This applies to an author's manuscript as well as to a house, a painting or an autograph from a rock star. What a literary agent knows is where a particular manuscript is likely to have its greatest value. If it is a cookbook, the agent knows which publishers and which editors have the knowledge and the connections to promote such a book in places that are very interested in such things — gourmet magazines, cooking programs on television, and the like. A cookbook would be far more valuable to such editors and publishers than to others who specialize in technology, social issues, or other subjects, or to editors whose knowledge of food does not extend much beyond hamburgers and fried chicken. Even if an agent is not able to get any more money out of a given publisher than a writer could have gotten, the agent knows which publishers are most likely to pay top dollar for a given kind of book, because that particular publisher can probably sell more copies.

A real estate agent is similarly more knowledgeable than the average home-owner as to the channels through which a given home can be marketed most quickly and for the highest sale price. Often there are little defects in the home that need to be corrected, or cosmetic changes that need to be made, before the house goes on the market. An agent who keeps up with changing fashions in homes and their furnishings is not only more likely to know what these things are but also whether or to what extent money spent upgrading the house will be recouped in a higher sale price, or whether it is better to sell the house “as is” as a bargain “fixer-upper.” The agent is also more likely to be knowledgeable as to which particular contractors are more reliable or more reasonable in price for doing whatever repairs or remodelling are called for, as well as which financial institutions are best to deal with for the buyer and seller to arrange a mortgage for this particular house. Therefore, the same house is likely to bring in more money when sold through a real estate agent, just as a writer's manuscript is likely to sell for more through a literary agent.

It is not just in complex modern economies that the knowledge provided by agents of various sorts is necessary. Under primitive pioneering conditions in the American west, agents were at least equally important. Wagon trains heading west needed to be led by someone who already knew the west — its routes, its people, the requirements, the dangers, and the trading posts that the newcomers would encounter on their journey.

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