To begin with something other than words words words...here are two great paintings:
The top one is Jean-Auguste-Dominique Ingres' 1832 portrait of Louis Bertin; below it is Pablo Picasso's 1910 portrait of Ambroise Vollard. The great historical change that intervenes between these two paintings and makes the Picasso possible is the birth of Modernism.
Most English-language fiction written today--even today, one hundred years on--is written as though Modernism never happened: as though Joyce never wrote Ulysses; as though Woolf never read Ulysses; as though Kafka was just another bureaucrat with a nasty cough; as though Pynchon never discovered the Keebler elves pissing in the pot of gold at the end of his Rainbow. Whenever we read a contemporary novel, we should ask ourselves, "Would Jane Austen have easily understood this book?" If the answer is 'yes,' we're probably reading a 19th-century novel in modern dress. The ranks of these imposters are legion. Leaving aside genre fiction (leaving aside, that is, most of the novels that are actually written and read--a bizarre thing to do, admittedly) which is all essentially a pop survival of Romantic and Victorian literature (the romance novel is degraded Bronte and Austen; the mystery comes out of Poe and Doyle and Collins; science fiction descends from Verne and Wells; the historical novel from Scott and Hugo; the horror novel is the screaming issue of a menage a trois among Poe, Mary Shelley and Bram Stoker), it's easy to see the pre-Modernist essence of such popular 'literary' writers as John Irving (Dickens in tranny drag), Jonathan Franzen (a Trollope with a hard-on), Sarah Waters (a Victorian sans censorship), or Salman Rushdie (a Bollywood production of a Tristram Shandy presentation of a Henry Fielding film). This is not to say that I don't greatly admire the above writers. Irving's books are enjoyable, satisfying reads; I liked much of The Corrections; Tipping the Velvet was great, juicy fun (readers of that novel will appreciate the dirty double entendre); and Salman is, needless to say, The Man. I just want to point out that Jane Austen probably wouldn't have had much difficulty understanding their works. (Although Rushdie, to his credit, would likely give her the most trouble.) Faced with Ulysses or Finnegans Wake, however, the esteemed Ms. Austen would surely respond with an indignant, "Wh-Wh-What?!?! This is not a novel; it is not even written." Modernism was a bomb that blew the gaudy Victorian Revival mansion of literature to bits. But most of our writers today prefer to ignore this fact and continue to take tea at four o'clock in the ruins of the old living room, obliviously sipping their oolong from a charred and broken cup while the rubble smoulders around them.
Having thus mocked these writers, let me now rush to defend them. There's nothing morally wrong (or even necessarily politically retrograde) with writing as though Modernism never happened. Art, as the sage Wilde observed, has nothing to do with morality. (Except, I would add, when it does.) Literature does not grow organically, and metaphors that figure the history of literature as a kind of tree or plant or evolving animal lie at the root (to indulge exactly such a metaphor!) of countless critical errors. The novel is not a snake that sloughs off the dead skin of one era and slithers onward never to return. Sometimes novelists create their most startlingly original effects by squeezing into old snakeskin. (W. G. Sebald's acknowledgement of the influence of Adalbert Stifter and Gottfried Keller is a good example of this; an even better example, in another medium, is the way the Canadian filmmaker Guy Maddin has recovered the aesthetic of silent film and put it to ultramodern uses.) Literary history is not linear; it's a crazy, spiralling curve that crosses and recrosses itself, but never at the same point. It's a doodle, not an axis.
That said, we should also recognize that the Modernist challenge was so radical, so explosive of past artistic forms (now's the time to scroll up and look again at the paintings by Ingres and Picasso--or to read any chapter of Anna Karenina alongside any chapter of Nabokov's Ada), that to ignore it or to take it for granted as a safely 'historical' phenomenon is to shirk one's artistic duty and risk becoming a high-class hack. So I think there is something aesthetically wrong with writing pre-Modern novels in modern dress, James in jeans, Trollope with trollops, etc. This kind of writing avoids the challenge of developing new forms for a new time and rests easily in the old, dead paradigms of the past. However lively it may seem, it is a coffined literature, the novel on a bier.
When I look around for books that buck this trend and show signs of life (which has nothing necessarily to do with 'realism'), I note the ghastly irony that two of today's brightest lights come from beyond the grave. W. G. Sebald and Roberto Bolano, both of whom were killed by their bodies while their minds and imaginations were still green, accepted the challenge of Modernism and set about inventing new forms to fit the mess of modernity. Among the living, Thomas Pynchon continues to kick against all the pricks (long may he weave). And William T. Vollmann may be the most ferociously ambitious writer alive. His energy and curiosity seem boundless, and his talent burns like whale oil--it's so bright we have to wear shades. If any American writer of our time is truly a child of Melville (that arch-Modernist a century ahead of his own time), it's Bill Vollmann. When I read his book (the word 'novel' doesn't quite capture it) The Atlas recently, I experienced a rare transport of cultural optimism. There are other writers I could mention, all fighters of the good fight: Toni Morrison, Philip Roth, Carlos Fuentes, Ngugi wa Thiong'o, Gabriel Garcia Marquez, Samuel Delany, Stephen Wright, the currently-underrated E. L. Doctorow, and many others both living and recently dead. The real stuff is out there (but for how long?), and if we can see past the screen of banal novels and commercial products pitched in the few remaining newspaper book sections, we might find something that will truly blow our minds.