AN –What I mean by 'Narrative' and 'Dialogue': 'Dialogue' is what characters say. 'Narrative' is everything else, especially when it is said in 3rd person.
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The reader is not stupid. You know this. You, a reader, are not an idiot. You, like other readers, but might not be quick, but are certainly not glacial on the uptake. Given enough hints, you can probably figure just about anything out.
For example, if a particular character makes a habit of pouring boiling lead down children's throats, we will assume he is not a nice person. If you call him 'Dark Lord', or others only speak of him in whispers, we will become even more sure of this conclusion. In fact, we will become positively certain that he is an unkind, discourteous, and all-around unpleasant sort of person.
So calling him 'the evil overlord' in the narrative would be overkill (1).
Why you should be subtle
Aside from insulting the reader's intelligence, you are also making no friends if they happen to disagree with your firmly stated opinions. People hate having things pushed on them. In extreme cases, lack of subtlety results in your spoon-feeding the story to the readers--so they won't have to think about a thing. And if they don't have to think about your story, they won't think about your story.
If you're too heavy handed, you can and will sick people out when discussing topic that are, well, 'icky'. To say nothing of what you'll do when trying to generate controversy.
Readers are reading your story because they want to be entertained primarily, educated second, if at all. If you confuse these priorities, you will irritate them.
Furthermore, if you mess up, it's much easier to backtrack if you only left subtle hints of your passage then when you made full-fledged road markers. If nobody knows exactly what you're thinking, nobody can call you out on it.
Lastly, it's often easier to be realistic when you're not overdoing things. In real life, people can and do go to extremes, both good and evil--but very rarely. And heck, even when people go extreme in real life it's hard to us to believe it. We'll want to know where the catch is. Suspension of disbelief is the name of the fiction game, and real life is rarely so simple that you can be blatant about it.
Unsubtle things those authors do
My major personal sticking point for unsubtlety is words in quotation marks. No, not dialogue. I mean--well, I mean "these" (2). These marks are used at times such as 'The overlord provided all of us with "good homes", or so he said.' Words used "like this" give the reader the impression of the narrator doing the 'quote-unquote' thing and smiling snidely at their own wit.
The problem with this is that it breaks up narrative, it can do unpleasant things to the voice of your narrator (there's bitter with sarcasm, and BITTER with "sarcasm"), it's unprofessional (look at paperback novels and then look at the books you read for Lit. class. Which have more quotation-mark sarcasm?), and it's unsubtle. The author's position is so achingly obvious that you're better off with "The overlord made us live in hovels--and like it!", which has all the wry irony without the annoyance.
Actually, in my example, you just need to take out the "". You'll still have the 'or so he said', thus you'll still have the air of sarcasm.
Another unsubtle mistake is when the prose turns florid discussing certain characters. This makes the writer's feelings and plans for said character fairly obvious, and can also break up the flow of the story (to say nothing of creating some truly horrible phrasings). Using 20 words to describe things that could be done in far less is another tip-off. Or turn-off, as the case may be.
What the characters do can be as unsubtle a message as what they say- like when all of the heroes follow Buddhism and the villains are atheist. When all of the villains support dog fighting, and a good deal of the populace does as well, but none of the heroes will even consider that despicable practice (except to speak out against it, leading to- you guessed it- preachiness and unsubtlety.)
Characters should not make comments about themselves ("Generally, I'm rather impatient, but today I feel a strange peace inside"), nor should they tell other characters things they already know ("As you know, Thyren, our people have been at war with Ardga for centuries"), unless they have recently had an epiphany and want to tell the world about it, or if Thyren in the second example has come out of a coma or has drastic amnesia. In which case the 'as you know' wouldn't be true.
Times not to be subtle
See, unsubtlety has its place, like most things in life:
When explaining something complicated and/or important to the plot, just say it outright. Be clear. Make an impact with you explanation. If, when going over your draft, lots of reviewers say 'you were a bit to blatant' or 'I could probably figure that out on my own', remove or opaque it.
When making understatements, you have to be unsubtle. That's the whole point.
If an unsubtle character is speaking, he probably shouldn't beat around bushes. But he's welcome to beat anything else. Just don't except some readers (read: Sage) to like it.
If the reviewers you trust consistently tell you that you aren't making sense with a particular scene or topic, write the whole thing out as clearly as possible, and then jazz it up with flourishes and smoke as necessary.
When working with an especially dense and/or emotional crowd, or when a character is manipulating an especially dense and/or emotional crowd, pull out as many 20 words and florid prose as you wish. But don't go assuming the readers are dense. It's not nice.
When space is at a premium, as in a short story, tell rather than show things that are necessary but whose explanation is not part of the plot (example: backstory that explains why a character is the way she is).
The Subtle Knife
This is a reference to two things: Philip Pullman's book (nice) and Occam's Razor (also nice). In short: most things will only need to be said once. Do not constantly remind the reader of minuscule, unimportant points.
Some things will not need to be said at all. Find out what they are, and do not say them.
The briefer the passage, the less chance you have to screw it up.
How to be subtle
Don't do the things I mentioned above.
For those you who want more in the way of advice: do not use very many adverbs or adjectives. The more, the more irritating. Use actions and smart word choice to show character's emotions, personalities, and feelings.
Use the subtle knife frequently. Shorter is better.
Always show instead of telling with one thing: emotions. There are very few reasons why you should tell us a character is traumatized rather than, say, mentioning that she's shaking and crying and about to throw up.
Orson Scott Card once wrote a story (a short story, but a story nevertheless) about guilt. He made a point to never use the word 'guilt'. Not once. I'll let you figure this one out on your own.
And the Cliché ending
And thus I leave you, happy readers, with a final bit of advice: do not finish your story with 'The End'. The reader is smart. If nothing more is written, they'll get the hint.
Probably.
(1) Calling the man who pours lead down live children's throats 'Darken Rahl' would also be unsubtle.
(2) It's okay to use 'these marks' to mark examples. At least, I hope so, or otherwise I'm out one job and a lot of readers.