Editing is a sensitive issue—for writers, for editors, for everyone involved. Virtually all writers can benefit from working with a good editor. But note: the key terms here are “with” and “good.” Which is to say, the writer and editor have to be well matched—they have to understand each other and be able to communicate. What most writers resent is an editor who has a very different view of the trajectory of their work and then attacks the manuscript in a vigorous manner based on that view.
Most notably, editors are essential for serving as a sounding board for ideas, catching unintentional repetitions, and identifying passages and plot developments that don’t work. Word by word revisions are less important, and in some cases counterproductive. Finishing the manuscript of a novel is after all very different from writing and editing a magazine or newspaper article.
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The Recalcitrant Scrivener goes on to discuss two examples of unacceptable literary editing, one by an editor (Raymond Carver's editor) and one by an author (Jack Kerouac).
I'd never heard these two particular examples myself but the idea of literary editing has always been intriguing to me (duh, my job), but editing literary fiction is very different from what I've been doing thus far in my career. I took two classes in college on the very topic and it's amazing how varied opinions can be on what is and isn't go editorial-wise and how authorial intent can be so subjective, especially if the author isn't there to set editors or readers straight.
Personally, I think the key to being a good editor is understanding the authorial intent by communicating with the author first-hand and then doing everything he/she can to help the author achieve that intent in a way that everyone is happy with. While that's a very simple concept, it can be difficult in execution. But for me, it's always, always the goal. It's the author's book. Not mine. I just do the best I can to guide.