"I had to find a religion," said Graham Greene, "to measure my evil against." This puts Greene the "Catholic novelist" (a description he detested) into correct perspective: before he chose Christ as his highest value, he was first a man obsessed with scale itself. No 20th-century writer had a subtler mind for human comparison. Where lesser novelists deploy broad strokes to separate good guy from bad, Greene was the master of the multiple distinction: the thin lines that separate evil from cruelty from unkindness from malevolent stupidity. His people exist within a meticulously calibrated moral system. They fail by degrees. And so there is no real way to be good in Greene, there are simply a million ways to be more or less bad.

This detailed ethical realism is an aspect of Greene often neglected in favour of the more baroque aspects of his oeuvre - the forthright sexuality, the wanderlust, the journalistic reportage - traits which seem to place him securely amongst the company of his fellow adventurers: Erskine Childers, Len Deighton, Alec Waugh, John Le Carré. Certainly Greene was always a writer interested in thrill - as a teenager he played Russian roulette of the deadly, non-metaphorical kind. Still, it's sometimes good to remind oneself of the fact that upon Greene's own book shelves Henry James reigned. Whatever else he was, Greene was a literary double agent, and some of the depth of his work is revealed when we reinscribe Henry James (rather than, say, his childhood hero H Rider Haggard) as his central antecedent. In Greene's novels, as with James's, all the vicissitudes of human personality are brought to the table for dissection.

Distinctions of character that we fondly imagine concrete, upon which we define ourselves ("But I am kind, where he is only cynical"), are revealed to hold little currency in the face of the human extremities: war, death, loss and love. "Human nature is not black and white but black and grey." Greene is not the first novelist to note it, but his grey was marvellously various.

Into this grey area we must place the shady triad of The Quiet American: the honest venality of Phuong, the disengagement of Fowler, and the innocence of Pyle. Isn't it a brilliantly constructed novel? It reminds one of the game jack straws, in which the aim is to take each stick in turn without disturbing the others. It is a masterful trick to balance these three people against each other - comparing and contrasting their cynicisms, their hopes, their personal failures - and yet weighting the situation in such a way as to never allow us to make that final, satisfying judgement upon their characters which would signal that the reader's work is done. Greene did not like to permit his readers this satisfaction: "When we are not sure, we are alive."

In the case of The Quiet American ethical ambivalence is built into the very foundation of the novel. I spoke earlier of a calibrated moral system, and this reminds us of the careful, judicious James of The Europeans, but what a different job it is to place your people in a battlefield instead of a drawing room! You cannot be sure about anything on a battlefield. Greene was compulsively drawn to some of the messiest conflicts his century had seen, wars that people continued to fight long after the reasons to fight them had grown obscure.

His characters radiate the ethical uncertainty and confusion that comes from living a war-without-end. But despite this, in Vietnam Phuong and the foreign correspondent Fowler have found each other, a blessing which seems, to Fowler at least, as much as can be hoped for. Theirs is a small ledge between a rock and a hard place. "I'm a great believer in purgatory," said Greene in an interview, "Purgatory, to me, makes sense ... one would have a sense of movement. I can't believe in a heaven which is just passive bliss."

Into Fowler's purgatory comes Pyle, who believes in Heaven. He arrives armed with his grand narrative about Vietnam, which he will force Vietnam to fit, by hook or by crook. But he is not alone in clinging to misleading, self-serving stories in this novel. Pyle has his story about Fowler, but Fowler also has his own about Pyle (the dominant narrative of the book), a story that mistakenly casts him as more of a quiet American than he turns out to be. Both men have their equally distorting, unavoidably colonial, story about Phuong.

None of these tales is to be trusted; they are shot through with personal need. Greene understood the selfish currents that run through our deepest motivations (he had been extensively psychoanalysed by a Jungian when he was still a young teenager) and he was unique in tracing the progress of these desires from their intimate microcosm (two people in love) to their geopolitical macrocosmic consequences. He knew one country could fall for another, get involved with it, grow tired of it and break its heart. In The Quiet American personal motivations are linked with their political mirror twins. Listen to Fowler's running commentary on his ex-wife's letter. Wherever there is a person mentioned, think of a country:

Who could blame her for seeking my own scars in return? When we are unhappy we hurt.The hurt is in the act of possession: we are too small in mind and body to possess another person without pride or to be possessed without humiliation. Unfortunately the innocent are always involved in any conflict. Always, everywhere, there is some voice crying from a tower. I thought, "How much you pride yourself on being dégagé, the reporter, not the leader-writer, and what a mess you make behind the scenes. The other kind of war is more innocent than this. One does less damage with a mortar."

Greene's personal-political layers work not by flattening the complexity of the relationships but by artfully recognising the connections and drawing them out. Love of a foreign country and love of its women are honestly expressed as related phenomena (when Greene was asked why he came to Vietnam he answered "It was partly the beauty of the women - it was extraordinary.") The simultaneous desire we all possess for both the liberty of our lovers, and their submission to our will, applies equally to Pyle's contradictory relationship with Phuong and the country she was born in. These mirrored applications are where Greene showed himself not only more than a hack but also more skilled than many English novelists.

In this emblematic love triangle Phuong is of course representing Vietnam to some extent, but she is still everywhere her idiosyncratic self. She is the girl in white dancing better than Pyle, she is curled up in bed reading about Princess Anne. She keeps her counsel. One feels that where Greene did not know enough of her life, or could not imagine, he resolved not to describe. As a result Phuong floats free of her symbolic weights; she has her own inviolate life in the rue Catinat - buying silk scarves, drinking milkshakes - outside the reach of Fowler's narrative eye, and thus denying the reader's base and natural request that she embody her entire country.

We sense a real, breathing woman, not just the idea of a woman that Pyle is trying to steal from Fowler. Part of Fowler's battle is to defend her essential Phuong-ness from Pyle's ossifying rhetoric. He is only partially successful at this. There are moments in which Fowler is self-conscious enough to glimpse the fact that his protection of Phuong against Pyle's idea of her leads him into new caricatures of his own. In fact, his first-person commentary is often more alert to the dangers of colonial caricature than Greene's own when the novel seems to fall into a more generalised third person: '"For voices have a colour too, yellow voices sing and black voices gargle, while ours just speak."

It is to be noted that ideological blind spots like these are first creative failures. It would have taken a further, fulfilling, imaginative leap on Greene's part to conceive of what Fowler sounds like to Phuong. Such lapses are unusual, however. Despite Fowler, this is a fiercely politically engaged work. The dissection of political naiveté in the person of Pyle seems to gain in resonance with each year that has passed since publication:

I hope to God you know what you are doing here. Oh I know your motives are good, they always are ... I wish sometimes you had a few bad motives, you might understand a little more about human beings. And that applies to your country too, Pyle.

But the quiet American does not learn. To the end he remains determined that belief is more important than peace, ideas more vital than people. His worldly innocence is a kind of fundamentalism: he believes that there must be belief. By hook. By crook.

Reading the novel again reinforced my fear of all the Pyles around the world. They do not mean to hurt us, but they do. Greene's great achievement is to allow a cynic like Fowler to champion the cause of life by insisting on the authenticity of those deaths Pyle considers to be merely symbolic. Fowler is at least idealistic enough to believe that there is not an idea on this earth worth killing for. When Pyle interrogates Fowler as to what, if anything he believes, he says "Oh, I'm not a Berkeleian. I believe my back's against this wall. I believe there's a Sten gun over there." Pyle replies, "I didn't mean that."

Greene's work does mean exactly that. The hope he offers us is of the kind that only close observers can give. He defends us with details, and the details fight the good fight against big, featureless, impersonal ideas like Pyle's. Too much time has been spent defending Greene against the taint of journalism; we should think of him instead as the greatest journalist there ever was. If more journalists could report as well as Greene bringing us the explosion in the square, how long could we retain the stomach to fight the wars we do?

The devil is in the details for Greene, but redemption is also there. The accretion of perfectly rendered, everyday detail makes us feel human, beats away the statisticians, tolls us back to ourselves. How many journalists can write reportage - or anything else - like this?

... he smiled brightly, neatly, efficiently, a military abbreviation of a smile ... the gunfire travelling like a clock-hand around the horizon. "Will you have a cup of tea?" "Thank you, I have had three cups already." It sounded like a question and answer in a phrase book. I have read so often of people's thoughts in the moment of fear: of God, or family, or a woman. I admire their control. I thought of nothing, not even of the trap-door above me: I ceased, for those seconds, to exist: I was fear taken neat. At the top of the ladder I banged my head because fear couldn't count steps, hear, or see. Then my head came over the earth floor and nobody shot at me and fear seeped away.

When Greene died in 1991, Kingsley Amis - a man not given to generous estimations of his peers - gave him a neat, fitting obituary: "He will be missed all over the world. Until today, he was our greatest living novelist." Amis's and Greene's vision of a great novelist was different from the present conception: it was of a working man with a pen. An unpretentious man, in and of the world, who wrote for readers and not critics, and produced as many words per day as a journalist. English writers these days work in spasms, both in quantity and quality, and so keen are they to separate "entertainments" from "literature" that they end up writing neither. This was one of the few distinctions Greene did not concern himself with. Reportage turned to novel turned to film; he got several short stories from the material he found in his own dream diary. He even occasionally dreamt to order: finding himself stuck in the middle of a novel one day, he went to bed and slept on the problem, waking up in the morning fully furnished with the solution. "The book was hesitating ... the dream came and seemed to fit."

Any writer would envy an imagination of such irresistible contrapuntal thrust - he never lacked a story, he was drowning in them. He famously said that childhood is the credit balance of the novelist, and Greene's childhood - the misery of his public school, the power struggles with his headmaster father, the teenage seduction of his own psychiatrist's wife, the flirtations with madness and God - well, he was never, ever going to be in the red. There are many natural storytellers in English literature, but what was rare about Greene was the control he wielded over his abundant material. Certainly one can imagine nobody who could better weave the complicated threads of war-torn Indochina into a novel as linear, as thematically compact and as enjoyable as The Quiet American.

© Zadie Smith, 2004

· This essay by Zadie Smith is her introduction to a new centenary edition of The Quiet American by Graham Greene which will be published by Vintage on October 7. To order a copy for £6.99 with free p&p call Guardian book service on 0870 836 0875.