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In this scene, Solanio and Salerio are discussing how Antonio has lost a ship carrying expensive cargo, thus making it even less likely that he would be able to pay Shylock the 3,000 ducats that he owes him. Shylock enters and claims that both Solanio and Salerio knew that his daughter Jessica was running away to elope with Lorenzo. He is also aware that Jessica stole money and goods from him before she left. Shylock feels wronged in many ways and is quite defensive at this point.
Salerio tells Shylock that Antonio has lost a ship at sea. Shylock replies that it is another bad business deal. He adds that while Antonio used to lend money to other Christians, when he (Shylock) lent Antonio the money, Antonio called him a loan shark. Shylock is showing how there is a double standard here. Antonio generously lends money, while Shylock is a loan shark. Again, he feels like he is unfairly treated simply because he is a Jew.
Salerio replies that taking a pound of Antonio's flesh won't do Shylock any good; it's not as if he could get any money out of it.
Shylock acknowledges this but then says:
To bait fish withal. It will feed nothing else, it will
feed my revenge. He hath disgraced me and
hindered me half a million, laughed at my losses . . .
The pound of flesh is worth nothing - monetarily. But Shylock says, half joking and half serious, that he will use it for fish bait. But really, he means that it will feed his revenge, or satisfy him. In other words, he thinks he will feel better knowing that Antonio will suffer. Such is the nature of revenge. Shylock feels that Antonio (and other/all Christians) have treated him like he is inferior; therefore, he feels justified in exacting such revenge.
This monologue begins the most famous speech in the play. This is where Shylock claims that Jews and Christians are the same, experience the same human emotions, injuries, etc. "If you tickle us, do we not laugh? If you poison us, do we not die?" Shylock makes significant points here, but the problem is that he uses these points to justify his lust for revenge.
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