Explain what Gonzalo says about the commonwealth and why in act 2, scene 1.

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In this scene, Gonzalo notes the loveliness of the island they are shipwrecked on and states that it provides everything they need to live. He says that if he were in charge of it, he would do everything differently from how it is normally done in Europe:

I' th' commonwealth I would by contraries
Execute all things. For no kind of traffic
Would I admit. No name of magistrate.
Letters should not be known. Riches, poverty,
And use of service—none. Contract, succession,
Bourn, bound of land, tilth, vineyard—none.
No use of metal, corn, or wine, or oil.
No occupation. All men idle, all.
And women too, but innocent and pure.
No sovereignty—
He says he would run the island as a true commonwealth, with no king, no businesses, no bureaucracy, no education, no ownership of land, and no servants. In fact, nobody would work, but the women would remain innocent and pure. He goes on to state in the next passage that nature would produce all that everyone needs to eat, which would be held in common. There would be no need for weapons, because people would live peacefully. He also states:
I would with such perfection govern, sir,
T' excel the Golden Age.
When the others laugh, Alonso says they are laughing at Gonzalo's words. Gonzalo says that is fine because he said all this to make them laugh. He adds that he
in this kind of merry fooling am nothing to you.
While Gonzalo insists his words mean nothing to Alonso, Gonzalo has, nevertheless, spoken them, and these utopic longings for a different kind of world will perhaps reach the ears of other people who wish they could start over with such a clean slate and build a new and better society. What Gonzalo is envisioning is subversive—and quite different from the world of hierarchy and servanthood that Prospero has built on the island. Gonzalo, who has a generous heart, offers an alternate vision of what the world could be—yet one that is meaningless to his aristocrat followers.
Gonzalo's words suggest that he—and Shakespeare—have read Montaigne's essay "Of Cannibals," translated into an English a few years before Shakespeare wrote this play. In this essay, Montaigne describes a supposed country in the New World run on principles very similar to those Gonzalo describes, in which the "savages" are far wiser than the Europeans.
Without ever coming out and opposing monarchy, Britain's form of government, Shakespeare spreads a different vision of how the world might be organized by putting these words into Gonzalo's mouth.

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