Interesting: Noah Smith thinks that what separates literary fiction from genre fiction is that literary fiction has unrealistically interesting characters (as opposed to sci-fi and mystery novels which have unrealistically interesting settings.) He also seems to think this creates a problem of thinking that people in real life are more interesting than they actually are.
I suppose my first response to this is that literature has many more uninteresting characters than it has interesting ones — to every Hamlet there are many Osrics and other bit players.
But secondly, even the Hamlets are interesting to us precisely because we recognize in them our own behavior. Achilles and Agamemnon, far from seeming strange to us, are like two kids quarrelling on a playground, (or more exactly, like two CEOs acting like two kids quarrelling on a playground.)
I think that the first thing people tend to notice about literary fiction is that it can be a little challenging to read and that this points to what really separates literary from genre fiction: its use of language. But perhaps an even more obvious answer is that it is just a story that is artfully constructed. You could of course have a sci-fi novel that was also a literary work, it would just have to be really well told.
As to his second point, about literature making people seem more extraordinary than they are, I think the danger lies the other way, and that readers of literature are apt to read themselves into books in a way that is not necessarily helpful: “Oh, I am just like King Lear,” etc.
Finally, as a side note, I’d observe that having read these Econ / data analysis types for years — Smith and Krugman and Yglesias and the late Kevin Drum — I’ve found it notable that these super smart guys (with Yglesias being somewhat of an outlier, particularly recently) don’t have a lot interest in the literary but are more about sci-fi and history. I don’t have anything to say about that, just something I’ve noticed.