Unemployment reached record levels, scores of people went hungry, the economy was in freefall and the Nazis were on the rise. In 1935, however, there arose out of the morass of depression a phenomenon whose impact would transform countless lives, namely Penguin Books.

Legend has it that it came about when Allen Lane, a Bristol-born publisher, was returning by train from a visit in the West Country to Agatha Christie, who was one of his authors. Killing time at Exeter station he sought something to read in a bookstall and was appalled by the lack of choice. Wouldn't it be wonderful, he thought, if there was a selection of books which would satisfy every taste at a price everyone could afford?

In an instant, Penguin was born. Among the first batch of sixpenny paperbacks was a biography of Shelley by Andre Maurois and novels by Ernest Hemingway and Eric Linklater. Why was Penguin so-called?

Because, recalled Lane, that was what his secretary volunteered when he told her he was looking for a name that would convey the "dignified but flippant" nature of his new venture.

With the exception of the BBC it is hard to think of another institution that has had such a profound effect on the cultural life of Britain. Suddenly, everyone could be autodidacts and build their own library. And what a library it was, for not only did Penguin publish contemporary books but also classics and, through its Puffin imprint, brilliant books for children.

Over the decades Penguin's reputation grew, not least because it kept in print the kind of books every generation ought to read. I have perhaps a few thousand of them, from orange-covered novels whose pages have foxed with age to blue-jacketed Pelicans gathered under the umbrella of "non-fiction". For me and many like me a Penguin book was synonymous with taste and quality. For an author, it was the publishing equivalent of a knighthood. To be published by Penguin meant you had arrived, allowing you to be mentioned in the same breath as Plato and Proust.

Of late, however, Penguin has lost much of the lustre it once had. Of course, it still publishes good books but it also publishes bad ones, many of which one could not imagine its founder publishing. In 1970, it was bought by Pearson and over the years that followed its identity became increasingly diluted. Now comes a further dilution with the merger of Pearson and Bertelsmann, which apparently will create "a books empire" with annual sales of £2.5 billion and 25% of the global market.

What such eye-popping figures mean to readers and writers is impossible to say. What we can be sure of is that books will continue to be written and read irrespective of who their publishers are. The book trade, as it used quaintly to be known, is in the midst of a revolution the outcome of which is far from certain. It has been said that the fusion of Pearson and Bertelsmann will provide much-needed competition for Amazon which currently can shove its weight around like a bully in the playground. Doubtless there is some truth in this. But what also seems assured is that in future there will be fewer publishers to whom writers will be able to go to place their books and a higher concentration by publishers on unchallenging books that will sell in the tens – if not the hundreds – of thousands.

Such, it seems, is the way the world of publishing is going. Once upon a time it was full of quirky individuals who made their imprints in their own image. They were well read and evangelistic about their calling. Books were revered not just as conveyors of information or entertainment or enlightenment but as symbols of civilisation. These days the old trade has morphed into a business in which the bean counters reign supreme and marketing departments make the final call on whether to take a risk on an author with an unproven track record or whose previous book underperformed. If Allen Lane is not turning in his grave then I am Miss Marple.