[In the following review, James praises Trevor Nunn's adaptation of The Merchant of Venice for PBS, including Henry Goodman's “mesmerizing” Shylock and Derbhle Crotty's “commanding” Portia.]

Revenge, justice, mercy. Words that seem socially and politically charged today were already resonating through The Merchant of Venice, a play so deeply rooted in an enduring question—how should justice, mercy and vengeance be balanced?—that it speaks to any number of historical crises, including our own. Trevor Nunn's inspired idea was to transplant the play to the 1930's, when World War II was looming and anti-Semitism was bluntly expressed.

Stylishly set in cafe society, this astute Merchant gets the new season of “Masterpiece Theater” off to a smashing, unexpectedly relevant start. (The series has moved to Monday nights on PBS.)

Mr. Nunn's Merchant was first presented at the Royal National Theater in 1999, and despite a few cinematic flourishes it remains unapologetically stage-bound. The actors have modulated their performances for the camera, which frequently closes in on their faces, but the set design is spare. This theatrical version is so vibrant and rich, however, that it makes you wish you had seen it onstage.

The tone is set with the opening credits, in which sepia film reveals the social chasm separating the characters. There are people dancing in posh nightclubs and drinking champagne, as if they were in an RKO musical; there are scenes of a Jewish ghetto, a generic version of the Lower East Side at the time. When the actors appear onstage, the film turns to color but retains the stylized feel of the past with a neutral palette of grays and beiges. Chairs and tables suggest a nightclub, where men wear tuxedos, the women are for sale, and the aura of decadence comes to include a song with a deliberate nod to Cabaret.

Antonio, the merchant who mortgages his fleet of ships so his friend Bassanio can try to win the hand of Portia, is given a reason for his extravagance here: we see him gently, quickly stroke Bassanio's hair. Without overplaying the erotic attraction to the point where it distorts Shakespeare, the gesture makes it more understandable to a modern audience when Antonio agrees to give his fortune and a pound of his flesh to Shylock as collateral.

Henry Goodman's mesmerizing performance as Shylock reveals why he is so haunting a character. Beneath the surface details of the yarmulke and accent, this Shylock is vengeful, imperfect, unlikable, but also persecuted, emotionally wounded and deserving of sympathy.

His anger is vehement and direct when he delivers a speech about Antonio to the camera, beginning, “I hate him for he is a Christian.” And his injured soul is also evident when he offers Antonio a friendship of convenience and is rejected. “For your love I pray you, wrong me not,” he says, with no realistic hope that will happen. By the time he gets to his most famous speech—“Hath not a Jew eyes? If you prick us do we not bleed?”—Mr. Goodman's Shylock is furious, motivated equally by social mistreatment and by his profound heartbreak because his daughter has eloped with a Christian.

His humanizing performance is helped by transporting the play to the 30's. The period neutralizes the persistent debate about the characters' anti-Semitic remarks, not by attributing them to Shakespeare's own blased era, but by framing them as the product of a vicious historical moment in our own. Launcelot, one of Shakespeare's clowns, becomes a stand-up comedian here, his descriptions of Shylock turned into the kind of jokes about Jews that were common at the time.

Most of the other performances are serviceable, with the great exception of Derbhle Crotty's commanding Portia. She is convincing as a mature woman who accepts suitors in her Art Deco home as they try to choose correctly among the gold, silver or lead caskets. There are comic touches in these scenes, notably when the Prince of Arragon arrives; he is a flamenco dancer who fractures English with a Spanish accent.

But Ms. Crotty's power truly emerges when Portia poses as a male lawyer. Her “quality of mercy” speech is not recited as airy poetry, but as a desperate conversation with Shylock, as she tries to persuade him not to claim his pound of flesh because “earthly power” is closest to God's “when mercy seasons justice.” Shylock of course insists on and is finally undone by an unmerciful adherence to the letter of the law, as this Merchant makes Shakespeare's questions seem eye-openingly fresh.