A laborer finds Don Quixote lying near the road and leads him home on his mule. Don Quixote showers the laborer with chivalric verse, comparing his troubles to those of the great knights about whom he has read. The laborer waits for night before entering the town with Don Quixote, in hopes of preserving the wounded man’s dignity. But Don Quixote’s friends the barber and the priest are at his house. They have just resolved to investigate his books when Don Quixote and the laborer arrive. The family receives Don Quixote, feeds him, and sends him to bed.
The priest and the barber begin an inquisition into Don Quixote’s library to burn the books of chivalry. Though the housekeeper wants merely to exorcise any spirits with holy water, Don Quixote’s niece prefers to burn all the books. Over the niece’s and the housekeeper’s objections, the priest insists on reading each book’s title before condemning it. He knows many of the stories and saves several of the books due to their rarity or style. He suggests that all the poetry be saved but decides against it because the niece fears that Don Quixote will then become a poet—a vocation even worse than knight-errant.
The priest soon discovers a book by Cervantes, who he claims is a friend of his. He says that Cervantes’s work has clever ideas but that it never fulfills its potential. He decides to keep the novel, expecting that the sequel Cervantes has promised will eventually be published.
Don Quixote wakes, still delusional, and interrupts the priest and the barber. Having walled up the entrance to the library, they decide to tell Don Quixote that an enchanter has carried off all his books and the library itself. That night, the housekeeper burns all the books. Two days later, when Don Quixote rises from bed and looks for his books, his niece tells him that an enchanter came on a cloud with a dragon, took the books due to a grudge he held against Don Quixote, and left the house full of smoke. Don Quixote believes her and explains that he recognizes this enchanter as his archrival, who knows that Don Quixote will defeat the enchanter’s favorite knight.
Don Quixote’s niece begs him to abandon his quest, but he refuses. He promises an illiterate laborer, Sancho Panza, that he will make him governor of an isle if Sancho leaves his wife, Teresa, and children to become Don Quixote’s squire. Sancho agrees, and after he acquires a donkey, they ride from the village, discussing the isle.
After a full day, Don Quixote and Sancho come to a field of windmills, which Don Quixote mistakes for giants. Don Quixote charges at one at full speed, and his lance gets caught in the windmill’s sail, throwing him and Rocinante to the ground. Don Quixote assures Sancho that the same enemy enchanter who has stolen his library turned the giants into windmills at the last minute.
In your analysis of the second part of Don Quixote, you write: "The story of Anna Felix and Don Gregorio tempers Cervantes’s otherwise rampant racism" - Really? This is a masterpiece that has survived the centuries because of it's jawdroppingly brilliant use of irony, but you can't seem to notice the difference between the first narrator (Cide Hamete's translator) and Cervantes himself!
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Any analysis of Don Quixote that doesn't mention the fact that that book is, at the core, a meditation on individual liberty, monetary debasement and the moral horror of involuntary slavery, is incomplete. See the work of Eric C. Graf of Universidad Francisco Marroquín. His article-
Juan de Mariana and the Modern American Politics of Money: Salamanca, Cervantes, Jefferson, and the Austrian School