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This line is delivered as Lear has been stunned and hurt by his daughters' schemes to put Kent in the stocks and take his knights and retainers away from him. Regan and Goneril have asked him why he needs these people around him anyway, when he obviously has the power to command people. He responds by saying that "man's life is cheap as beasts," meaning, in context, that the need for certain trappings and accoutrements was the only thing that separates us from animals. He is humiliated to have lost the trappings of power, because it makes him feel old and useless (or at least he imagines that is how people will see him.) Lear proceeds to fly into a rage, and it is clear that he is becoming a pathetic figure, recognizing that he has been betrayed by two of his own daughters. This sets the stage for his famous scene on the heath, in the midst of a storm, raging at the elements.
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