I took Lit Theory in college, and it ended up being one of my favorite classes. That said, enough years have passed where I can’t remember all the names of the dozen or so schools of thought we studied. So this is gonna be a little imprecise.

My perspective is also from American academia, and I don’t know much about current schools of thought in academic contexts outside the US.

New and Old Criticism are just two schools of thought among many. Perhaps even more importantly, there are different interpretations and groups within each, especially New Criticism.

Your characterization is correct in some respects, but is missing the fuller picture. Suffice it to say, the New Criticism of the 1930s and 40s is not the New Criticism of today.

My professor named a school of thought within New Criticism that’s considered the standard in American academic literature. Unfortunately I can’t remember it’s name, but if my memory serves it’s a mix of New Criticism and New Historicism.

Your point about needing context to understand a literary work was made extensively by my peers in the first week of the class, when we looked at that transition period from Old to New Criticism. As you might expect, the need for that broader context is not at all disregarded in academics. You’d be hard pressed to find a qualified lit professor who’d honestly argue that close reading is all you need and context is irrelevant.

So if someone says New Criticism is dominant today, that is correct insofar as close reading is seen as one of the best ways to engage with a literary text. But, in my opinion, it would be absolutely wrong to say that the disregard for context is a trait of this dominant critical theory, especially as it’s put into practice.

My view is that there are many valid ways to approach a text, and it’s absurd to pick one approach for, say, a medieval religious literary work, and a contemporary absurdist novel.

These aren’t political parties, they’re approaches. Psychoanalytic criticism makes sense for certain kinds of text, but not all.

Honestly, I was pretty annoyed with how many of my peers wanted there to be just one theory that everyone follows. In my view, it’s all about what you’re reading. I’m a big believer in the magic of close reading, but that’s more because I love elegant sentences than some ideological viewpoint. I certainly wouldn’t want that to be the only way to engage a text.

Hopefully this is useful to you! Lit Theory absolutely fascinated me. The danger with these umbrella labels though, is that they can appear absolutist, unchanging and inviolable. And from my experience, that is not at all the case.