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Oedipa rereads Pierce's will, noticing a mention of Yoyodyne, the company whose manufacturing plant she passed on the way into San Narciso. She goes to a stockholders meeting one morning, where she meets Clayton Chiclitz, the company's president, who is leading a company sing-along. He invites Oedipa on a tour of the plant, which she accepts. While straying away from the main tour, she comes upon the office of Stanley Koteks, who is sitting at his desk drawing the Tristero symbol (the muted post horn). She tells him that she is a stockholder, to which he responds by asking her to change the nation's patent laws, which he thinks are overly restrictive. He then tells her about John Nefastis, a Berkeley scientist who has invented a perpetual motion device called a Nefastis Machine. This machine theoretically violates the Second Law of Thermodynamics, which forbids the existence of perpetual motion. However, Koteks says that only people designated as "sensitives" are able to operate the machine, which relies on a certain amount of mental ability to function (the machine is based on Maxwell's Demon, a hypothetical perpetual motion device dreamed up by the Scottish scientist Clerk Maxwell). Oedipa suspects that she may be a sensitive, and she decides to go to Berkeley to be tested. She notices "Box 573" written on Koteks' writing pad, and decides that this is the new address of W.A.S.T.E., which she saw written in the bathroom of The Scope. Days later, Oedipa returns to The Scope and talks to Mike Fallopian, who tells her that Koteks may be part of a vast conspiracy.
Wanting to find out more about Wharfinger and the Tristero, Oedipa gets a copy of Jacobean Revenge Plays, a paperback book with a skull on the cover. The copy is partially annotated with references to a Berkeley publisher. Oedipa decides to go to Berkeley to find out more. On the way, she stops at Vesperhaven, an old-persons home built by Pierce. There, she randomly meets an old man named Mr. Thoth, who tells her of the strange dreams he has about his grandfather, who was an "Indian killer" in the 19th century. Mr. Thoth's grandfather once cut a ring off an Indian he killed, a ring that Mr. Thoth still has, and he shows Oedipa. Engraved in the ring is the muted post horn symbol.
Confused by her encounters, Oedipa goes back to Fallopian to try to piece things together. They cannot draw any connections, although Fallopian sees a connection between Indian killers and the Wells, Fargo, and Pony Express mail delivery systems he is currently researching. Feeling unsatisfied, Oedipa goes to Genghis Cohen, a philatelist (a stamp expert) who has been hired to oversee Pierce's stamp collection. Genghis tells Oedipa that he has contracted an Expert Committee to examine some of Pierce's more problematic, confusing stamps. These "problem stamps," he shows Oedipa, all have a muted post horn as a watermark. Genghis also shows Oedipa that German stamps from the time of the Thurn and Taxis era have the same marking, which is a symbol in the Thurn and Taxis coat of arms (without the mute, of course). Oedipa recalls the line from The Courier's Tragedy, "And tacit lies the gold once-knotted horn," which she believes related to the efforts of the Tristero to silence Thurn and Taxis. She realizes that the trapezoid is definitely a mute; she thinks that someone is trying to mute the postal horn.
The chapter ends as Oedipa realizes that she is uncovering a very large conspiracy that dates back centuries to a very old group. She decides not to tell the government about what she has found out.
One should notice early on in the chapter the frequency with which Pynchon incorporates songs and other verse forms into the novel. He frequently quotes from The Courier's Tragedy, the Paranoids song lyrics, and the songs sung at the stockholder's meeting. The songs in the novel symbolize several things, one of which is a contrast between conformity and rebellion. The tunes sung at the stockholders meeting, for example, are used to bind people together toward one common goal. They are sung to a familiar tune, that of the Cornell (Pynchon's alma mater) school song, in order to appeal to many people and give the company managers a sense of community and belonging. The songs of the Paranoids, however, are typical 1960s rock songs of rebellion and youthful angst. They usually deal with very personal expression, as seen in the song "Serenade" in chapter two, which is more emotionally genuine and meaningful. The company songs appear to be a type of satire of corporate life; they are an absurd tool used by upper management to promote an artificial sense of belonging and team spirit. The Paranoids' songs, however, are a means of pointing out the pathetic, formulaic tradition of the rock and roll genre. Pynchon is depicting a world in which expression and communication take many forms, not all of which are wholly genuine. Of course, this is not meant to suggest that Pynchon thinks that music and songs are useless, but the novel does seem to show an interest in multiple forms of expression and their shortcomings, an interest that blends with the larger communication themes of the book.
The chapter introduces us to the very important concepts of entropy and the possibility of meaning, which occur in most of Pynchon's work. Entropy, in a scientific sense, is the tendency of things to disorder themselves over time into chaos. Maxwell's Demon, the basis for the Nefastis Machine, works against entropy by separating and sorting molecules of different heat. The Demon, thus, brings about order in such a fashion as to empower all sorts of scientific change; but, in a proper Catch-22 fashion, the machine cannot exist because it does not have the energy by itself to sort the molecules. Nefastis has found a way around the problem of energy, and, in doing so, he has created a scientific machine capable of changing the world, but the application of his Nefastis Machine is dependent on the deepest sort of pseudoscience, some oddly defined "sensitivity." The Nefastis Machine is a model for the themes of order and disorder through the novel. Like the machine, interpretation is an effort to impose order on disorder, but also like the machine, that interpretation is itself founded upon disorder. The entire ordering structure is called into question; Oedipa turns out not to be a "sensitive," and she is never able to solve the story of the Tristero. Similarly, even Oedipa's failure as a "sensitive" is uncertain; not in the sense that Oedipa is a sensitive, but that it is certainly possible that Nefastis is a quack, his machine a fake, and Oedipa's "failure" rather a failure of the machine. Uncertainty abounds.
Mr. Thoth's brief story about his grandfather and the Indians reflects the larger problems of determining truth. The dream mentioned by Mr. Thoth deals with real Indians and imaginary Indians. The problem of distinguishing between the two is closely related to Oedipa's struggle to determine what clues are real and which are false in her search for the meaning of the Tristero. Like Mr. Thoth's grandfather, Oedipa is faced with all sorts of information and all sorts of imaginings, but she cannot easily determine what is real and what is the product of an overactive imagination. This will become more evident later on when Oedipa stays up all night long, wandering the streets and seeing signs of the Tristero everywhere, only to wonder the next morning if it was all a big hallucination.
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