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akannan's comments are good, so I'll start with some of those as my first bulleted point and add another point of my own:
- Traditional literature tends to be elitist (written by the very few for the very few). Modern literature tends to be a little more inclusive and more representative of the diversity of human experiences
- Traditional literature tends to follow set conventions (even when it sometimes parodies those conventions), such as the epic or sonnet or letter. Modern literature sometimes mixes up the conventions in very unexpected ways, striving not for harmony and unity but for dissonance and disunity.
You might want to review the introductions to the different chapters on the Perspectives on American Literature website (see the link below). It's fair, I think, to see the first two chapters, at least, largely as representative of traditional literature and the final two chapters largely as representative of modern literature.
In using the terms "traditional" and "modern," it's worth noting that the two are not mutually exclusively or tied simply to publication dates. In literature from centuries back we're always able to come across things that seem amazingly "modern," and most of our recently published literature is still much more "traditional" (at least in terms of structure and subject matter) than it is "modern."
This particular question will receive many point of offering, bullet-ed or not. I think that you will also find many points of divergence in the answers offered. One similarity between both visions of literature is that they both seek to articulate the human predicament. Tolstoy once said that "All literature seeks to answer two fundamental questions: Who are we and How shall we live?" These two driving forces are present in modern and traditional literature. Another critical point of comparison in both forms of literature is the investigation of human action and the complexity that lies within it. Truly great literature from either time period offers an intricate view of human action and the many factors that initiate it. I would say that one primary difference between modern literature with its traditional counterpart is that the former is more inclusive in terms of its representation. Literature has been broadened to include different voices from different narratives and experiences in the modern setting. At the same time, modern literature has more inter-textual forces which provide inspiration than traditional literature possessed.
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