Do the townspeople know the lottery's purpose? Is its omission for readers significant? Is it intentional?

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The exact purpose of the lottery held in Shirley Jackson's "The Lottery" is never explained. It seems like the lottery is so old that none of the townspeople can even remember why it began. This omission is certainly significant and intentional. It is intended to show that the townspeople are only continuing to hold these horrible annual ceremonies because of superstition and tradition. The reader can see the town would be better off if they gave up the lottery.

The oldest man in the gathering is called "Old Man Warner." He is a staunch supporter of the lottery but hasn't any better understanding of its original purpose than anyone else. 

Old Man Warner snorted. "Pack of crazy fools," he said. "Listening to the young folks, nothing's good enough for them. Next thing you know, they'll be wanting to go back to living in caves, nobody work any more, live that way for a while. Used to be a saying about 'Lottery in June, corn be heavy soon.' First thing you know, we'd all be eating stewed chickweed and acorns. There's always been a lottery," he added petulantly.

The saying, "Lottery in June, corn be heavy soon," strongly suggests the present-day lottery is descended from some ancient agricultural fertility ritual. Old Man Warner suggests the crops would not grow without the annual human sacrifice and that everyone would subsist at the level of primitive hunter-gatherers. He is the staunch exponent of superstition and tradition.

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