Official! It really is a mad, mad, mad world

Dark thoughts about humanity's future don't usually get to the top of the Christmas singles charts.J

The Christmas number one can signify not only the taste but also the mood of the nation. Record companies know this, too, and market their product with aggressive cynicism, often encouraging their leading artists to produce novelty songs of manipulative repellence. "That one's my pension," Noddy Holder of Slade chuckles, whenever he is asked about the Christmas song that he wrote in the mid-1970s and which is played with tedious predictability whenever the days shorten, the shops fill with tinsel and the hard sell begins.

This year, there were some truly awful songs competing at the top of the charts, including "Christmas Time (Don't Let the Bells End)" by the wretched (and wretchedly popular) retro-rockers from Suffolk, The Darkness, something appropriately banal from the film Love, Actually and a version of John Lennon's "Imagine" by the finalists of the television anti-talent show Pop Idol, a kind of updated Opportunity Knocks but without the charm or irony. Any one of these singles would have told you as much as you needed to know about the contemporary pop industry: that it has nothing to do with music and everything to do with coercion and capitalist excess.

Yet to the bewilderment of record company executives, it was not one of these but a quite different record that came out on top: a genuinely good song, called "Mad World" and sung with exquisite mournfulness by Gary Jules. An antidote to the false and the puerile, it was not recorded for the Christmas market; in fact, it was not recorded to be packaged and sold at all, and owed its success almost wholly to word-of-mouth recommendation.

Its story goes back more than two decades, to an afternoon in 1981, when an aspiring young singer-songwriter called Roland Orzabal was staring from the window of his small flat in Bath. He was preoccupied by the random drift of people outside, by how unhappy they appeared to him and by his own dissatisfaction. Orzabal, who was 19, had, like many young adults before him, reached that point in his life when nothing about the world - its inequalities, its wars, its politicians, its natural catastrophes - made sense. "I was anti-establishment, anti-authority," he said recently. "I believed the world needed changing and was thinking to myself: 'If only we could just get it right'."

He wrote "Mad World" that afternoon. With its chorus of "The dreams in which I'm dying are the best I've ever had", it was a perfect expression of late-adolescent torpor and restlessness. In 1982, with Orzabal now part of the experimental electronic pop duo Tears for Fears, "Mad World" reached number three in the British charts and became something of an unofficial anthem for disaffected youth. (I never bought a copy myself, but my sister did, and I used to listen to hers whenever she went out.)

Within a couple of years, Tears for Fears were big business, having had a series of hit singles in the United States. Where once they were photographed under low, grey skies and dressed entirely in black, they were now being filmed for the video of "Everybody Wants to Rule the World" speeding exuberantly across America in an open-topped Cadillac, the latest members of the pop plutocracy. The melancholy of "Mad World" had been replaced by the megalomania of "Rule the World".

Yet the integrity of "Mad World" was not easily forgotten. Like the best pop songs, it is simple, melodic and direct, and it has the capacity to transport you in time and place. I need only to hear the first bars of its heavy, urgent, synthesised opening to recall exactly where I was and how I felt when it was first released in 1982.

Among those who liked and remembered "Mad World" were three Americans - Gary Jules, then a little-known singer, the pianist Michael Andrews, and the young film director Richard Kelly. When Kelly was working on his first film, the low-budget, independent Donnie Darko, which is about a disturbed teenager who is convinced that the world is about to end, he commissioned Andrews to record a new version of "Mad World", which was used in the hallucinatory closing sequence of the film.

The Andrews and Jules version of "Mad World" is even more sombre than the original. There is just Andrews's piano and Jules's extraordinarily melancholy voice. Pared down and stripped of all superfluous instrumentation, it was recorded in little more than an hour in a basement studio in San Diego. It has been appropriated by television producers and used again and again to accompany the images of war that were such a feature of the past unhappy year and which are being replayed endlessly on the 24-hour news channels.

Its success, though perplexing, is partly the result of the startling effect of the film Donnie Darko. Though greeted with indifference on its release in America in 2001, Donnie Darko has since acquired cult status, one of those movies that it seems every third person you meet recommends. Set in 1988 in an unnamed small American town, it combines a smart, zany pop-cultural sensibility, familiar from the work of novelists such as Douglas Coupland, with a genuine sense of protest at the mess we have made of the world.

Early in the film, the young hero, whom we first see out sleepwalking, is visited by a giant rabbit, "Frank", which may or may not exist. The rabbit tells him that the world will end in 28 days, six hours, 42 minutes and 12 seconds, and from there it is as if he is left alone to solve the riddle of the rabbit's appearance. The rest of the film, with its pop soundtrack featuring British bands of the early 1980s - Echo and the Bunnymen, Tears for Fears, Joy Division - passes in a haze of coincidence and intrigue. Most of the characters are either disturbed or grappling with unhappiness. In the background, on the television news, we glimpse images of Michael Dukakis as he slides lugubriously towards defeat in the 1988 US presidential elections. Not much is going right - and even time itself seems out of joint.

Donnie (Jake Gyllenhaal) is an unreliable guide to this stunned, narcotised suburban landscape: when he is not dreaming of blowing up his school, he visits a shrink and takes tranquillisers to ease his rage. He spends many lonely afternoons out in the woods, firing a gun, and you know it won't be long before he turns his fire on his classmates, his teachers and then, inevitably, on himself. Except that in this strange film the expected never happens: Donnie, in a moment of revelation and mutuality, gives his life to save not only the girl he loves but, it seems, the world itself. That, at least, is my interpretation of the final third of a film which resists all interpretation. What you are left with, in the end, is a series of impressions - and these, in truth, are of a world that if not quite mad is certainly without true explanation or meaning.

On Boxing Day, I switched on the late-evening news. There was nothing festive about either of the main reports: the murder of a police officer in Leeds and the death of more than 20,000 people in an earthquake in south-east Iran. During the fraught run-up to Christmas, there was, as on Boxing Day, little good news to be had: each day we discovered more about what had happened to those two unfortunate girls in Soham. Their hopeful faces seemed to symbolise all that we had once had and lost in this country. Meanwhile, Iraq seethed and burned and Americans were once more being prepared for terrorist attacks.

On BBC Radio 4's Today programme, the novelist John le Carre, an astute chronicler of postwar Britain, spoke of how betrayed he felt by Tony Blair and the new Labour experiment. Le Carre, like David Hare and so many others, believed that the Labour election victory of 1997 offered a new beginning, a chance for Britain to remake itself as a genuine social democracy, as well as redeeming the excesses and deceit of the recent past.

Who believes that today? Indeed, who still believes in the potential of politicians to improve our lives? What we have, instead, is quietism, the resignation of the will. Fewer and fewer people in Britain vote because, like most of the world's population, they have ceased to believe in progress and, if they have no religion, must learn to live without the possibility of consolation.

In Tolstoy's Anna Karenina, Levin, having been rejected by the woman he loves, retreats to his country estate, where he seeks to escape feelings of loss and sterility through working hard on the land. It is not enough. Like Donnie Darko and, indeed, the young Roland Orzabal, the dreams in which he is dying are the best he ever has. "It's true that it's time to die," he tells a friend. "And that everything is nonsense. I'll tell you truly: I value my thought and work terribly, but in essence - think about it - this whole world of ours is just a bit of mildew that grew over a tiny planet. And we think we have something great - thoughts, deeds! They're all grains of sand." His friend is unimpressed. "But, my dear boy, that's as old as the hills!" he tells Levin.

One feels the same as the friend when listening to and reading the lyrics of "Mad World" - that such expressions of ennui are indeed as old as the hills. That, however, does not diminish their power or their truth, which is why "Mad World", at the beginning of 2004, is such an appropriate song for our times and why its success at Christmas, in defying the cynicism and fake bonhomie of the record companies, is paradoxically a source of optimism and wintry celebration.