How is Matthew Arnold's poem "The Scholar Gipsy" a criticism of Victorian England?

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This is a very interesting question, which can actually be answered on two fronts. Note that the scholar is described originally as having been a "poor" boy in Oxford—somebody who has made his way to the great University based on his own merits and his fierce intelligence but who has then found it very difficult to exist alongside others who have come from different echelons of society. The strain of "knocking on preferment's door" is eventually too much for him, and he decides to abandon it all in favor of learning the ways of the gypsies.

It's interesting, then, that we see Arnold here making a comment on access to higher education which is a pressing concern to this day, particularly in institutions like Oxford and Cambridge which were traditionally the arena of the wealthy and privately-educated. Why, Arnold asks, do we make things difficult for the most "wise" among us because they don't fit in?

He goes on to demonstrate why the scholar was wise indeed to abandon the "strong infection of our mental strife" which was modern life. It has given him true "hope" (and, indeed, immortality) to have taken himself out of the Victorian push toward ever more education, achievement, and success. He does not have to "suffer" like the others who are still trapped under the weight of expectation.

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In "The Scholar-Gipsy" Arnold criticizes what he sees as the utilitarian, or instrumental, view of knowledge prevalent in Victorian England. Arnold believes that, despite the enormous economic and technological progress made by his society, something precious has been lost: the capacity to take a step back and contemplate the world as it is in itself.

Instead of listening to nature and all it has to tell us, Arnold's fellow Victorians have imposed themselves on the world, making great strides in science and technology, but at the same time not fully understanding the essence of the world in all its richness as many supposedly less advanced cultures do.

That explains why the scholar-gipsy has put the bustling urban environment behind him to lead an itinerant lifestyle, exploring the highways and byways of the countryside in all their quiet splendor. And it is here, amid the beauties of nature, that the scholar will gain true knowledge of both himself and the world around him, something that could never have happened had he remained a student at Oxford.

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Arnold's poem is about the story of a 17th century Oxford scholar who, sensing the useless toil of school, leaves to travel with the Gypsies and learn their secrets. In a larger sense, his poem is about "modernity" in general and the relationship of the individual to society, or more particularly, individual genius to social expectation. That is, the "scholar Gipsy" inspires the poet because he has chosen to abandon the "shocks" of society and embraces a life of the imagination. In so doing, the scholar Gipsy has attained a kind of immortality: exempt from the pressures of "this strange disease of modern life, / With its sick hurry, its divided aims," his spirit endures, both in the pages of the book the poet is reading and also in the collective imagination of society ("Thou hast not lived, why should'st thou perish, so?")

The poem is written in the form of a pastoral elegy, a form that celebrates rustic life but also mourns a lost time of simplicity. However, Arnold subverts this genre by calling into question what is being mourned. To the extent that the poem describes the poet's own inability to make the same choice the scholar Gipsy made to abandon Oxford, perhaps what is being called into question is the Victorian emphasis on work, achievement, and, above all, conformity.

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Victorian England was too centered on technology and "progress" to the point that progress became an end in and of itself.  This is the same problem that Dickens describes in Hard Times.  There was no room for imagination or appreciate of nature.

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