he economy is in freefall, protesters in tented villages have been occupying many of the world's financial centres, millions are losing their jobs and their homes, uprooted from the certainties of their lives.

Where do we turn to hear these hardships reflected and contested in song? Not to the offerings of some straight-talking young firebrand, but to the hard, monochrome music of Woody Guthrie, born 100 years ago and – sadly, perhaps – as relevant as ever.

As we struggle to come to terms with the Great Depression Mk II, Celtic Connections could hardly have chosen a more resonant moment to reaffirm the political and topical roots of folk. What better way to do so than with a concert celebrating the enduring legacy of the greatest chronicler of the world's social and economic woes?

This is the man who wrote The Jolly Banker ("I'll come and foreclose, take your car and your clothes / Singing I'm a jolly banker, Jolly banker am I") or I Ain't Got No Home In This World Anymore ("Oh, the gamblin' man is rich an' the workin' man is poor"). He may have died in 1967, but were he somehow able to catch a glimpse of 2012 he could hardly fail to recognise the tell-tale signs of a society divided between a few haves and a whole lot of have-nots.

"A lot of Woody's themes, tackling social and economic injustice, have swung around again," says singer-songwriter Jay Farrar, formerly of Uncle Tupelo and Son Volt, who is headlining this month's 'Woody At 100' concert at Celtic Connections. "There is so much in Woody's lyrics that's timeless – a lot of it wasn't, too, that's one of the pitfalls of topical writing – but he had such a vast scope, so much of what he wrote is timeless and contemporary. For me, as a writer he laid down the template that you could write about topical subjects."

Born on July 12, 1912, in Okemah, Oklahoma, Guthrie wrote about everything: children, sex, booze, outlaws, comic verse, but his lasting legacy is his determination to sing against contemporary social injustice. "Woody started the tradition of the topical song movement," says Billy Bragg, no stranger to the political soap box himself. "As far as I'm concerned, that's the tradition I'm part of. I'm a link in that chain. Joe Strummer called himself Woody Mellors before he called himself Joe Strummer, so Joe was a link in the chain. Bob Dylan is a link in the chain.

"There's a line through it all, but Woody is the big copper spike that goes into the ground at the end of it. He's our original anti-establishment rocker. I'm sure if he'd lived long enough he'd have got himself a Les Paul."

Guthrie's empathy for the lot of the working man and woman was ingrained during the Dust Bowl calamity that struck the Great Plains in the early 1930s, and which forced him and millions of others to travel to seek work. His compassion for "ordinary folk", of which he was certainly one, was radicalised by the Great Depression, during which he came to believe that the unchecked forces of capitalism were not only to blame for placing the world in economic freefall, but had also fuelled the grass-roots poverty afflicting vast swathes of the population. Sound familiar?

His anger at these iniquities was expressed through an unceasing torrent of music. An unabashed Communist ("I seem to have been born a shade pink," he once said), he wrestled with the works of Marx, Engels and Lenin and attempted to distil their message into "simple words", working on the theory that "people read a pamphlet one time, but a song is sung and played over and over again". How right he was.

Nearly half a century after his death, much of his output is as potent as ever. His best known song, This Land Is Your Land, was sung by Pete Seeger at Barack Obama's inauguration. Often characterised as a benignly patriotic hymn of unity, it is in fact a song of insurrection sung over the heads of the ruling elite to the workers beyond: this land is your land, and don't forget it. "There's a verse in This Land Is Your Land that deals with trespassing, the haves and have-nots and the wealth gap, and that's an issue we're dealing with in society right now," says Farrar.

Sometimes his message was simply too hot for public consumption. The Guthrie archives contain a final verse to his ballad Jesus Christ which appears to espouse violent uprising. "When the love of the poor shall turn to hate/ When the patience of the workers gives away/ 'Twould be better for you rich if you'd never been born..." He never sang it.

Many more of his key themes could hardly be more relevant in 2012. He tackled the complicity of politicians and, in Deportees and Do-Re-Mi, the eternal plight of immigrants seeking entry to some paradise that doesn't really exist: "The police at the port of entry say / You're number 14,000 for the day".

Even Guthrie's white-hot hatred of fascism, forged during the Second World War, has a continued contemporary significance. Two years ago Billy Bragg pledged his troth to the newfound Folk Against Fascism (FAF) movement, formed in protest against the BNP's attempts to appropriate English folk music to aid its sorry cause. Bragg joined, he says, as "one of the Woody Guthrie branch. For those of us who were politicised by Rock Against Racism in 1978, the little guy playing in the '40s with THIS MACHINE KILLS FASCISTS written on his instrument was a huge influence. So the FAF symbol is Woody's guitar, only slightly altered."

Guthrie is not beyond criticism. His words occasionally stoop to simplistic binary opposites, while the stark, unsparing similarity of most of his musical settings can sometimes blunt an appreciation of what he's saying. He was also no angel. He drank heavily, shirked responsibility and treated his three wives and eight children with considerably less care and consideration than his man-of-the-soil image might have suggested. He also harboured a hugely misguided admiration for Josef Stalin. He was as human as all the rest of us.

"Woody At 100" aims to tie together these disparate strands. Alongside Guthrie's granddaughter Sarah Jane, the concert features three stalwarts of alt.country and US roots-rock music. Farrar is joined by Anders Parker, his partner in his current band Gob Iron and Centro-matic's Will Johnson. The trio are no mere dilettantes. They united last year to write and record an album called New Multitudes, released next month, which takes previously unused lyrics from the Guthrie archives and sets them to music. It's a continuation of sorts of Mermaid Avenue Vols 1 and II (1998 and 2000), on which Billy Bragg and Wilco placed some of Guthrie's unpublished lyrics in a fresh musical context. Farrar – a former band-mate of Tweedy's in alt.country pioneers Uncle Tupelo – was involved in the initial discussions for that project.

"The catalyst for this idea was back in 1995 and 1996," says Farrar. "I was asked to work with Billy Bragg, but that didn't happen; I suppose that could or would have been part of the Mermaid Avenue thing. But the idea of working with Woody's lyrics stuck with me, and I figured I had as much right to do that as anybody else. Fast forward to 2006, when I found time to visit the Woody Guthrie Archives in New York. It's in a small space in Manhattan but the amount of material is pretty vast – I only saw probably a tenth of it. It's an impressive repository of his paintings, artwork, notebooks and lyrics, and a testament to his creative output. He made songs and paintings on a daily basis, which is something for every artist to aspire to."

Farrar and Johnson later enlisted friends Jim James of My Morning Jacket (who won't be playing at the Celtic Connections gig) and Will Johnson, and the project evolved into a four-way enterprise. As with Mermaid Avenue, the intention was not only to emphasise the currency and versatility of Guthrie's themes, but also to secure his place as the founder of a songwriting tradition which transcends folk music, and which has endured. In this sense New Multitudes is part of a lineage of appreciation stretching back to Bob Dylan's infatuation with Guthrie in the late 1950s and early 1960s, an obsession that travelled from bare-faced imitation to creative homage.

Farrar wants the album to highlight the hope, beauty and humour that exists in Guthrie's work as well as the anger. "In the case of at least one song, Hoping Machine, the words were taken from this stream of consciousness writing in his journals which really spoke to me," he says. "I liked the message: don't let anything knock the props out from under you, learn from your mistakes. It's sort of universal."

There is, it's true, a universality in virtually everything Guthrie ever wrote, an essential humanity which survives and indeed shines decades after his songs were written and recorded. The continuing relevance of his music proves that the world moves on but the big picture doesn't change all that much, a truth at once comforting and slightly disconcerting.

That the current times contain unwelcome echoes of former hardships is all too evid ent, yet there is one big difference: there are no anthem-writers now, no protesting poets-in-songs. And so we keep on listening to Woody Guthrie sing.