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During the third part of 1984, O'Brien states that he is in fact one of the authors of Goldstein's book (I think we can assume this to be true). I don't understand why the book was even created. At this point O'Brien is already well aware of Winston's anti-party sentiments, without needing to let him read a book that will add fuel to them.

Of course, it doesn't matter that the inner workings of the politic system are explained to Winston through the book - because he's going to be re-educated anyway, but I don't see why the book even needed to exist.

Interesting too that there's an exchange between Winston and O'Brien (I forget the exact wording) in which O'Brien says "I imagine you already knew most of what was in the book" and Winston agrees.

So, why does the book even exist?

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    I think the phrase is "give someone enough rope to hang themselves with". – Radhil May 4 '17 at 11:38
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    It's a trap. – Shokhet May 5 '17 at 18:38
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We know that what makes the Party such determined in ruling is their wisdom in controlling 'ideas'.

If you control 'any' idea including your opposition's, then who could ever overthrow you?

I am still not sure if this Goldstein is a 'real' person ever lived out there, though. But it is not important.

The Party have studied their lesson really well. Every dictatorship in history collapsed down because they had not controlled the opposition. As long as there is a ruling side, there will be an opposite side, whether there is a dictatorship or a democracy. This is what the history of the world teaches to the Party. Therefore, the Party needed to control the opposite side too.

If you have opposition, take the control of them by hard power. If there is no opposition you, create some. Either way, the purpose is leading ruling and opposing sides both.

This is the Party's strategy. And this is why they write a book and make it a 'legend' for the opposition. It is not important whether the book consists of 'truths' or 'lies'. The main purpose is to give false hope for anyone who searches for it, knowingly or unknowingly. By doing this; they show a light and lead the way for anyone who has any suspicion in their head, including 'already opposed' and 'have potential to be opposed' ones.

As long as the Party lead them, there is no risk for them to be overthrown.

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    Interestingly there's a great deal of parallels between this and what machines are doing with Zion in The Matrix universe. "The book" is another layer of control. – void_ptr May 4 '17 at 16:35
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    Isn't this explicitly stated in the novel somewhere? If so, the relevant quotes would be a good addition to the answer. – Kyle Strand May 4 '17 at 16:39
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    “Every dictatorship in history collapsed down because they had not controlled the opposition”. Uhm. Nazi Germany. Cambodia’s Khmer Rouge. I’m sure I’m forgetting some. – Konrad Rudolph May 4 '17 at 18:49
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    Suddenly the plots of Attack of the Clones and Revenge of the Sith make sense to me! – Darren May 4 '17 at 18:50
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    @can-ned_food because that's how SE works? ("if you see questions or answers that can be improved, you can edit them"; stackexchange.com/tour) – tardigrade May 5 '17 at 12:53
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O'Brien states that he is in fact one of the authors of Goldstein's book (I think we can assume this to be true).

I don't see why. He could be lying. It's not like he's shown himself to be such a trustworthy individual up to that point.

It's perfectly possible that someone called Goldstein actually wrote the book, and that O'Brien and the Party then uses it for their own purposes. There is no indication in the novel, one way or the other.

I'd say it's a more likely possibility that the book was written by an actual Goldstein, by application of Occam's razor. Though said razor seems to operate rather weakly in the world of 1984, which is after all, a fantasy world.

In-universe, the use of the book is to use the book to help trap problem individuals like Winston. Though this seems like an unnecessary tool, since the Party has plenty they can already use against him, and they don't really need any proof as such, anyway. Seeing as they are a totalitarian dictatorship and can just do whatever they want.

The out-of-universe reason, of course, is to explain a little to the reader, the nature of the world of 1984. And I think that is the real reason the book "exists" and is quoted from extensively within the story. It's essentially a expository device.

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The ultimate goal of the Party is to rule forever, through a strategy of perpetual war. In a perpetual war, there must always be an enemy to fight; rebels and crooks must always be in hiding planning terrorist attacks. Goldstein's book must always be there as a trap for rebels, spies, and other deviants guilty of crimethink.

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