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What's the significance of the uncle's quote "The Arab's Farewell to His Steed" in "Araby"?

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In "Araby," the recitation of the poem "The Arab's Farewell to His Steed" is an ironic commentary on the boy's mission to buy a present for the girl at the bazaar. The girl of which the boy is trying to impress relates to the beautiful steed in the poem, foreshadowing the boy's disillusionment with Araby and all he had associated with it.

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The uncle's reciting of the poem can be taken a number of ways. First, his recitation of the poem is an indication of his absentmindedness. He can't seem to remember (or attach any importance to) the boy's desire to get to Araby; he is too lost in his own musings to really pay attention. It is telling, for instance, that he can recite the poem from memory and must be told twice where it is the boy wishes to go.

Second, the uncle undoubtedly is making a connection between the name of the fair (Araby) and the title of the poem ("The Arab's Farewell to his Steed"). His recitation is inspired by this association, and the fair becomes in this context an exotic and sentimental place. The uncle's comment about "all work and no play" also emerges from this association; he thinks he is doing the boy a favor in letting him go, but he is actually clueless about the whole situation.

Third, the poem, which is about the sale of a beloved horse, is a kind of ironic commentary on the boy's project, which is to impress a girl by bringing her something from the fair. Both the poem and the boy's mission emphasize the transactional nature of the boy's desire. To his thinking, he has made a kind of "deal" with the girl—if he brings her something, that will create a kind of connection between them. But the boy's fixation on buying something for this girl is, in its own way, as clueless as the uncle's conflation of "Araby" and "Arab." In each case, affection is not something that can be purchased.

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The boy's uncle comes in drunk, having completely forgotten he had promised to take the boy to the bazaar called Araby. The bazaar means very little to the uncle, though it is very important to the boy. The uncle, at the aunt's urging, gives the boy a florin so that he can go by himself, though it is very late. Then, as the boy is leaving, he hears his uncle about to recite the opening lines of "The Arab's Farewell to his Steed" to his aunt. It's very possible that the word Araby connects in his uncle's mind to the word "Arab" in the poem. The opening lines are:

My beautiful! my beautiful! that standest meekly by.
With thy proudly-arched and glossy neck, and dark and fiery eye!
Fret not to roam the desert now with all they winged speed:
I may not mount on thee again – thou’rt sold, my Arab steed!

These words of sentimental verse foreshadow the end of the boy's dream of wooing and winning the unnamed girl, who is melded in his mind with the exotically named bazaar, Araby.

The boy has been thinking of the girl as his beloved, his "beautiful," just as the speaker of the poem thinks of the steed as his beautiful beloved. Nevertheless, by the end of the story, the boy realizes, while standing in the almost empty temple of commerce which is the bazaar, that he will no longer get by on the false dream of Araby, just as in the poem the Arab will no longer ride on his steed.

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"Araby" is very much a story about disappointed hopes, letting go of childish fantasy, and learning that the world does not bend or change for one person's dreams.

In his attempt to get to Araby, the young boy meets with many delays that frustrate him in his desire to purchase something special for Mangan's sister, the girl with whom he believes himself to be in love.  The first of these delays is the lateness of his uncle on whom he must wait to give him the money to go.  When his uncle finally arrives, he sits down to his dinner (another delay!) and the narrator must wait for several minutes before asking him for the money.  Even then, his uncle jokes that many people are already in bed.  He asks, again, where the narrator wants to go (more delays), and then asks if the boy knows the poem "The Arab's Farewell to his Steed."  

The connection of the story to the poem seems to lie in the frustrated hopes of the young narrators.  In the poem, an Arab boy is compelled to part with his beloved horse when the horse is sold.  It's quite a romantic poem, with lots of beautiful descriptions of the boy's fervent love for his wonderful horse, how he aches not to have to give the horse up and dreams of riding away from the new owner to be able to keep his horse forever.  Yet, in the end, the boy must give him up.  Likewise, in "Araby," the young narrator lives on his dreams and is only beginning to acknowledge the reality of a life that moves on without regard to his love, a life where "sordid" things like money are considered to be of much greater value and importance than fantasies and feelings.  The uncle, perhaps, has a sense that the narrator is at such a point in his life and has yet to realize the nature of the world.  And although the boy leaves before he can hear the poem and make that connection, he learns that harsh lesson in the end.

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