Critic speak is tough, but we've got you covered.
Quote :Marxism and Literature (1977)
Literature lost its earliest sense of reading ability and reading experience, and became an apparently objective category of printed works of a certain quality. [...] Three complicating tendencies can then be distinguished: first, a shift from "learning" to "taste" or "sensibility" as a criterion defining literary quality; second, an increasing specialization of literature to "creative" or "imaginative" works; third, a development of the concept of "tradition" within national terms, resulting in a more effective definition of "a national literature."
"Literature" used to mean your smarts—it had more to do with literacy than literariness. As a category, it used to include science and politics and philosophy and any other subject with a textbook that costs more than $100. Then "literature" came to mean "cultured" books—stuff that it looked good to have read, like War and Peace.
Later, the word "literature" started to mean specifically fiction, and then lo and behold, people started squawking about specific "national" literatures, like English literature, American literature, Russian literature, French literature, Klingon literature, and on and on, as if these were and had always been coherent traditions.
And why is that? Well, this is Marxist crit, so you can probably guess: the idea of a national literature strengthens the idea of the nation itself, and who ultimately benefits from that? The people with the moolah, of course.