I was a little too young. Born in a suburb of Liverpool in 1951, I was just a kid when the Beatles were making their name in the dance halls and clubs of Mersevside. Still, I knew all about them: my older brother used to skip school to go to lunchtime sessions at The Cavern. When I spoke to him last week, he remembered not just the raw power of the band but a sense, shared by all their fans, that they were going places.

And why not? We were all going places. Liverpool in the early 1960s was (we were told at school) the greatest port of the British Empire. The sea crept into everything; we hurried past the derelicts outside the Distressed Seamen's Mission, we waved little Union jacks at Cammell Laird's shipyard as another submarine was launched into the brown water of the river. Great ships were moored along the landing stages; the sleek Cunard and P&O liners, home from America and Australia, the vessels of the Bibby and Elder Dempster fines, back from West Africa and the Caribbean, laden with palm oil and sugar.

Yet though we could not know it, the Beatles' rise to fame coincided with the start of Liverpool's decline. Modem competitors, like Rotterdam's giant Europoort, stole business away from the Liverpool docks. Britain's trade shifted from the empire and the Atlantic to Europe, leaving the city stuck on the wrong side of the country. And so Liverpool started a long and catastrophic economic slump. In the 1950s the city had more than 700,000 people; now it has fewer than 500,000.

The success of the Beatles, and the bands that followed them, obscured the city's failure. As the world beat a path to their door, Liverpudlians - with a cockiness that is second nature -became convinced that they were the greatest. They had the best music; they had the best football teams (between 1963 and 1970, Liverpool's two teams won England's football championship four times). And so the city fell in love with its working-class heroes. Every kid wanted to be as ironic and world-weary as John Lennon. Even if you'd moved from the city to the suburbs, it became trendy to speak "scouse," the accent of the docks and the housing projects.

Yet for 30 years, Liverpool has dodged an uncomfortable question. Did the Beatles do the city more harm than good? They did not just engender a false sense of confidence in the city's talents; they also helped change its image. On the back of the Beatles and the football teams, Liverpudlians rejoiced in crafting an aggressively proletarian sense of themselves. This was disastrous. The city became known as a place where nobody did an honest day's work for an honest day's pay. The fans of the football teams got a reputation for drunken, foulmouthed violence. Yet plenty of Liverpudlians, far from being embarrassed by all this, almost reveled in it. If you spoke to any of Liverpool's politicians, bishops or academics in the 1970s and 1980s, you went away thinking that the first three syllables of the term "culture" were "working-class."

This willful act of selfdumbing required Liverpool to pretend to be something it wasn't. For Liverpool was always as much a white-collar town as a blue-collar one. It had thousands of clerks in the import and export trades. Its commercial lawyers, weaned on shipping cases, had as good a reputation as those in London. It wasn't just a city of pubs -though God knows it had plenty of them. The north end of the city is dotted with Nonconformist chapels, whose members were much more likely to take the temperance pledge and enjoy classical music than to down a skinful and have a singsong at the local tavern.

Since the 1960s that sober, whitecollar Liverpool has been largely forgotten. Though yet another campaign to attract investment is underway (predictably, the ads feature football stars), Liverpool has never succeeded in remaking its image as a city that can cope with tomorrow's economy. In the best of cases, that isn't easy for old ports. But at least Baltimore and Glasgow seriously tried to shed their blue-collar pasts. Liverpool, still obsessed with the glory days of the 1960s, has never quite managed it.

In the end, perhaps one shouldn't be too prissy about this. Yes, the economic decline hurt, and yes, an important source of it was the false sense of success of which the Beatles were a source. Butone might as well be honest - it was fun while it lasted. If you grew up in Liverpool in the 1960s, the rest of life has been about as exciting as toothpaste. But it didn't do much for those who came after, those too young even to enjoy the memories of Liverpool's last great days.