On Saturday night Bob Dylan returns to the scene of the crime. For the first time since 1965 - when he appalled traditionalists by playing electrified rock'n'roll - he will be appearing at the Newport folk festival.

Having been Grammied, Clintoned and Poped, Dylan has no need of Newport's belated seal of approval. But it is a moment worth pausing over, especially now, with the hard rain headed Iraq's way.

The 16 minutes of music blasted out by Dylan on that summer night 37 years ago were to become, in the words of Dylan's biographer, Clinton Heylin, "the most written-about performance in the history of rock". And not without cause. Dylan's clash with the milieu from which he had emerged was high drama, and more. The moment was culturally, politically and commercially resonant - a fulcrum of the American 60s.

History vindicated Dylan - and in short order. Like a Rolling Stone, booed at Newport, soared up the charts, detonating an explosion of pop music innovation and ambition (as well as pretension). But, unexpectedly, history may also end up vindicating Dylan's Newport opponents. One of those scandalized by the new sound was the folk archivist Alan Lomax, who died two weeks ago. Lomax's collections of American music were the foundations of Dylan's art. But when Dylan turned up the amps, all Lomax heard was a sellout to the forces the festival was supposed to challenge.

The festival had always been intertwined with the civil rights movement, giving northerners a taste of the freedom songs being sung on the frontline, and sending anthems such as Blowin' in the Wind back down south to expand the traditional repertoire. Also on the bill with Dylan that evening was Fannie Lou Hamer, not a singer but a Mississippi militant. Hamer was there because the festival organizers assumed the audience would share a political as well as a musical ethic. Indeed, to them, the two were one.

A tenet of the folk revival was that young people should aspire not merely to consume but to participate - in music, in public life. In contrast to the manufactured sound of teen-targeted pop, folk promised something enduring, authentic and collective. Dylan himself had declared that folk music was "the only true, valid death you can feel today". In that context, as folk veteran Oscar Brand explained, "the electric guitar represented capitalism".

It sounds far-fetched today, but Lomax, as it turned out, had a point. Dylan's boundary-blurring rock'n'roll helped create a new record-buying constituency, a milestone in the construction of today's global music industry. Now dominated by a handful of giant media conglomerates, it is both more centralized and more socially segregated as executives calibrate the music to chime with consumer demographics. As Lomax feared, the demands of authenticity and political independence do indeed clash with those of commerce (ask George Michael).

"You don't need a weatherman to know the way the wind blows" - but these days there is an army of well-paid weathermen advising us. You can walk into any chain bookstore and purchase the Rough Guide to Cult Movies or a pocket precis of the Madchester scene. Since 1965, capitalism's expertise in packaging the dissident and flogging it back to the people from whence it came has become intimidatingly awesome - never more so than when PriceWaterhouse-Cooper adopted The Times They are A-Changin'.

The Newport festival itself is not what it was. Abandoned in 1970 (because of what its official website terms "growing social unrest"), it was revived in the mid-1980s, largely stripped of political aspirations. Today it occupies a cozy niche in the industry. The title sponsor for this year's event is a company mass producing "natural juices" (it is also backed by Borders, the bookselling giant, and ABC television).

What will Dylan play on Saturday night? With Dylan, it's anyone's guess. However, one number featured in recent outings is Masters of War, his 1963 assault on the military-industrial complex. When he performed this in the US after September 11, many in the audience seized on it as an indictment, not of a cabinet stuffed with arms dealers, but of America's enemies in the war on terror. Some fans punctuated the master's rendition with lusty shouts of "Death to Bin Laden".

It is unlikely Dylan will ever tell us why he chose to sing this song at this moment. However, it is worth noting that he plucked out the same song at the 1991 Grammy ceremony during the Gulf war. If there is an all-out war on Iraq in the coming months, no one should be surprised if a new generation finds meaning in the old lyrics: "You fasten the triggers/for others to fire/ then you set back and watch/ when the death count gets higher." Or, more importantly, composes new ones. In doing so, they could study Dylan at Newport in 1965, in all its glorious contradictions, to some advantage.

Mike Marqusee's study of Bob Dylan will be published by Bookmarks in the autumn.

© Guardian Newspapers Limited 2002

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