Sold out

The Business of Books: how the international conglomerates took over publishing and changed the way

And this year's winner of the Frankfurt Book Fair prize for Most Grotesquely Inflated Advance is, well, Knopf - for the $2m that the US publishing house paid for the rights of The Fabric of the Cosmos (as yet unwritten).

When the man from Knopf (a division of Random House) was asked if he thought Cosmos would sell a million copies, he replied that there had been "equal scepticism when Stephen Hawking wrote his book on such an obtuse [sic] subject. But there is an audience for space and time." (In Hollywood, they have a saying for such things: "The same but different.") He went on to describe the author, Brian Greene, as "tremendously photogenic". And so he is.

The trouble with publishing today, although there are honourable exceptions, is that the competition between writers is being decided before it has begun; publishers will only publicise and dedicate time to a book on which a lot of money has already been spent. Consequently, the battle of ideas is being decided in the boardroom, not the market place.

Andre Schiffrin made a brilliant career - and a lot of money for the US publishing house Pantheon - by publishing intelligent, risky and committed books by the likes of Gunter Grass (Schiffrin published The Tin Drum 40 years before Grass won the Nobel Prize for literature), R D Laing and E P Thompson. He launched a history list that was to include Eric Hobsbawm, Christopher Hill and many other stars of the left. Some sold tiny amounts; others sold lorry loads. Over time, the value of Schiffrin's backlist grew and grew, as the worth of the titles he was publishing gradually came to be recognised by the US public.

In 1980, Pantheon's parent, Random House, was bought by the newspaper billionaire S I Newhouse, the owner of Conde Nast. Newhouse encouraged the heads of the various houses within Random to bid against each other for the "best" books; this encouraged the rapid inflation of advances and led to greater pressure on editors and sales and marketing teams to concentrate on potentially "popular" titles at the expense of quality. Beneficiaries of this increased "competition" included literary luminaries such as Donald Trump, Nancy Reagan and Colin Powell. Random House was not an isolated case: the millions of dollars that Rupert Murdoch gave Jeffrey Archer for three unpopular novels almost destroyed the US and UK divisions of HarperCollins. The era of competitive auctions had begun, both in the US and in Britain.

Ten years after the buyout, Pantheon's number came up. Under Bob Bernstein's stewardship, Random's annual sales had increased from $40m to more than $800m. But this wasn't good enough for Newhouse. Bernstein - a man who had successfully reconciled Newhouse's desire for profits with his own and his employees' desire to publish good books - had to go.

The new boss, Alberto Vitale, attacked Schiffrin for publishing books with excessively small print runs, and demanded that both the staff and the list be cut, and that the political focus be shifted to the right. Courageously, the editorial staff at Pantheon resigned en masse. Authors in the US and abroad were hugely supportive but, astonishingly, the majority of editors at Random House and Knopf were not. Some colleagues went so far as to make spoiling calls, attempting to prevent the rebels from finding work elsewhere. Predictably, many of these editors were forced out soon afterwards for having similar ideas to Schiffrin.

After eight years of Vitale's destructive management style, Random had increased in value by only another $200m (compared to $760m under the civilised and humane Bernstein) and was sold on to the German giant Bertelsmann. Happily, Schiffrin and some of his colleagues went on to form a new house, the New Press, where they successfully continue their good work.

A happy ending, then, of sorts. But, in general, the lines of resistance in the industry have been too fractured and too few. The older generation of publishers, who knew what it was like to work in a business that had self-respect and ambitions that were both civilised and civilising, has been largely chased away. On the whole, Schiffrin tells a sorry tale, honestly, eloquently and without rancour. His book will interest anyone who cares about the future of our culture and democracy.

John Binias's novel, Theory of Flesh, is published by Macmillan

This article first appeared in the 13 November 2000 issue of the New Statesman, The New Statesman Essay - The fall of civic culture