To understand pop's current mood, it is necessary first to take a step back in time. In 1994, Blur conjured an overlooked but powerful image of Britain. "This Is a Low" sits unassumingly amid the mockney knees-up of their album Parklife. Its lyric, crooned mournfully by Damon Albarn, uses terms picked from the Radio 4 shipping forecast - our nightly reminder from officialdom that we are an island nation - to sketch out a nostalgic, surreal vision:
On the Tyne, Forth and Cromarty,
There's a low in the high forties
And Saturdays locked away on the pier
Not fast enough, dear.
And on the Malin Head,
Blackpool looks blue and red
And the Queen, she's gone round the bend,
Jumped off Land's End.
In the chorus, these images are mapped on to an individual sense of loneliness: "This is a low/ When you're alone/It will be there with you," goes the refrain, which suggests that there's a kind of comfort in this isolation.
A variation on this theme runs through the albums nominated for this year's Nationwide Mercury Prize, itself a kind of national portrait. Chosen by a select group of music journalists and industry bigwigs, it picks one winner from among the 12 "British albums of the year" (note: not necessarily the bestselling, nor even most groundbreaking). The prize, which launched in 1992, is now more influential than ever - being nominated for the Mercury Prize boosts an album's sales and can thrust previously underground acts into the mainstream. A decade ago, the prize was widely ridiculed for what was perceived as its contrived attempt to reflect multicultural Britain accurately, and critics have sneered at the "token" inclusion of contemporary classical artists, such as Thomas Adès in 1999. It also has a track record of picking winners, such as the drum'n'bass producer Roni Size (1997) or Ms Dynamite (2002), who more or less disappear from the public view as soon as they pick up the prize cheque - the "curse of the Mercury", as it is known. In recent years, however, the prize has been more reflective of trends in pop, dishing out awards to Arctic Monkeys (2006) and Klaxons (2007).
This year's shortlist draws together a disparate bunch of albums, from Neon Neon's electro hip-hop to the melancholy epic rock of Elbow. There are, however, identifiable trends. Several of the acts draw inspiration from Britain's coast, landscape and history. Portico Quartet have titled their collection of rolling, chiming jazz Knee-Deep in the North Sea. British Sea Power, whose bombastic indie rock is surrounded by a watery haze of reverb on Do You Like Rock Music?, fire off references to Raleigh bicycles and the Canvey Island flood of 1953. On The Bairns, the folk singer Rachel Unthank and her backing group, the Winterset, rework traditional songs from the English north-east in eerie modes, with sustained, floating piano chords, harmonium and violin. The album's most intriguing point, however, is a cover of Robert Wyatt's 1974 "Sea Song". Taken out of its original context - Seventies prog, of all things - and arranged as a folk tune, this tragic love song has its emotional pull subtly changed: it plays with the myth of a "timeless" English music.
This cluster of sea-related metaphors may be accidental - unless in 2008 we have all started pining for the nautical life. Yet they tap in to a mood of nostalgia and isolation that was prefigured by Blur. This mood is also reflected sonically. Radiohead, whose album In Rainbows is the band's most coherent since 1997's OK Computer, have subverted conventional stadium rock, with its promise of a collective experience, by situating the bare bones of songs in synthetic, icy soundscapes. Burial, the bedroom electronica producer from south London, presents snatches of dance beats that drop in and out of a melancholy cloud of chords, white noise and indistinct voices on Untrue. It's like a negative image of rave music: the adrenaline rush of repetitive beats and the anarchic communalism of "20,000 people standing in a field" (as Jarvis Cocker once put it) have been replaced by a haunting lament. Its abstract, time-stretched quality also functions as a protective bubble for the listener. It is perfect music for iPod headphones: the sonic equivalent of a hoodie pulled low over the face in a crowded city street.
If Burial and Radiohead display unease at this retreat into sound, other artists are more comfortably inward-looking. Raising Sand is a collaboration between the former Led Zeppelin vocalist Robert Plant and the American country singer Alison Krauss. Their earthy covers of old rhythm and blues songs move in the opposite direction to Led Zeppelin's treatment of similar music. Where once Plant's wail was the siren call of a bunch of priapic young men with the spectacular and technological might of the entertainment industry at their command, the musical arrangements on Raising Sand are scaled down, an organic-sounding extension of the two human voices that sit at the heart of the mix.
A warm, rich voice is also at the heart of Estelle's Shine. The London-born singer and rapper had been plugging away on the UK hip-hop scene for years before she found success in New York with this album, produced by the American soul musician John Legend. She has rightly criticised the UK music industry for promoting white soul singers (one of whom, Adele, is also nominated for the Mercury) over black artists who make similar music. Her message is no more political than the other artists on the shortlist, though; like Plant and Krauss, or the Sixties-inflected rock of the Last Shadow Puppets (a side project for Alex Turner of Arctic Monkeys), or the folky storytelling of Laura Marling, Estelle uses the sounds of the past to celebrate individual, rather than collective expression.
The Mercury Prize list suggests a Britain drenched in luscious sounds, in love with the close, intimate tones of the human voice, yet lonely and fixated on bygone glories. Is this an accurate portrait? Perhaps it is, though not in the way the judges intend. The Mercury Prize has become more influential, not because the judges have got better at judging, but because the culture surrounding it has shifted.
Throughout the second half of the 20th century, pop music centred around the singles market and was driven by the fearsome energy of youth-oriented consumer culture. Over the past couple of decades, that energy has dissipated as pop has become ubiquitous, marketed to an older, more affluent demographic, and symbolised by the shift in importance from single to album sales. If pop tastes were once governed by the relatively democratic institution of the Top 40, based as it was on what people were actually buying, what we have now is pop by quango: a mainstream culture dominated by best-of lists put together by experts. It mirrors Britain's shift from postwar social democracy - where pop music played a crucial role in subverting class barriers and giving a voice to those on the margins - to the privatised society started by Margaret Thatcher and continued by new Labour.
Britpop was the first expression of the nostalgia bred by this culture; the Mercury list shows that nostalgia now pervades a wide range of musical genres. By their own criteria, the Mercury judges have performed creditably, presenting a diverse selection of well-crafted, polished works. Their view is limited, of course, as it ignores the wealth of musical expression that is DJed, performed live or downloaded, but the most interesting musicians here - such as Burial or Rachel Unthank, either of whom deserves to win on the night - have been able to take this nostalgia and attach it firmly to the here and now, raising an unsettling question: Are we merely waving at the past, or drowning in it?
This year's Nationwide Mercury Prize will be announced live on BBC2 on Tuesday 9 September