Lily, having decided to marry Rosedale, goes on a long walk with him. She tells him of her intentions, but he shocks her by saying that he no longer wishes to marry her because of the things he heard about her and George Dorset. Essentially, Lily and Rosedale have changed places socially. The previous year, when he proposed, she refused because she thought she could do better. Now, when she asks for marriage, he refuses because he thinks he can do better. He bluntly tells her that she would drag him down—but he still likes her as a friend. Although Rosedale doesn't believe the stories about Lily and George, he somehow knows that Lily has Bertha's old letters, and he encourages Lily to blackmail Bertha with them. Lily is shocked that he knows about the letters (which he found out about as owner of the Benedick, Selden's apartment building). However, Lily still will not resort to blackmail because she knows the letters will harm Selden as well as Bertha.
Lily realizes that she cannot work her way back into society because of Bertha's enormous bank account. Bertha is intent on keeping Lily down, and she has all sorts of financial and social resources to do so. Lily has become even more of a slave to her destitution. She is worried about poverty, and she does not feel capable of giving up her nice clothes and gambling. She knows that she will soon not even be able to afford her house. Luckily, Lily does have some support: Carry Fisher, Gerty Farish and Selden are all intent on helping Lily as much as possible. However, when Selden goes looking for her at the end of Chapter Eight, he finds that she has left her hotel to stay with a divorcee, Mrs. Norma Hatch, at the Emporium Hotel, where Lily has begun work as Mrs. Hatch's secretary.
Lily does not have much to do as Mrs. Hatch's secretary because Mrs. Hatch does not write many letters. Lily's new boss lives a strange life that involves very little concern about time. She also has her own social circle, which contains some members of the Trenor circle, including Fred Van Osburgh, the young heir to the enormous Van Osburgh estate who flirts with Mrs. Hatch as though he intends to marry her. It soon becomes apparent that some members of the society want Lily to play a hand in making a match between the two, but Lily does not want to get involved, which in part convinces her to leave later on.
At the Emporium, Selden pays Lily a visit. She sees that he has become humorless and reckless; he does not know how to deal with his feelings for Lily. He tells her that he will help her by being her friend when she needs someone to support her. Selden encourages her to leave the Emporium and return to Gerty's apartment, but Lily refuses, saying that she likes Mrs. Hatch and needs the money she makes as Mrs. Hatch's secretary. But then Lily does decide to leave (although she doesn't tell Selden at first).
Chapter Eight presents a picture of how Lily tries to survive in the face of suffering. She acts stubbornly, insisting that she eventually pay off all her debts even though they have been requited. Nevertheless, we see that Lily's sacrifices are beginning to take a heavy toll on her. She feels her financial losses deeply, but more importantly, she is starting to feel friendless. Gerty recognizes that what Lily really needs is someone to help her by comforting her in times of need, and Gerty silently pledges herself to taking care of Lily in any way possible. Gerty, we begin to see, has by nature a helper personality; she is the one who leads Lily to do charity work earlier in the novel. We also learn, however, that Lily's role as an actor in society is essentially over. She is no longer a classy woman in control of herself, but rather a lonely soul incessantly worried by money. Appearances are now only secondary to surviving.
This section raises a question about fatalism, or predetermination, and the novel. Lily, in Chapter Eight, sighs, "Oh Gerty, I wasn't meant to be good!" This statement makes us question whether or not Lily's fall from society is really fated; is Wharton trying to show that Lily is destined to fail? (Keep in mind that Wharton is writing at the same time when fatalism was a popular literary philosophy, as seen best in the novels of Thomas Hardy.) It seems that because of Lily's perpetual inability to make a decision about whom to marry, she may be fated to never marry. Her cowardice and general assumption that she can always "do better" leads her to pass up many great opportunities. Lily's personality is so tied to the individual choice behind marriage that she her failure to consent to marriage may lead to her downfall. On the other hand, though, one could also argue that Lily is merely the victim of some bad luck related to Bertha Dorset's dislike of her. In reality, Lily cannot help her rejection from society because it is based on a lie. Had it not been for this piece of bad luck, Lily would perhaps have gotten on with her life, eventually paid off Gus Trenor, and found a way back into society. We as readers can choose to sympathize with Lily and agree that she "wasn't meant to be good," or we can blame her fall simply on bad luck that could have gone either way.
Fatalism aside, Wharton finds ways in this section to make it clear that Lily is beginning to get older. One way Wharton does this is to cast Lily as a type of maternal figure. We see that Lily worries about Fred Van Osburgh, feeling some natural instinct to help him out when he finds himself in difficult social situations. At the very end of the novel, there is a scene in which Lily holds the newborn baby of a woman she used to help out in her charity projects with Gerty, which again casts Lily as a mother figure. These scenes show first that Lily is getting old; she is at the point in her life when she ought to be having children, but she has not yet even married. This gives Lily as a character a sense of urgency, which is complemented by Carry's insistence that Lily get married as soon as possible. It also shows us, though, that Lily could have been a good mother. She has a caretaker instinct that would allow her to raise children well, which only makes her eventual death even more troubling.