What was the reception of Jane Austen's work at time it was written? For example, did people understand she was writing a satire?  Are there good sources to study the change in time?

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Jane Austen lived and wrote during an age when women’s roles in society continued – as would be the case for many more decades – to be constrained by antiquated notions of gender inequality, a situation that compelled her to publish her novels anonymously.  That, combined with the still-new concept of the fiction novel (despite well-known examples of such works of literature having been produced as far back as the 15th and 16th centuries), conspired to prevent Austen from receiving the acclaim she deserved and limited the exposure of her novels to only select audiences, principally, the same upper classes that she satirized.  In her chapter included in the volume Jane Austen: Her Life, Her Time, Her Novels (Janet Todd, editor), Mary Waldron places critical reception of Austen’s novels within the literary historical context of the time.  The novel as a form of nonfiction literature was still somewhat new and unconventional, so it could be expected that it would not be welcomed by many critics.  As Waldron wrote,

“Reviewers had become accustomed to treating the novels which came under their scrutiny with a degree of contempt; some might be better than others, but they were on the whole hardly worth serious consideration.”

Public reception of Austen’s novels, however, tended to be more welcoming, if limited to a relatively small demographic.  With the release of Sense and Sensibility, Waldron wrote, “[i]ndividual readers, as evidenced by a mass of informal comment in letters and diaries, were often intrigued and enthusiastic, but more public commentators, though they invariably wrote anonymously, felt it incumbent upon them to be cautious.”  Writers of “letters and diaries,” however, especially those that survived, were generally not representative of the population at large.  Additionally, this divide between professional critics and public consumers is not unusual, certainly not today.  The public frequently responds differently to books and films than the critics, who tend to be more cynical.  Because contemporaneous readership of Austen’s novels was limited to certain social classes, one cannot definitively state that her writing was particularly popular or unpopular with the masses, who were probably not avid readers of novels during Austen’s time.  The Wikipedia entry on “Reception History of Jane Austen,” however, does provide useful information on both the critics’ and the public’s reaction to the publication of Austen’s works. 

How many of Austen’s readers during her time (and, remember, she published anonymously because of her gender) recognized the satirical nature of her work is equally uncertain.  Whereas published accounts of Austen’s life, including those cited here (with URL links provided below) note the influence on her of Henry Fielding’s Shamela, a satire of Samuel Richardson’s Pamela: Or, Virtue Rewarded, Fielding’s novel is unquestionably and blatantly a satire of Richardson’s book.  Austen, in contrast, employed a considerably more subtle approach to satirizing her subjects.  While literary critics today, and during the 19th century, can recognize the satirical nature of novels like Pride and Prejudice, it is uncertain whether those who read this novel upon its original publication recognized themselves in it.  The Wikipedia article, for instance, quotes Anne Milbanke, future wife of Romantic poet Lord Byron, as writing that “’I have finished the Novel called Pride and Prejudice, which I think a very superior work.’ She commented that the novel ‘is the most probable fiction I have ever read’ and had become ‘at present the fashionable novel’.”

Quotes like that from Milbanke lead one to conclude that the satire was missed.  Additionally, as the “Flavorwire” document the link to which is provided below notes, a number of prominent literary figures from later years, including Charlotte Bronte and Ralph Waldo Emerson, held Austen in fairly low esteem.  Indeed, that article includes a quote from Mark Twain that is so irreverent it suggests that even that great satirist missed the point:

“Everytime I read ‘Pride and Prejudice’ I want to dig her up and beat her over the skull with her own shin-bone . . . I could read [Poe’s] prose on salary, but not Jane’s. Jane is entirely impossible. It seems a great pity that they allowed her to die a natural death.”

The sources provided below, along with the volume edited by Janet Todd referenced above, which includes Waldron’s discussion as well as two additional chapters devoted to Austen’s critical reception during different eras, will provide a good sense of the era in which Austen lived and worked and the manner in which her novels were received.