In just over a fortnight, it will be 40 years since the release of The Beatles' Sgt Pepper's Lonely Hearts Club Band. Teary-eyed baby boomers will presumably get out their vinyl copies for a Proustian spin, and perhaps wonder where all that peace, love and understanding went, a question that has been hanging around for almost as long as the record itself. Paul McCartney once related the tale of being cornered by a crestfallen hippie in 1972: "God, man, around the time of Sgt Pepper, we really thought it was going to change the world," he was told. "What happened?"
Buy the latest issue of Rolling Stone magazine, and you'll be offered a possible answer. Founded in San Francisco in 1967, it is celebrating its own 40th anniversary with an issue stuffed full of 60s reminiscence from people like McCartney, Mick Jagger, Jack Nicholson and Jane Fonda. Long set against the Republican right, the magazine's writers - on occasions like this, reflecting the views of its boss and creator Jann Wenner - clearly think that though the 60s liberati have long been on the back foot, their philosophies are ripe for a comeback. An opening editorial claims that the great issues of the 21st century "are rooted in the activism of the 60s" and that "the values of that decade have not only survived - in many ways, they are the mainstream values of our time".
That last point is right, but in completely the wrong way. Back in 1988, the British rock writer Charles Shaar Murray was interviewed for an accomplished oral history of 60s London called Days in the Life, full of claims that the era had been a golden age of personal freedom leading to touchy-feely enlightenment; a time, according to one contributor, "to be less consumer-oriented, to lead a more communal life, to care". Murray was not nearly so upbeat. "The line from hippy to yuppie is not nearly as convoluted as some people like to believe," he said. "A lot of the old hippy rhetoric could well be co-opted now by the pseudo-libertarian right, which has in fact happened. Get the government off our backs, let individuals do what they want - that translates very smoothly into laissez-faire yuppie-ism, and that's the legacy of the era." A roll-call of moneyed 60s alumni proves his point. Look at Felix Dennis, the entrepreneurial longhair who survived a stint at Oz magazine and its 1971 obscenity trial and went on to publish decidedly unhip titles such as Maxim, Stuff and The Week and amass a fortune of £750m (last year, he published a self-help manual called How to Get Rich). Richard Branson might have been a weekend hippie in the eyes of the counterculture's hardcore, but he grasped one of their few clear messages: that if you combined your capitalism with an affected nonconformity, you were made.
Much the same applies to The Gap - like Rolling Stone, founded in 60s San Francisco by entrepreneurs who saw that the straight world was leaving a big part of the market untouched - and the blessed Anita Roddick. Before selling The Body Shop to L'Oréal, that exemplar of ethical best practice, she ran a supposedly right-on business whose attitude to worker representation was summed up by a 1996 edict: "The Company does not formally recognise any Trade Union as representing any of our employees, and has no plans to do so."
And what of those 60s progenies who ended up in government? "I was a young man in the social revolution of the 60s and 70s," Tony Blair reminded us in his recent resignation speech (in the summer of 67, he had just turned 14). The point presaged a couple of paragraphs reprising his mid-90s theme of modernising a country hidebound by tradition, though it might just as well have been there to flag up any number of Blairite totems: public services that must be personalised and privatised, the necessity of workplace flexibility, an embrace of the rightwing idea of welfare dependency - as with Clinton's New Democrats, all echoes of the 60s ideas of self-sufficiency and spurning the state, too often turned on the marginalised millions for whom the Love Generation has always had surprisingly little time.
If you feel an attachment to the British side of the 60s because of social advances, thank not Anglo-American counterculture but ungroovy reformers such as Roy Jenkins and David Steel. When surveying that decade's invention of the politics of culture and identity, ask yourself this: did that sea change not only edge the progressive left away from the question of economic inequality but so repel the straight world that we ended up with the hegemony of the Thatcher-Reagan right? If you buy the aforementioned edition of Rolling Stone, you may draw an associated conclusion: that somewhere in the conflation of meaningful protest and narcissistic tomfoolery - whereby the Montgomery bus boycott links up with, say, Jim Morrison of the Doors - lies the key to a lot of the 60s failures.
Oh, and one last thing. If you're minded to give Sgt Pepper an anniversary play, I'd advise going straight to Getting Better, a song that unwittingly captures the era's essential plotline: breezy optimism clashing with a sobering sense that once all that sweet smoke has cleared, it'll be business as usual. "I've got to admit it's getting better / A little better, all the time," sings Paul McCartney. Then comes a sour line inserted at the behest of John Lennon - it "can't get no worse".
John Harris