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Alice Munro.Derek Shapton

Very soon after Alice Munro stepped out onstage at a literary reading in Dundee, Scotland, smiled and began to read one of her short stories, she understood that something was going wrong. This was more than two decades ago, yet she remembers this reading very well. "When I read, I usually get a laugh by the end of my first paragraph. But I didn't. Nor at the end of the second paragraph." Unconsciously, she gripped the lectern – so hard that her shoulder started to ache. Throughout the reading, her audience sat in stony silence.

The next day, Munro gave a reading in Leeds, England. Nearing the end of her first paragraph, she heard a familiar swell of mirth. "The English were enjoying it. What's wrong with the Scots?" she asks.

She knows what's wrong. She has written about them in her 13th short-story collection, The View from Castle Rock. (The book may be her last: "I don't know if I have the energy to do this any more," she says.) The Scots, her people, are imaginative but mistrustful of imagination; passionate about literature – they applauded in Dundee – but convinced that something so worthy shouldn't be enjoyed openly. So Munro explains as we sit down for lunch at Bailey's Fine Dining in Goderich, Ont.

I am still fishing around for my reporter's notepad. "I'm sorry, I didn't write that bit down yet and I'm not taping this interview," I say.

"Not taping? So, well, we can just make stuff up," says Munro with a peal of laughter.

She's a slim, pretty and elegant lady of 75, with a wave of silver hair and a brilliant, claret-red sweater (this colour suggests the Bible's virtuous wife, she whose price is above rubies – but also, deliciously, the Scarlet Woman). While I get organized, Carolyn Merritt, Bailey's owner, brings glasses of Munro's favourite white wine. The fun, the wine, the colourful and stylish clothes, and the invitation to "make stuff up" creates the impression that Munro has slipped the surly bonds of Scottishness for hedonism and high spirits.

Don't be fooled. Under a guise of sensuous and sometimes subversive storytelling, Munro's writing has always been truthful and loyal, after its fashion, to the values of her ancestors. Her stories are threaded with hard little sentences of judgment, twists that highlight the unfairness of life, a clear appraisal of the resentments of the poor, women, children.

Like the Jews, the Scots are a people of the book. After the 16th-century cleric John Knox declared all children should be able to read the Bible, they became, as Munro writes in Castle Rock, the most literate god-botherers in Europe. They took these qualities with them into their striving diaspora. But unlike the Jews, the Scots are stereotypically undemonstrative, their "Oy vey" signalled with just a slight hardening of the lips. "Self-dramatization got short shrift in our family," Munro writes. "Though now that I come to think of it, it wasn't exactly that word they used. They spoke of calling attention. Calling attention to yourself. The opposite of which was not exactly modesty but a strenuous dignity and control, a sort of refusal. The refusal to feel any need to turn your life into a story, either for other people or yourself."

Despite her scarlet raiment, the author is famous for refusing to let attention fall on her private sphere; she's been called reclusive, shuns book tours and never lets reporters come to her house. Munro's buffer zone between her fiction and her life runs through this Goderich restaurant. Like her stories, it's very near to where she actually lives (in Clinton, with her second husband, geographer Gerald Fremlin), but still far enough away to keep outsiders at bay. Bailey's is where reporters from New York and Los Angeles are permitted to interview the Ontario woman who has been hailed as North America's best fiction writer. It's the same place where I interviewed Munro for The Globe and Mail in 1994, and at the same table, too (loyalty is thought by Scots to be one of their finer traits).

The 12 stories in Castle Rock are as close as Munro has come to turning her family's life into stories. She uses author James Hogg's late-18th-century account of her folk, the Laidlaws, of the Ettrick Valley, south of Edinburgh. She quotes a Laidlaw diary describing the crossing to Canada in 1818, and selections from her father's novel The Macgregors. But the stories she builds around these bits are invented, dramatized; the author wants to call attention not to herself but to human nature. When I use her stepmother's real name instead of the fictional one used in Castle Rock's story Home, Munro gently reminds: "You mean 'Irlma.' "

Under the charm, she can be as hard as Edinburgh's Castle Rock. She's no churchgoer, but having been brought up among Presbyterians, she keeps a version of the Sabbath. Sundays are for drives in the country. "I won't let my husband turn the car radio on," she says. "I don't want to hear the news or even music. It's a distraction."

Stern Presbyterian judgment emerges again and again in her writing, and Castle Rock is probably her most personally confessional book ever. "Cruelty was a thing I could not recognize in myself," she writes in the story Hired Girl. "Something happened that I am ashamed of," she writes in Home, a story about her father's second wife, the working-class Irlma. The story Fathers contains several self-judgments, and a confession to "a shaky arrogance in my nature, something brazen yet cowardly . . ."

She is as tough on herself as any practising Presbyterian. "Oh yes," Munro nods. "I am a stern judge."

She is, however, distressed that some critics have found her to be gloomy. "I don't want to write any more if it just depresses people. My grandmother used to say, 'There's enough misery in the world, Alice, without writing about sad things.' "

In researching Castle Rock, she became deeply intrigued by her ancestors' religion. She had always thought of her Presbyterian background as strictures, prohibitions, bachelors and old maids. Visiting Scotland, and tramping out to the Ettrick churchyard in a cold rain, did little to dispel this. But reading the autobiography of Ettrick's pastor, Rev. Thomas Boston, revealed a different aspect. The preacher loved his beautiful wife, but what Boston really cared about, Munro says, was the blessing of God. "He was Jacob wrestling with his angels, struggling all the time." She adds, revealingly, "He was so enclosed in his faith, he was like an artist." The beautiful Mrs. Boston was bedridden for much of her life. Munro suspects this was not only because the couple had many children, but because, "it is hard being married to a man of faith." As hard as being married to an artist, she adds.

The lives of girls and women are her perennial interest, especially the rebels and misfits. Her own female relatives were always exhorting young Alice by holding up examples of Good Girls. "Very early on I resigned myself to not being the family favourite. Even if I tried I wouldn't be. Too mouthy, too much attitude."

The women of the family, particularly her paternal grandmother, also withheld their approval from Munro's mother, a former school teacher with an entrepreneurial streak. In the Castle Rock story Working for a Living, the mother takes fox pelts from her husband's floundering fox farm and heads off in the Depression to sell them in swank hotels. "My father's mother," Munro writes, "hated what my mother was doing. Peddling. She said that when she thought of American tourists, all she hoped was that none of them came near her." Although Alice-the-narrator is excited to see her mother selling furs in public, she is later repelled. Her mother, she writes, has employed "flattery so adroitly and naturally that you did not even recognize it as flattery. And all for money. I thought such behaviour shameful, as of course my grandmother did."

The story goes on to recount how the fox farm fails, the family grows poorer, the mother becomes bedridden with Parkinson's disease while her alienated teenaged daughter tries to resist her growing neediness. That's all true; that all happened to the Laidlaws. But Munro ends this story as she so often does, with a twist from left field: a quote from her father's novel, about how the men in the family welcome and honour a male relative who has become a millionaire. And suddenly the reproach "And all for money!" sounds ironic. But if this is feminist rage, it is expressed subtly: just a slight hardening of the lips.

Almost 50 years after her mother's death, Munro finds her own teenaged scorn for her ambitious mother a "shame of my life." She is appalled that she was not grateful for her mother's attempts improve the family income. "My mother had all the instincts that would have made us prosper. But my feelings were so intensely private and protective of dignity. Ha!"

She wrote this particular story, she says, as a kind of tribute to her mother. There are more stories in her head. "I am not finished yet with my mother. . . . But I may not publish them." In this, her motivation seems very like that of the heroine of Ian McEwan's novel Atonement, who writes in order to script a happy outcome for a shameful childhood act.

Munro laughs at the analogy. "All writing is atonement," she says. "I am always writing to make up for things I've done."

Last year, at the Vancouver International Writers Festival, she gave her last public reading. "I used to be nervous, but at this last reading, when I became aware that my mouth was going dry, I lifted a pitcher of water and poured it. In former times my hand would have shaken. This time it didn't. I was so happy!" That was her last public reading – "it's too uncomfortable to stand in one place getting stiff, and then you have to hobble off, which looks like hell." (She is more concerned with looks than any Good Girl has a right to be. But then, she's not a Good Girl.)

As the remnants of Bailey's crab cakes are cleared away, Munro's tall geographer husband arrives. They flirt; she actually bats her eyes at him. She really enjoys her femininity. Amused, he says he'll wait outside in the car for her.

As he leaves, a second tall man comes over to Munro's table. "Alice! Is this your restaurant too?" It's Peter C. Newman, who has just put his sailboat into Goderich's dry dock for the winter. They chat for a moment, these two Canadian bestselling authors, these people of the book, who just happen to meet on a Tuesday afternoon in, of all places, downtown Goderich.

"Come outside and meet my husband," Munro tells Newman. "That way he can say I've introduced him to a real writer."