IN NEARLY EVERY REPORTER lurks a frustrated novelist, which perhaps explains why the press keeps announcing lush new price records set for mass-market paperback rights to popular novels. Even literary publishers take notice: Bill Henderson in his introduction to The Art of Literary Publishing alludes to the most notorious, a sum of $3.2 million paid by a subsidiary of a West German holding company for a voyeuristic novel about an ersatz princess.

There's the rub, isn't it? When is a publisher a publisher? When is writing literature? The villain hissed by almost every one of the contributors to this fascinating symposium is a non-publishing bugaboo called "the conglomerate," the literary world's hate-word for the incredible hulk in the wings. Unfortunately business don't exist without markets, and the conglomerate publishers succeed in finding markets and saturating them. They don't discover authors, they acquire authors. The people who discover authors are represented, and honorably, in this book. The people who rack up big sales, whose authors may be forgotten but whose imprints survive, are not.

"We has met the enemy and he is us," as Pogo gets credit for remarking. Can't the villain be identified as our public thrall to best-sellerdom? The literary publisher says yes. Can a work, he ask, that has reached millions of people in its first year or two really be literature? The answer, if categorical, may be misleading. An editor at The New York Review of Books once loftily declared, "None of us has ever read a book that appeared on the bestseller list." A pity that such brahmins are thereby deprived of the pleasures of Doctor Zhivago, Ship of Fools, The Last Hurrah, Humboldt's Gift, Dubin's Lives, The Stories of John Cheever, Beautiful Swimmers, The Habit of Being, to mention only a batch of books I like. But we'd all have to admit that books with any pretense to literary merit appear on best-seller lists with decreasing frequency. Look at this week's!

Best-sellerdom encourages monopoly. The large companies -- viz. MCA, Warner Communications, Gulf & Western (a true conglomerate with no product to call its own), CBS, the Hearst Corporation, Bertelsmann and the Times-Mirror Corporation -- own all the major mass-market paperback imprints in this country. Literary publishing by contrast prompts diversity -- and what diversity!

In The Art of Literary Publishing, James Laughlin, that admirable poet and most honored of innovators, explains: "There are now in this country hundreds of small presses, thanks largely to two machines: the IBM composer . . . a poet can turn out himself a page of poetry which looks like printed type. . . . Almost anybody cany run a small offset press. Then all you need is a cutter and a staple binder and you have a little magazine." Jonathan Williams, with magnificent improvidence, describes how he supports himself and the Jargon Society the hard way, by itinerant poetry readings, in order to spend the proceeds printing four books a year. "I took on the basic American notion that if there wasn't an audience, you had to go out and find or make one."

The book offers us the voices of "commercial" editors too. There's a beautiful account by Maxwell Perkins, written only days before his death, of his relations with the prodigious Thomas Wolfe. James Landis, an editor at William Morrow, pursues the dilemma of what we mean by literature: "Even the most literary of editors tend to mention only those books of theirs that sell, and this leads further to the emphasis on sales in the publishing business. . . . If the publishing fails, the same book is much more likely to be hailed as a masterpiece long after it ceases to be available." Landis never does answer his own question about what "literature" may be, but Cleanth Brooks does: "Authentic literature is impervious to time. That is why we continue to discuss it."

The book asks difficult questions and sharpens the horns of many of horrid dilemma. The black writer Ishmael Reed attacks (not quite accurately, for white females are moving up): "With only three percent unemployment in the midst of a worldwide depression, it can be said that white males have accomplished what few classes in history have accomplished: a near economic utopia." Hayden Carruth, poetry editor of Harper's, asks, "Can anyone argue that the popular press today, including book publishing, is not worse than it was a hundred years ago, worse and bigger?" Other contributors, like Majorie Fletcher of Alice James Books, go too far in bitterness at the literary situation: "Unfortunately, all U.S. writers now face a preponderance of publishing houses in which every commitment to the well-written book must bow to the pursuit of the buck," Happily, this last statement is contradicted many times by the contributors to The Art of Literary Publishing. Jonathan Galassi's essay, "The Double Agent: The Role of the Literary Editor in the Commercial Publishing House" sounds positively hopeful about commercial publishing's inadvertent dedication to literature.

Nearly every essay agrees on one point: that the National Endownment for the Arts as it grows larger does not grow more discriminating about writers and writing, and each essay gives a slightly different reason for this, most of them valid. Felix Stefanile of Sparrow Press, in "A Revolution of Twerps," takes the strongest line: "a Malthusian nightmare of poetry publishing, a Vanguard of mediocrity." We can only sigh at the courage of those who gnaw the hand that feeds, and the kindliness (or could it be indifference?) of the feeding hand.

Most of the contributors sense that a literary subsidy must ultimately rest on the acceptance of literature by some public or other, and their ways of approaching this difficulty make this as illuminating a book on publishing as I've read in years. It's most illuminating because it offers no easy answers. Literary publishing, it turns out, is another form of literary work, nearly as lonely as writing itself, nearly equivalent in its expenditure of sweat and frustration for deferred reward. The Art of Literary Publishing, with its gold endpapers and its two-color stamping (Veblen, who published your early work?) would impress this editor more if it did not contain (by my quick count) 71 proofreading mistakes, enough to make a conglomerate blush. But it should be read as a corrective to the newspaper stories by all book and magazine editors, by all small press publishers, all arts administrators, and of course by members of the Literature Panel of the National Endowment for the Arts. Then we could all reflect together on the following question: how many authors of the first rank -- without conglomerates and the National Endownment for the Arts -- went generally unrecognized in their lifetime? Keats, Blake, Holderlin, Svevo, not so many others. Today "recognition" comes the moment you publish a poem in Night Sweat and get listed a month later in The Universal Poetry Directory.