Besides utilizing the helpful characterizations provided at the eNotes summary, you might begin by examining the context, or setting.
Leading up to this conversation, Balducci speaks of "wartime" and how "things are brewing." In short, there is French-Arab conflict, and Daru and Balducci are the minority of French citizens who are either teaching or policing the area. Daru is expected to switch from his role as educator to role as soldier/officer due to it being "wartime."
What choices does Daru make that Balducci questions, making Balducci call him "cracked"?
- Daru not restraining the Arab's hands with rope...
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