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Emily is a lovely, graceful child, and David falls in love with her as soon as he sees her (when David is eight). Emily is the daughter of Peggotty's brother-in-law, Tom (so the Peggottys must have had another sister by blood, but we never find out her name).
Like Ham Peggotty, little Emily's father drowned when she was a child, leaving her in the care of the kindly Mr. Peggotty. However, from Emily's introduction in the novel, there is some hint that she is going to come to a bad end: David sees the young Emily running towards the sea, "springing forward to her destruction (as it appeared to [David])" (3.73). You don't get much clearer foreshadowing than that. Emily's not going to come out of this book well.
And indeed, there's another strand of ominous foreshadowing that hints at Emily's problem (for David, at least). Unlike nobly impoverished working class characters like Peggotty or Ham, Emily is not happy with her place on the social ladder. She comes from a solidly working-class background, but she is pretty and stylish above her place.
Emily becomes an apprentice dressmaker at Mr. Omer's shop, and her skill with a needle draws both jealousy and speculation about her ambitions from the townspeople. Before Emily's desertion of Ham, Minnie Omer hints at future troubles in store for Emily: "Then she should have kept to her own station in life [...] and not have given them any hold to talk about her" (21.59).
Even before she becomes a permanent social outcast as a result of her seduction by Steerforth, Emily is willingly separating herself out from the society into which she was born. And as much as Dickens is willing to engage in criticism of that society (he's got some pretty cutting things to say about England's school and prison systems, after all), he still acknowledges that an individual can't live happily totally outside of her community.
All in all, Emily seems out of place in Yarmouth. When she finally becomes engaged to Ham, even though she seems affectionate with him, she is never comfortable touching him. Even on the night their engagement is announced, David notices that Emily "kept quite close to the wall, and away from [Ham]" (21.143). Emily's discomfort with her class position and with the man who loves her leaves her vulnerable to Steerforth's seduction.
See, David Copperfield is, in many ways, a novel of social climbing. But only up to a point. David and Traddles are both poor gentlemen, so they have the freedom to improve their own lots in life with hard work – their birth isn't a problem, they just have to make some cash through some kind of profession. But Emily's father is a fisherman and she is a woman, so she doesn't have as much social mobility.
Emily recognizes the social realities of English life at the time even as a child, commenting to David: "your father was a gentleman, and your mother is a lady; and my father was a fisherman, and my mother was a fisherman's daughter" (3.58). But even though Emily knows that she is relatively low on the social totem pole, she still wishes desperately to be a lady. Her desire to improve her social class is what leaves her vulnerable to the seduction of glamorous, immoral Steerforth. Indeed, in her farewell letter to her uncle, she promises never to return to Yarmouth "unless [Steerforth] brings me back a lady" (31.53).
Emily doesn't wish to be a lady out of vanity or desire for money on her own behalf. The early death of her father has left her terrified of the uncertainty of a fisherman's life. If her family could all be "gentlefolks," they "wouldn't mind then when there come stormy weather" (3.68). She wishes her family could be safe – and considering that Ham Peggotty does actually drown, just as her father did, Emily's fear is totally understandable. By giving this sympathetic explanation for Emily's desire for a better life, Dickens may be making a plea to the audiences of his day (who might otherwise be totally unsympathetic to a poor girl who runs away from a good man to go off with a scoundrel like Steerforth). (For more on problems of social status in this book, check out the theme of "Society and Class.")
We also know that Emily is really, truly sorry for ditching Ham and her family and running off with Steerforth. Before Emily leaves Yarmouth, she already feels guilty about what she is going to do. When she sees Martha Endell (another fallen woman from the village), she weeps and clings to her uncle, as though she is already aware of her own social ruin. And once she comes back to London in disgrace, she refuses to contact the other Peggottys because she doesn't know what to say to them out of humiliation.
Little Emily does wrong (in the eyes of nineteenth century British society; we here at Shmoop do not judge this kind of thing!), but she makes herself pay for it. Once she escapes from Steerforth's household, she becomes so ill that she almost dies. And once she gets back to England and Mr. Peggotty, she spends the rest of the novel dedicating herself to virtue and good works. Once Mr. Peggotty and Emily move to Australia to start a new life, Emily nurses sick people and teaches children. She decides that she will never marry; having been ruined by Steerforth. About her love life, Emily comments tragically: "that's gone for ever" (63.30).
Even though it may seem unfair that Emily is so brutally punished for what seems like a relatively insignificant crime by today's standards, Dickens is really giving a fairly sympathetic portrait for his time of a socially outcast woman. It is clear that Emily makes her mistake not out of pride, but out of too much affection. And the characters who take advantage or reprove her for it, notably Littimer and Miss Rosa Dartle, come off much worse than little Emily ever does. Dickens seems much more willing to forgive characters for human folly than for inhuman coldness and cruelty.