When J.R.R. Tolkien’s The Hobbit was published 80 years ago on Thursday, no one had any idea what would follow. An Oxford professor wrote a book for children that was a kind of blown-up fairy tale—no big deal. The book did all right, his publishers asked for a sequel, and they got it, 17 years later, in the shape of The Lord of the Rings. This became probably the most popular novel of the 20th century.

More than that, it changed the shape of publishing. Heroic fantasy became big business, as it still is. But would J.K. Rowling, Terry Pratchett, and all the others ever have found publishers, or maybe even thought of writing, without Tolkien’s example? George R.R. Martin, author of the A Song of Ice and Fire series that the television megahit Game of Thrones is based on, said simply, “We are all still walking in Bilbo’s footsteps.” Bilbo from The Hobbit, that is, not Frodo from Lord of the Rings.

What was so new in 1937, and why is the spell still working in 2017? Back then, heroes were right out of fashion. In World War I, 254 of Tolkien’s own schoolmates had been killed, including two of his closest friends, and he only survived by contracting trench fever. The post-war mood was bitterly ironic.

What Tolkien did was invent a new kind of hero: hobbits. Hobbits are small and unwarlike, with no interest in glory. But they plug on, like infantry soldiers. And challenge brings out the best in them.

To start with, Bilbo is viewed with contempt by the tough, greedy dwarves, who are out to rob and kill a dragon, a truly heroic enterprise. He does what he can to help, but it’s not very much. He gets better as the going gets tougher, and the important thing is that he’s at his best when he’s on his own, in the dark. He beats Gollum at riddles, fights off giant spiders, tricks the elves—and then goes down a tunnel with a giant dragon at the end of it.

Bilbo has cold courage—but also moral courage. He hands over the dwarves’ chief treasure to Gandalf the wizard to use as a bargaining chip, and then he goes back to the dwarves—and a very hostile reception—out of loyalty. Generations of children have learned from Bilbo that it’s not just waving a sword that makes a hero.

Hobbits are attractive because they know how to get along with each other and with others. “Live and let live” is their motto. They have a vestigial and largely ceremonial government, which delivers the mail, collects strayed cattle, and turns out the militia if it’s really necessary. Everything else is private and personal. What makes the system work is social cohesion, which isn’t enforced, just taken for granted.

The hobbit society channels pure nostalgia for a world that never existed, some might say. Alternatively, it can be viewed as a powerful statement of the virtues of traditional culture in a literary world that has gotten used to sneering at them.

For a children’s book, The Hobbit has surprising depth of emotion, including grief. Many a child and parent has been moved to tears by the dying farewell of Thorin Oakenshield, asking forgiveness from Bilbo, “child of the kindly West.” By contrast, the long conversation between Bilbo and the dragon Smaug adds to humor a glimpse of a cold and subtle intelligence without human sympathies. Is it fantasy? Or good psychological preparation for the real world, as children’s books need to be?

Dragons, anyway, have never been the same since. Nor have heroes.

Tom Shippey is the author of The Road to Middle-Earth: How J.R.R. Tolkien Created a New Mythology.