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Northrop Frye's work on/in archetypal criticism is as relevant today as it was when he was writing, in my opinion. Together with the work of Joseph Campbell - another scholar developing Carl Jung's ideas of the collective unconscious along literary lines - we might argue that some of the most literary of literary criticism belongs to the Jungian psychoanalytical school of thought.
Where other modes of criticism have veered toward politics, linguistics, and a generally Marxist conception of literature, Frye's archetypal criticism offers a compelling way to read literature without being divisive or political.
(This can be argued to be a weakness, as we have seen:
American disciples of deconstruction, postcolonial criticism, and other poststructuralist critics would criticize the work as tendentious and inadequate.
I would argue, however, that remaining apolitical is a strength of Frye's critical theories.)
The powerful idea that stands at the center of Frye's theory (and Campbell's too) is that, in literature, we attempt to organize our world using basic elements of a human, shared imagination. In one way or another, the collective unconscious provides a base from which we can draw meaningful models (characters, situations, etc.). These models can then be applied to contemporary situations, literally and metaphorically, to create what amounts to new mythologies.
The only truly controversial aspect of this criticism is the place the the collective unconscious takes in it. However, we can argue that the collective unconscious does not need to be seen as an actual psychological structure. If one prefers, the collective unconscious can be seen as an abstracted literary history that accounts for mythic characters and situations that recur from culture to culture. The collective unconscious can, in other words, be seen as a "literary consciousness" from which writers draw familiar figures for use in fiction.
If mythology is intended to explain human culture to itself and Frye's theories essentially focus on this notion, we might expect Frye to be a popular critic in an age of uncertainty and complexity. Archetypes are interesting and compelling, as a literary theory, and they have the great virtue of being simple.
Frye establishes that mythic patterns underlie all narratives and that the history of literature reveals an evolution of forms which can be precisely charted by such simple methods as assessing the role and nature of the hero.
While reading for archetypes allows us to maintain our understanding of the complexity of a text, this mode of criticism also gives us a useful and agile paradigm with which to make literature explicable and meaningful to ourselves and our communities.
The most glaring "flaw" in Frye's theory is his insistence on objectivity. While the great majority of reading theories and critical theories have acknowledged the notion that all interpretation is driven by subjective and culturally mediated lenses, Frye's theory seeks to establish objective methods of classification of literature.
Despite this element of Frye's theory, archetypal criticism maintains a real power to communicate the basic social and psychological functions of literature.
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