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The term lost generation is expressed through the characters of Jay Gatsby and Daisy Buchanan. The term refers to the loss of innocence in society after WWI. The great war changed everyone's perception of life.
Life was dominated by the pursuit of material wealth and social position, with a great abandon of morality.
James Gatz from a poor family in the Mid-West transforms himself into a millionaire, through questionable means, bootlegging, and other illegal activities, to create a new life.
Jay Gatsby's life is a great illusion, empty of true substance, dominated by lavish parties and his tireless pursuit of Daisy.
Although Gatsby has transformed his humble early life into that of a dazzling millionaire, he remains unfullfilled and miserable.
Daisy Buchanan, a debutante, who marries Tom because he is rich, eventually becomes Gatsby's lover. However, she is cold, and indifferent to him. She cares for nothing.
"Daisy's voice is the voice of money. Her whole careless world revolves around this illusion: that money makes everything beautiful, even if it is not."
"Daisy flirts with Gatsby enjoying his obsessive interest until she commits murder and he takes the rap. Then, she hides behind the protection of her husband, a cruel brute, who uses and abuses people."
The lack of a moral center in any of the characters in this book, except for Nick Carraway, depicts the nature of the society in the period dubbed the Jazz Age.
The term "Lost Generation" generally refers to the disillusionment that followed WWI. Prior to the War there had been a great deal of "progress" in sciences both practical and theoretical, and there was a sense that progress was going to be endless. WWI used the technology that they thought represented progress and turned it into weapons unlike any that had gone before. The airplane, which had the promise of moving people and goods in a manner almost unimaginable in the past, was used to deliver destruction on a scale unimaginable in the past. This lead to disillusionment for an "entire" generation. The thin veneer of civilization was revealed to be a lot thinner than it appeared.
So you have the somewhat valueless generation of which Gatsby is a part. Money, alcohol, parties and other forms of shallow behavior are symptoms of lack of belief in real social progress; the acquisition of conspicuous wealth is what seems to count. Jay's pursuit of Daisy mirrors this view. He sees possession of her as his dream although she is hardly worth it. Somehow the American Dream, the "city on a hill," has been replaced by tinsel on Long Island.
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