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There are canons that everyone has to read in college. Those are "Great Literature" mostly because somebody decided they were Great a long time ago. I always sort of base it on whether it has stood the test of time, or whether it has the power to change you.
Shakespeare's work has stood the test of time very well and is still relevant. The characters are archetypal and can be easily found in any community. The stories ring true still today. I don't personally find this to be quite so true in Victorian literature, although the millions of Jane Austen fans would probably eviscerate me for saying so.
Books like A Passage to India or The Great Gatsby or Ulysses still have the power to change an individual. After you read them, you are left with a new view of the world, like your eyes have opened a little bit wider.
To me, however, these criteria apply just as well to a book coming out next month as a book published 400 yrs ago. We never know when the next Great Literature will appear, but only that it will.
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