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What did Shakespeare mean by 'We will all laugh at gilded butterflies'?

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The quotation is from Act V Scene 3 of King Lear, the last scene of the play. Lear and Cordelia have been captured by the English forces after their defeat in battle. Cordelia wants to confront her sisters. Lear says:

"No, no, no, no! Come, let's away to prison.
We two alone will sing like birds i' th' cage.
When thou dost ask me blessing, I'll kneel down
And ask of thee forgiveness. So we'll live,
And pray, and sing, and tell old tales, and laugh
At gilded butterflies
, and hear poor rogues
Talk of court news; and we'll talk with them too-
Who loses and who wins; who's in, who's out-
And take upon 's the mystery of things,
As if we were God's spies; and we'll wear out,
In a wall'd prison, packs and sects of great ones
That ebb and flow by th' moon."

Lear is focusing on what they will do to pass their time in prison, that they can enjoy themselves with simple childlike pleasures like singing and telling old tales. He says they can listen to what happens in court without caring about it, because since he has recovered from his madness all of his anger at Goneril and Regan is gone. He just doesn't care about them any more. It is quite possible that the "gilded butterflies" are intended to be understood simply in a literal sense, as golden butterflies which are always pleasant to watch. That is quite consistent with the rest of the speech (unlike some of the interpretations which follow)

"Gilded butterflies" could generally mean someone overdressed or overly fancy in order to appear more than they are, like a courtier. Such courtiers are the "great ones that ebb and flow by th' moon"

Lear could be comparing his avaricious daughters to gilded butterflies, appearing to be valuable and beautiful on the outside, but are mere whimsical and insubstantial inside. A further overtone is in one meaning of "gilded", which is "covered in blood", an obvious metaphor for violence or death. Laughing at the above would be a form of derision. (Is this consistent with the rest of the speech?)

Meaning of Guided: Today's meaning is "covered with gold." "Gilded" in archaic usage meant "to smear with blood." (Source: Merriam Webster Online).

Note: A butterfly is already something of great beauty and functionality. Gilding it - that is, gold-plating it - is an example of human folly, an example of human arrogance in thinking that gilding a butterfly makes it better when in fact, it would destroy both its great natural beauty and its ability to fly. Like applying layers of makeup to an already beautiful woman, obscuring her natural beauty, Lear recognizes the idiocy of this, and thus can refer to laughing at this sort of thing. And of course, the "gilded butterflies" themselves can refer either to his own daughters or others in the court, who, in their natural state may well be beautiful human beings, but now, being "gilded" only look good to those who don't know better, to those who like the artificial beauty of the *appearance* of gold. And gilding also means the butterflies can no longer fly. They can no longer really function. They can only sit there, doing nothing. And, on yet another level of this metaphor, let's not forget that gilding is nothing but a thin gold-leafing, thus making it literally worth almost nothing. A gilded butterfly only looks like solid gold. It is not. And those who know better, like King Lear finally, can laugh at this kind of stupidity.
(So, this would be the opposite of the first answer above, in which gilding is said to make an insubstantial thing more beautiful. Which it can, but Shakespeare chose something already naturally beautiful to be gilded, instead of something not, for example, a rat...)

Another comment:
Used transf. for To smear (with blood). Common in 16-17th c "Shakespeare John II. i. 316 Their Armours that march'd hence so siluer bright Hither returne all gilt with French~mens blood."

I would actually think that the reason we would be laughing is because a butterfly covered in gold most likely will not be able to fly. This could be a reference to the pursuit of wealth, in the sense that it destroys true nature...
"gild" in in Shakespeare's time (dictionary 1300-50; ME gilden, OE -gyldan; akin to gold) meant something that was gold. Something gilded was something dipped in gold, or accented with gold. Butterflies in most of the world, as well as in England during Shakespeare's time, represented the human soul, especially those human souls waiting to pass through purgatory. If a butterfly is gilded, it is beautiful; but it is also weighed down by the gold since butterflies are very light. Therefore, it will not be able to fly, and we, the ungilded will laugh since they will not be able to fly to the world beyond (or heaven). Gold either represents evil and corruption, or success. This could mean that the people who are consumed by their want for money and their obsession with it, aka the rich, will be weighed down by the same thing that makes them "beautiful" to others.
Their gold will weigh them down spiritually, leaving the downtrodden on top come judgment day.

We will all laugh at gilded butterflies.
I believe that "guilded butterfles" refers to trying to improve something that is already beautiful.
Guilded also refers to a gold plating or any "adornment from the natural"
If you imagine a golden plated butterfly, it could only be less beautiful.
Thanks for the feedback!

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