The comic scenes in Shakespeare's tragedies, as a whole, function as relief from the intensity of emotion he presents throughout these works. Even before Act V of Hamlet, so much catastrophe has already occurred that the audience needs a break from it. The gravedigger scene also makes the following confrontation between Hamlet and the others, at Ophelia's funeral, all the more poignant and horrifying, because it contrasts with the seemingly light-hearted tone of Hamlet's wordplay with the gravedigger.
However, a slightly different interpretation is possible. Looked at from another perspective, it's somewhat misleading to suggest there is a sharp divide, a dichotomy, between the tragic and the comic in Hamlet. They exist side-by-side within the same scenes and stretches of dialogue. As Hamlet speaks to the gravedigger and to Horatio , he makes observations that are profound, deeply insightful, and yet simultaneously hilarious about the pathetic nature of...
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life and of human frailty:
Why may that not be the skull of a lawyer? Where be his quiddities now, his quillities, his cases, his tenures, and his tricks? Why does he suffer this rude knave to knock him about the sconce with a dirty shovel, and not tell him of his action of battery?
The scene is a kind of compressed version of the ambiguous moral atmosphere of the entire play, in which the absurdity of all these tragic happenings comes to a head in the observations Hamlet makes about seemingly irrelevant things. So, it is not entirely a preparation for the fight between Hamlet and Laertes by means of contrast. Instead, it's a buildup to that confrontation in which Hamlet's simultaneous craziness and insight into life are steadily increasing, only to burst forth fully during the funeral. Hamlet is a man pushed to the limit, and the trajectory of his descent occurs in a continuous movement from the first scene of Act V and into the second scene without a break.
As this play approaches its denouement, the emotional intensity becomes almost overwhelming. Shakespeare understood that the audience needs a break at this point before the deaths of Gertrude, Claudius, Laertes, and Hamlet occur. The playwright offers this comic relief just prior to Hamlet's and Horatio's witnessing the funeral of Ophelia in a scene that is at once poignant and anger-filled. Laughter is the necessary outlet; this emotional discharge helps the audience prepare for the final, desperately tragic scene of the play.
There is only so much intensity an audience can take within a couple of hours' watching. With every death or battle, there must be some accompanying humor to release the tension and allow the audience members to relax a bit in order to prepare for the next intense murder or battle. In tragedies, a minimum of five people die...there are many more than that in Hamlet. In fact, the majority of deaths take place in the very next scene from this comic relief.
Shakespeare liked to insert a comic scene before a major event in his tragedies (Mercutio in the town square before Romeo and Tybalt fight, the gatekeeper in Macbeth who jokes with Macduff before Duncan's body is discovered, etc.). Act 5 is the act with the deaths of Gertrude, Laertes, Claudius, and Hamlet in them. Everything comes out into the open in this act which makes it of supreme intensity and importance.