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The novella is set up like a play or a screenplay. Setting is described first and then characters enter it and exit it as if on a stage or shooting location. The action takes place over 3 days (Biblical number), and it uses four major locations:
1) The idyllic "Garden of Eden" wooden area by the river.
2) The bunkhouse on the ranch
3) Crooks' room (in the barn)
4) The barn proper
The fifth (5th) location is not real: it is the fantasy ranch that George, Lennie, and Candy save up money to buy where they can farm and tend rabbits--the "American Dream" haven from a heartless world.
Notice: only one location, the bunkhouse, is meant for human dwelling: the rest are more or less for animals. Also notice: only one location, Crooks' room, does not contain violence (see below).
Also mentioned are the boss' house and the cathouse. Lennie and George visit the boss' house when they are hired (George is supposed to do all the talking). Lennie cannot visit the cathouse.
Notice that the locations can be broken down in terms of socio-economic status and violence:
1) by the river: secret world only George and Lennie know about, unlivable; a place to camp (low class); the scene of the Lennie's mercy killing
2) the bunkhouse: where the men stay (low class). infested with lice; place of violence (where Lennie breaks Curly's hand and where Carlson takes Candy's dog to shoot).
3) Crooks' room (lowest class); only the outcasts visit; yet, it is a library, the most intellectual place on the ranch; it's a section of the barn, not far from the animals, not meant for human dwelling. No violence committed here (Crooks suggests something might happen to George and Lennie gets mad, but it is purely conjecture).
4) the barn (below class); place for animals; another scene of a crime (murder of Curley's wife)
So says one critic: "The tight structure of setting, revolving around single locations and continuous timing, make the novella seem almost as if it were set as a play."
In my opinion, the major significance of the settings of the story is that they emphasize the theme of people messing up the plans of other people. The place where George and Lennie camp by the creek is peaceful -- it is their heaven, in a sense. The ranch and the people are where trouble happens.
When George and Lennie go to the ranch, essentially nothing good happens. Before that, they are more or less happy, but when they get there, things fall apart.
It's probably pushing it too far, but I suppose you could argue that the creek is heaven and that Lennie goes there, sees a dead relative, and dies himself.
One significance of the location in the book Of Mice and Men is that Steinbeck used an area he was from. He knew the history of the area as well as the population of people.
When Steinbeck set out to write several of his novels, he wanted to use a setting that he knew and loved. The Salinas Valley and river where places he had roamed and fished. He was also aware of the type of farming and the living styles of the single men in the area who worked the farms.
The setting demonstrates the loneliness of the type of environment which Lennie, George, and the others worked. They were relatively isolated from others. Curley's wife is pretty much trapped on the ranch with no female friends.
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