When the news that the Man Booker prize is to be opened up to the vast and dominant fields of the American novel broke this week, I heard of a well-known London agent who remarked succinctly: "Well, that's the end of the Booker, then." When eligibility shifts from the UK, Commonwealth, Ireland and Zimbabwe to English-language novels published in the UK, it is hard to see how the American novel will fail to dominate. Not through excellence, necessarily, but simply through an economic super-power exerting its own literary tastes, just as the British empire imposed the idea that Shakespeare was the greatest writer who ever lived throughout its 19th-century colonies. The tendency was already at work in this year's Booker shortlist, where a superficial multicultural aspect concealed a specifically North American taste. Jhumpa Lahiri's Lowland had fascinatingly airport-bestseller features, including the favourite trope of two brothers divided by the currents of history. NoViolet Bulawayo's We Need New Names dutifully covered all the external and societal concerns about African society that a creative writing student, or a devoted viewer of CNN's nightly special, might believe significant – NGO, exorcisms, corruption, the plight of the white Africans, etc. Ruth Ozeki's novel about Japan, A Tale for the Time Being, covered the cute aspect, the Salaryman aspect, the Buddhist aspect, the suicide aspect and so on in approved Murakami-esque tones. Curiously, all these novels, effectively written by American-based authors about exotic places, were unable to do so without placing the exotic places in the reassuring context of an American suburb. The novel written by an Indian, living in India, about India, without reference to his later life in Cincinnati was dead this year. From next year, the floodgates open, and we can expect never to hear again from an Indian novelist.

The Commonwealth Writers' prize provides a cautionary tale: in 2011, they made the decision to stop the main prize, and just continue with a first novel prize. Two years later, this was abolished, too. All that remains of a once very useful prize is a short story competition to which nobody pays the slightest attention, and which, in 17 years, nobody of the slightest reputation has ever won.

The Booker has done a great deal of good in its 45 years. It has given novelists from a huge range of national traditions a wider readership, and has done so by its limits. It is just about confined enough in scope to allow every judge to read every book submitted – the year I judged the prize, in 2001, it was about 120 books in total, which was probably not far from the upper limit of possibility. Reading all the books gives the judges real freedom of movement apart from conventional taste. A prize that hands over a large part of the reading to a pre-reading panel, or that divides up the reading between judges, instantly loses a large part of its authority. I spoke to AS Byatt, who won the prize in 1990 for Possession. She made an important point about what will happen when the number of submissions increases next year. "The Booker prize is the only book prize that doesn't sift – odd things crop up. It's a major undertaking, every judge reading everything. This will no longer be possible."

Readers across the globe have understood that the Booker is a recommendation about the British or Commonwealth novel. If you want a recommendation about the all-dominating American novel, there is no shortage of American prizes. But, you will say, the American novel is so much more exciting than the UK or Commonwealth novel. It deserves to be recognised. Perhaps we would be better off with the winners of the Pulitzer, rather than the winner of the Booker. Towering figures such as N Scott Momaday, Michael Shaara, James Alan Macpherson, William Kennedy, Robert Olen Butler, Geraldine Brooks and Elizabeth Strout would, in the last 45 years, have formed the pinnacle of literary achievement: winners of the Pulitzer prize for fiction, all of them. The assumption that an American input to the Booker would have resulted in the triumph of the great masterpieces of American fiction rather than the limp products of British fiction is not very sound. Perhaps, in 1969, N Scott Momaday would have won in the place of PH Newby, which doesn't seem like much of an improvement.

The fact is that prize committees sometimes get things right, and sometimes get things wrong. To increase the apparent diversity available to their choices is not necessarily to increase the final diversity; it often results in the triumph of the most dominant ideology or faction. Of course, prize committees are at the mercy of what is submitted, and the Booker specifically at the mercy of what London publishers think will sell in London. They can't work entirely against that. But it is hard to think of any prize that has gained in authority by demolishing its boundaries. The prize starts to go to any old stuff that demonstrates that the boundaries have gone. It will be a brave Booker panel in 2014 that doesn't give the prize to an American novel, and the precedent of the Booker international prize, open to Americans and consistently won by Americans, is not encouraging.

Many British novelists feel now that the prospect of things that sustained them have been held out, and then withdrawn one after the other. There was the Net Book Agreement, abolished in 1997. There was the collapse of ordinary booksellers under the weight of Amazon. There was the prospect of Google claiming copyright over their out-of-print books. There is the imminent collapse of all those pages of newspaper book reviews, paying the odd and helpful £200 to the not-very-successful writer. There was the collapse of the public library system, which even 40 years ago would guarantee a couple of thousand copies sold of the mid-list English novelist. And so on. Soon, most publishers will prefer the Fifty Shades of Grey model: publish your books yourself for nothing, and if they prove successful with the public, then we'll publish this one, and maybe even the next one. You never know. The pattern of business that produced a Beryl Bainbridge or a Hilary Mantel by supporting a career, and believing in the possibility of rewarding achievement through discrimination, is fading, and will be gone in five years. The sort of English novelists who speak to an English readership about English matters, however refined or profound their technique and subject, is gone. If they do not speak to a global readership – if their jokes give American academic critics a baffled face and elicit the expression "go figure" – then forget it. It doesn't deserve reward or recognition, because the ideal of "diversity" means that all novels, from now on, must be very much the same. Does it matter? Well, only if you want to live in a world where all the different voices of literature matter, I suppose.

No writer embarks on a career with any illusions that the world owes them a living. But I don't think I've ever heard so many novelists say, as over the last two or three days, "Well, we might as well just give up, then." It seems quite baffling to many writers that a major prize that has so successfully promoted them should move its terms so radically and for no good reason. Is there really a problem in making readers aware of the best American novels – one that a revised Booker needs to address? There is a strong danger that the Booker will become viewed as a minor American prize, of some small interest when it, as usual, goes to an American writer, otherwise bafflingly open to a lot of strange foreigners, who thankfully never win. On the other hand, there is no possibility whatsoever, I would say, of the great American prizes opening themselves up to non-Americans. They know what they're about.