Stephen Greenblatt writing on what The Merchant of Venice taught him about ethnic hatred and the literary imagination, for The New Yorker:
Last year was the five-hundredth anniversary of the creation of the Venetian ghetto. The Venetians had some uncertainty and disagreement about how to mark this anniversary, and one could see why. Starting in 1516, Jews, who had previously lived in the city wherever they chose, were required by law to reside and to worship in a small, poor area, the site of a former copper foundry. (The Venetian word for such a foundry was geto.) There they were permitted to run pawnshops that lent money at interest. They could emerge during the day to engage in a limited number of occupations—including buying and selling old clothes, laboring on Hebrew books in print workshops, teaching music and dance, and practicing medicine. But at night they were obliged to scuttle back to the ghetto, where they were shut in behind locked gates, guarded by men whose salaries the Jews themselves were required to pay. Jewish physicians were permitted to go out during the night to attend to their Christian patients; no one else could leave until morning.
This is hardly an arrangement to celebrate in the twenty-first century, but it was an early attempt in modern history at a form of modus vivendi that would permit Venetians to live in proximity to an intensely disliked but useful neighbor. The usefulness was not universally acknowledged. At the time, in Italy and elsewhere, itinerant preachers were stirring up mobs to demand the expulsion of the Jews, as had been done recently in Spain and Portugal and, centuries earlier, in England. A scant generation later, Martin Luther, in Germany, urged the Protestant faithful to raze the Jews’ synagogues, schools, and houses, to forbid their rabbis on pain of death to teach, and to burn all Jewish prayer books and Talmudic writings. At the time that the ghetto was created, there were people still living who could remember when three Venetian Jews, accused of the ritual killing of Christians for their blood, were convicted of this entirely fantastical crime and burned to death. In Venice, locking the Jews up at night may have given them a small measure of protection from the paranoid fears of those with whom they dealt during the day. The ghetto was a compromise formation, neither absorption nor expulsion. It was a topographical expression of extreme ambivalence.
Shakespeare could in principle have heard about it, when he sat down to write his comedy; the ghetto had been in existence for some eighty years and there had been many English travellers to Venice. Indeed, there is evidence that the playwright took pains to gather information. For example, he did not have his Jewish characters swear by Muhammad, as fifteenth-century English playwrights did. He clearly grasped not only that Jewish dietary laws prohibited the eating of pork but also that observant Jews often professed to find the very smell of pork disagreeable. He marvellously imagined the way that a Jewish moneylender might use the Bible to construct a witty Midrashic justification of his own profit margin. He had learned that the Rialto was the site for news and for trade, and that Shylock would conduct business there.
But Shakespeare seems not to have understood, or perhaps simply not to have been interested in, the fact that Venice had a ghetto. In whatever he read or heard about the city, he appears to have been struck far less by the separation of Jews and Christians than by the extent of their mutual intercourse. Though Shylock says that he will not pray with the Christians or eat their nonkosher food, he enumerates the many ways in which he routinely interacts with them. “I will buy with you, talk with you, walk with you, and so following,” he declares. To audiences in England—a country that had expelled its entire Jewish population in the year 1290 and had allowed no Jews to return—those everyday interactions were the true novelty.