Folk-lore means that the soul ...

Folk-lore means that the soul is sane, but that the universe is wild and full of marvels. Realism means that the world is dull and full of routine, but that the soul is sick and screaming. The problem of the fairy tale is: what will a healthy man do with a fantastic world? The problems of the modern novel is: what will a madman do with a dull world? In the fairy tales the cosmos goes mad; but the hero does not go mad. In the modern novels the hero is mad before the book begins, and suffers from the harsh steadiness and cruel sanity of the cosmos.
Folk-lore means that the soul is sane, but that the universe is wild and full of marvels. Realism means that the world is dull and full of routine, but that the soul is sick and screaming. The problem of the fairy tale is: what will a healthy man do with a fantastic world? The problems of the modern novel is: what will a madman do with a dull world? In the fairy tales the cosmos goes mad; but the hero does not go mad. In the modern novels the hero is mad before the book begins, and suffers from the harsh steadiness and cruel sanity of the cosmos.

Quotes from the same author

Men always talk about the most important things to perfect strangers. In the perfect stranger we perceive man himself; the image of a God is not disguised by resemblances to an uncle or doubts of wisdom of a mustache.
A change of opinions is almost unknown in an elderly military man.
Men reform a thing by removing the reality from it, and then do not know what to do with the unreality that is left.
The power which makes a man able to entertain a good impulse is the same as that which enables him to make a good gun; it is imagination.
The doctrine of human equality reposes on this: that there is no man really clever who has not found that he is stupid.