design and architecture, as well as in engineering, innovation and trade.”

Now in the 21st century the old heavy industries have vanished, or almost, while social problems endlessly multiply and in the Calton ward of the East End the life expectancy is lower than in Aids-stricken Swaziland. Glasgow, says Davies, “slid from being the best city in Europe to the most troubled”.

He runs through the history of the last couple of centuries, to confirm some familiar explanations: the failure of capitalists along the Clyde to invest and modernise, the militancy of the trade unions, the ham-fisted interventions of governments in London. And he is up-to-date in following through from these factors to a deep psychological effect that is missed in the kind of blinkered statistical descriptions that Scotland’s academic historians have churned out.

In Davies’s chain of reasoning, all is connected: manufacturing collapse brings social deprivation, poverty in turn harms health: “The death of industry itself – ultimately an economic failure – goes a long way towards explaining why people die so young in Glasgow.”

But still there must be something more. After all, other old industrial cities – Manchester, Liverpool, Birmingham – have suffered the same sort of steep decline, yet without the same degree of physical and mental damage to their citizens.

In other words, they have not suffered the “Glasgow Effect”, which produces outcomes so uniquely awful.

The term was a coinage of Sir Harry Burns, Scotland’s chief medical officer, who made it his business to combat health inequalities. But, uncannily, the material reality had already found literary expression in a famous passage from the novel Lanark by Alasdair Gray.

“Glasgow is a magnificent city,” said McAlpin, “Why do we hardly ever notice that?”

His friend Thaw replies: “Because nobody imagines living here … think of Florence, Paris, London, New York. Nobody visiting them for the first time is a stranger because he’s already visited them in paintings, novels, history books and films. But if a city hasn’t been used by an artist, not even the inhabitants live there imaginatively.”

I once had a conversation with Alasdair. Of course he found my political and economic viewpoints utterly obnoxious but could summon up some sufferance “for the way he tells them”, as I later heard through a third party.

On the strength of that, I’m going to take issue with this famous passage, though only by reference to how it goes on and concludes: “What is Glasgow to most of us? A house, the place we work, a football park or golf course, some pubs and connecting streets … Imaginatively Glasgow exists as a music-hall song and a few bad novels. That’s all we’ve given to the world outside. It’s all we’ve given to ourselves.”

READ MORE: 'A true original': Scots pay tribute to Alasdair Gray

Lanark was first published in 1981, after 30 years in the writing. It finally came out just as the cultural desert Gray laments was in its obscurity starting to bloom. It has continued doing so down to the present when the once arid ground is covered in flowers, or at least in thistles.

When Gray began the book, he had been a lonely pioneer in the genre of the proletarian novel, which has since emerged as a key indicator of Scottish cultural autonomy and evolution.

The English write novels about bourgeois adultery in Weybridge. Scots write novels about a different nation altogether, tough and gritty, on occasion soaked through with blood and always understood only with effort.

Lanark leads on, and somewhat downhill, to tartan noir, with which Scotland at last and once again cuts a bit of a figure in the big, wide world.

It is still a problematic outturn. While, seemingly, two-thirds of Scots identify as working-class, the true proportion must be smaller. By education, income and housing, most Scots are middle-class. Yet somehow this cannot be conceded.

An upside of such contrariness is the caustic–couthy tradition in Glasgow, from Jack House to Cliff Hanley to Billy Connolly to Kevin Bridges. The downside is too fuzzy a focus on how capitalism (which is our system too) needs to work, and incidentally give the human wrecks of Calton something to live for.

In the end I agree with Richard Davies, my Christmas author, that Glasgow is an example of an “extreme economy”, if only because the society it belongs to remains one of unreconciled extremes – Hugh MacDiarmid’s “Caledonian antisyzygy” all over again.

Its culture is the key to understanding it, as Davies finally fails to do.

Its culture saves it from assimilation to a bigger and more powerful neighbour. Its culture may be the liberating force for the future.