What does Excalibur, the sword, symbolize in Thomas Malory's Le Morte d'Arthur? 

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More than anything else, Excalibur symbolizes power. Whoever wields this mighty sword is universally recognized as the rightful king of England. But as well as earthly power, Excalibur also embodies a more supernatural force. It's not enough to wield power; like the sword itself, it must be used responsibly. Excalibur, then, symbolizes transcendent moral values against which the actions of the respective kings of England are to be judged, and more often than not, found wanting.

That's certainly what happens in the case of Arthur Pendragon. He loses sight of what his responsibilities as king entail, as can be seen when he turns a blind eye to the illicit affair between Lancelot and Guinevere. Arthur is such a firm believer in chivalry that he becomes blinded by it, refusing to contemplate that Lancelot would ever dream of violating the knightly honor code. This willful blindness constitutes a gross dereliction of duty, an abnegation of the ominous responsibility symbolized by Excalibur, and it eventually leads to Arthur's downfall and the fall of Camelot.

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In Le Morte d'Arthur, Excalibur symbolizes the righteous order of the monarchy and the natural supremacy of its power. When Mordred strikes a fatal blow to Arthur, Arthur uses his dying breaths to order it thrown into the lake it came from. Bedivere, who claims to accept the charge, actually hides Excalibur behind a tree. Bedivere's disobedience represents the futility of the monarchy to fully control the transferral of power down generations: the motivations of others always come into play.

When Bedivere confesses his transgression to Arthur, he agrees to finally return it to the lake. The Lady of the Lake intercepts him, retrieving the sword, suggesting that power and monarchic duty is not meant to be stored away. She shakes Excalibur thrice and makes it disappear, implying that the force of destiny will decide its next owner. After this final act, Arthur is finally accepted into the afterlife, the Isle of Avalon, suggesting that Excalibur has met the right fate.

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