BOOK REVIEW / BIOGRAPHY : Publishing Star Too Soon Burns Out : FIREBRAND, The Life of Horace Liveright <i> by Tom Dardis</i> ; Random House; $27.50, 394 pages

It doesn’t happen very often--a publishing house that produces literary works and profitable bestsellers at the same time, occasionally in a single book. But for three years in the 1920s one Manhattan firm did just that: It not only launched the fiction careers of Faulkner and Hemingway with “Soldiers’ Pay” and “In Our Time”; it counted T.S. Eliot, Dorothy Parker, Isadora Duncan, Sigmund Freud, Leon Trotsky, Bertrand Russell, Jean Toomer, Sherwood Anderson, and Theodore Dreiser among its authors.

The company? Dedicated bibliophiles could name a dozen important 1920s publishers and never think of Boni & Liveright, a house that blazed brightly from its birth in 1917 but couldn’t survive its teen-age years. It may be forgotten today, but Boni & Liveright has rightly been called the first modern book publisher because Horace Liveright, its genius, believed in vigorous salesmanship (a talent he exercised on authors as well as in the marketplace). Liveright and his company were commercial failures, because of the Depression and Liveright’s unbusinesslike business practices, but one can’t finish this biography without thinking some visionary failures are culturally more important than many mainstream successes.

Tom Dardis, author most recently of “The Thirsty Muse: Alcohol & the American Writer,” doesn’t provide a particularly insightful portrait of Liveright, nor does he write with conspicuous style. But “Firebrand” is engaging nonetheless, for Liveright was a character of great charm, ambition and myriad interests.

A brilliant student in Philadelphia but unable to afford college, Liveright moved to New York at 18 and made a small fortune as a bond salesman, spending much of his income on the theater, his first love. With Boni & Liveright he was finally able to apply his sales flair to the arts, a 1926 New Yorker profile noting Liveright’s ability to “sponsor a book like a lover of the truth and sell it like a patent medicine hawker.”

Boni & Liveright was different from most contemporary publishers, Dardis notes, for the simple reason that its owners were Jewish. Moreover, both Liveright and his partner, Albert Boni, were socialists; both were drawn to literary experimentation, to working-class subjects, to popular education.

Enthralled with glamour and excitement, Liveright paid scant attention to the business end of publishing; an alcoholic, his personal conduct could be offensive and forgetful. Worst of all, perhaps, he was distracted by the footlights of Broadway, where he produced a number of plays--mostly flops, of course--that drained both his money and his energy.

Liveright sold the Modern Library to Bennett Cerf, a B&L; partner for nearly two years, in 1925. He was forced out of the firm soon after the stock market crash of 1929, for during a general depression no publishing house could tolerate his high-living, high-profile ways.

Liveright moved to Hollywood with a Paramount development contract, hoping to bring Dreiser’s “An American Tragedy” to the screen with director Sergei Eisenstein, but died in New York, a broke and broken man not yet 50, in 1933. Fittingly, Boni & Liveright declared bankruptcy that same year--like Liveright, a shooting star that burned out for good reason, but much too soon nonetheless.