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Nick is a newcomer to New York at the beginning of the novel, having come from the Midwest, where life is characterized by innocence and simplicity. Young and attractive, he befriends Jordan Baker, Jay Gatsby, and is reunited with his cousin Daisy. As one of the "beautiful people" he "succumbs to the lavish recklessness of his neighbors and the knowledge of the secret moral entanglements that comprise their essentially hollow lives". He differs from Gatsby in that, being a realist, he is completely aware of his loss of innocence, watching himself "driving toward death in the cooling twilight".*
(Quotes from enotes link cited below)
Nick Carraway belilevs himself to be a nonjudgemental person in the novel. Yet, he realizes he must be guilty of judgement to some extent when he is surprised by his fascination with Gatsby, who he comes to realize is someone he never would have associated with. Nick begins to see that some "shady" characters really have a better code of honor, than those of the "elite", such as Tom and Daisy Buchanan.
Nick is the only character in 'The Great Gatsby' who can change. Daisy and Tom are too superficial and absorbed in living in wealth and Gatsby set himself a dream as a young child and has stuck to that throughout his life. Therefore, the other main character cannot change. However, Nick's changes begin during his participation in World War One, although this is not mentioned, it is obvious that his perception of people and the world in general has changed. Nick sees so many corrupt acts around him (adultery, lying, hyporiticism, dirty business deals etc.) that he first tries to block them out, by acting artifical to fit in with his new 'friends'. However, once he realises that the people he is surrounding himselves with are liers and frauds, he begins to distance himself from them. The first obvious instance of this is when Gatsby is 'watching over' Daisy and Nick narrates that "He [Gatsby] was clutching at some last hope and I couldn't bare to shake him free." This quote displays how Nick has given up on Gatsby and society's superficiality and corrupt doings. This is one of the major instances of change in Nick's life.
At the beginning of Nick's reminiscence of the summer he met Gastby, he has "small-town syndrome." He had just returned to Middle America (America's heartland and the center of conservative living) from WWI, where he had glimpsed everything from freedom to death. His horizons had been broadened significantly, so when he returned after the war, he felt stifled in the Midwest; thus his longing for the decadent and fantastic lifestyle of New York, but the problem with the fantastic is that it rarely has anything to offer beneath the surface.
When he first arrives in New York, Nick is fascinated by the lives of the wealthy and the freedom they embody (including freedom from responsibility, evidently). However, as the novel progresses, he sees the impact of this behavior on the lives of others; he recognizes the atrocities that the elite of society commit toward those they consider beneath them (i.e. Tom's abuse of Myrtle Wilson; Tom's treatment of George Wilson; Tom and Daisy's method of dealing with Daisy killing Myrtle; Tom ultimately setting Gatsby up to be killed and not feeling any remorse).
By his thirtieth birthday, Nick realizes that this crazy, superficial lifestyle is not what he desires at all, and that he misses the wholesomeness of the Middlewest. In this sense, Nick becomes rather representative of the 1920s: the turmoil and free living of the early part of the decade leading into the conservative 1930s.
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