Don Quixote, published in two parts, 1605 and 1650, is generally considered the first novel, or at least the first European novel. The novel, as a genre, tells fictional stories of individual lives. Novels are also read by individuals (often sitting alone in a room), which sets this genre apart from plays that also deal with the lives of individuals. Histories tell the stories–purportedly true–of civilizations, nations, or cultures, wars, etc. The only way to portray the life of an individual person, including their thoughts, feelings, etc., is in fiction. Only in fiction do we read about what someone ate for breakfast two hundred years ago. Some people might try to trace to novel back to Homer’s Odyssey because the work tells the fictional story of an individual named Odysseus, but The Odyssey is an epic poem and it was performed before an audience; it wasn’t generally read until it came out in modern-language translations in the 17th century. A Latin translation was completed in the 16th century.
The novel didn’t really establish itself as a legitimate art form until the late 18th century, which was when functional differentiation took off in the Western world.
In a primarily stratified or centralized society, there can be no individuality in the modern sense. The same can be said for the public. There was no public in pre-modern society because there was no individual. The individual/pubic distinction arose together as a result of functional differentiation, which legally separated the individual off from the family Only when a man does not own his wife and children do concepts like human rights make sense. So functional differentiation gave rise to concepts–or topics of communication–like the individual person and human rights, as well as the novel.
The dark side of functional differentiation, where social systems develop operational closure, is shown best in Kafka. In Kafka’s work the individual cannot communicate at all with machine-like bureaucracies. The Castle and the Law are impervious to K’s communicative efforts.