AMERICAN LITERATURE'S HANGING in there, thanks in no small part to Dalkey Archive Press. Earlier this year, Dalkey reprinted two massively important — and simply massive — books by William Gaddis.

The Recognitions, Gaddis's first 976-page novel, an encyclopedic story of an art forger named Wyatt Gwyon, was a critical bomb. It was more or less unread when it first came out in 1955. Though it found a small, devoted readership over time, Gaddis struggled through a variety of odd jobs for another 20 years before his second novel, the 726-page J R, was published in 1975. This time, readers were better prepared for his achievement — his reputation had grown, the culture had caught up with the grandeur of his literary vision — and J R won the National Book Award; its author finally gained the recognition he and his fans always thought he deserved. In 1982, at the age of 60, Gaddis received the MacArthur Foundation's Genius Grant. Today he’s widely regarded as one of the great American writers of the second half of the twentieth century. His legacy has been a point of discussion — and bitter contention — among important contemporary writers like Jonathan Franzen, Rick Moody, and Ben Marcus.

Before Dalkey, Penguin had published Gaddis's big books, but the author's children, Matthew and Sarah Gaddis, decided to switch publishers because she felt her father's work wasn't getting the attention it deserved. One hopes that Dalkey does well with Gaddis's two masterpieces — the publisher's list, both back and front, is nothing short of a wonder, so it's hard to imagine that Gaddis could find a better home — but the move is nonetheless troubling. That Penguin should fail to serve the legacy of a writer as important as Gaddis, that his estate should feel it necessary to switch in the first place, is frankly an indictment of how publishing works today. More and more, desperate for bestsellers, the Big Six — Hachette, HarperCollins, MacMillan, Penguin, Random House, and Simon & Schuster — have lavished attention on their frontlists, often at the expense of backlist and midlist books.

Unfortunately for the Big Six, apart from a handful of brand-name authors and certain strands of genre fiction, there's just no way to predict which books will succeed. From a financial perspective, most new books are unambiguous flops, but the logic of the marketplace leads publishers to take increasingly pricy risks, to pay huge advances for books that may or — more likely — may not pan out. Publishers subsequently spend most of their marketing money on books that have already garnered outsized advances, recklessly doubling down on enormous bets. In certain key respects, then, big publishing has come to resemble the highly leveraged world of Wall Street. It may therefore be quite appropriate that Gaddis's books have migrated from a big corporate publisher to a university-allied nonprofit, given that the book under review here — J R — is about how America has confused the logic of the marketplace for the logic of democracy, and the devious ways that capitalism corrupts art.

Both publishing and Wall Street, Gaddis's novel suggests, are "paper empires," enterprises heinously, hilariously bad at what they do, and bad in similar ways. Both have subordinated their alleged functions — rationally allocating capital; optimally connecting readers and writers — to reckless speculation. Con men and gamblers ris...