Grossman's provocative argument, which he will make at the Festival of Dangerous Ideas on Saturday, signals a changing literary scene that has pulled authors and critics off their pedestals.

"The fundamental principle that has organised our literary universe for centuries, that some books are good and some are bad, some have value and some don't, is crumbling," he says.

"There used to be very few authoritative voices deciding what mattered, and they were critics and academics. Now, largely because of Amazon and blogs, we have gone to millions and millions of voices."

Classic novels are ranked lower than bestsellers such as The 13-Storey Treehouse by Andy Griffiths and Terry Denton, a book with "a different kind of value", he says. "Any classic novel has hundreds of one-star reviews saying how terrible they are: 'Mrs Dalloway is worthless, dull and too long'."

Grossman's own reviewing style has changed in the 15 years he has written for Time: "When I began I would say a book was good or bad. Now I find myself saying I think it is good or bad. I'm aware that my opinion only reflects my own experience."

Postmodernism also changed the way we read in recent decades with its mixing of styles and genres, Grossman says. Whereas modernism promoted the idea of high and low literature, the difference between "literary" and "popular" writing has blurred.

He gives the example of The Secret History by Donna Tartt, a 1992 literary novel that was also a mystery thriller and a huge bestseller that helped changed the rules.

When he began writing, Grossman says, "I fancied myself as a Zadie Smith or a Jonathan Franzen" and took years to accept that he was a fantasy writer. He describes his books as hybrids - fantasy novels written in a literary style "with big words and an active interest in the inner lives of characters".

He was so upset by negative reader reviews of his first book, Warp, in 1997 that he anonymously wrote some fake reviews saying the book was "hilarious" and "fabulous". He later revealed his deception and Amazon's unreliability in an article for Salon.

At 47, Grossman says he is less "chippy" or defensive now, and he agrees that with 200,000 novels a year published in the US, readers have to find ways to distinguish between them.

The son of New York writer-academics, and a Harvard graduate himself, he belongs to the literary establishment. He lives in Brooklyn with his Australian wife, Sophie Gee, a Princeton academic and novelist, and their three children.

One of his early Australian visits was to the Perth Writers' Festival and he used the sense of being "on the edge of the earth" in his fiction.

Grossman credits J.K. Rowling as "transformative" for fantasy and The New York Times said his 2009 book, The Magicians - about a young man who learns modern sorcery at an exclusive American college – "could crudely be labelled a Harry Potter for adults".

The third book in the Magicians trilogy instantly went to No.1 on the New York Times fiction bestseller list and Grossman has just sold a new book to his publisher - "a different kind of fantasy, King Arthur and knights in shining armour".

He loves the Game of Thrones novels, which he says will never win a Pulitzer Prize but have subtle plots told from many intersecting viewpoints.

"If you diagram it out, they are so intelligent and complex. I wonder if we as critics appreciate that. We're good at talking about beautiful sentences, but we're less good at talking about plot."

For Grossman the best result of the democratisation of literature is "we're now celebrating voices that were marginalised in the past - women, of course, and people of colour and from different social backgrounds", writers such as Zadie Smith, Junot Diaz, Jhumpa Lahiri and Colson Whitehead. "Writers my age look very different from a generation older."

Lev Grossman will give his talk, There Are No Good Books, at The Festival of Dangerous Ideas at the Sydney Opera House, on September 3.