In "The Merchant of Venice", does Venice assume common humanity - or is the state racist?
Is this a state that assumes a universal common humanity, or makes such universalism conditional on being "in Christ," a citizen rather than a stranger? Does Christianity reward prodigals or thrifty merchants?
The historical backgroud also plays a role in answering this question:
In the context of "The Merchant of Venice," there was a merchant aristocracy--descendants from those who had fled Italy under the attacks of Goths, and later Attila the Hun--who all knew each other; trading was the lifeblood of Venice. This close acquaintance easily led to the business cliques so cogently mentioned in #2. Thus, partnerships evolved which any Venetian with a little money could share in the trade. It is presumed that Shakespeare based his plot for "Merchant of Venice" on the collapse of one of these "colleganza."
At the time of the play, Jews were confined to the Ghetto Nuova (ghetto means "casting" in Italian--this is the first ghetto and is yet standing) and could only trade in textiles. They were confined to money-lending and being pawnbrokers. Banks kept the interest rate low so that these money lenders and pawbrokers did not make large profits. Of course, during Shakespeare's time there was strong anti-Jewish feeling as well as within the setting of the play in which the aristocracy viewed the Venetian Jews as encroaching into certain economic spheres.
Undoubtedly, there is no common humanity to Venice or its court. Look, purely and simply, at the number of times Shylock is called "Jew", and the number of times he is called by his name - just in the last scene of the play. You won't need much more convincing: and that's even before reading his early speeches about the fact that Antonio has spat upon his "Jewish gaberdine" in the Rialto.
In my opinion, what Shakespeare depicts is a group of extremely bad Christians, who have forgotten that key Old Testament teaching that money is the root of all evil. There's no Christian worship or church or anything in this play: the "Christians" are basically a cliquey business network, rather like modern city boys. They are bad Christians - money-grabbing, racist, prejudiced, and more or less entirely without moral compunctions (even down to the way Bassanio just hands over his ring, easily, glibly breaking his marital promise).
None of this, however, justifies Shylock's, admittedly appalling behaviour, and actually - just as Antonio, Bassanio and all are bad Christians - Shylock is a bad Jew. It seems a very modern and pertinent thought of Shakespeare's: just because you align yourself to a religion, that doesn't mean that you can't be a thoroughly horrible and immoral person when it comes to your own personal (to use the key pun of the play) bonds, bounds, and boundaries.