Melange, also known as spice, is created when the sandtrout—baby sand worms—excrete into the waters deep beneath the Arrakis sands. Think of it like yeast expelling gas into your bread to make it fluffy, only instead of bread, you get a mind-expanding drug worth its weight in gold. The spice is the most valuable trading resource in the universe and can only be produced on Arrakis (6.22).
The spice overworks itself in the symbolism department, as it can be a symbol for a wide variety of things. We'll try to convince you of two possibilities here, but feel free to come up with your own, as these two are far from the final word.
Far Out, Man
Dune was released in 1965, and according to our history books, this means it came out in the '60s. No, no, not the '60s as in the decade, but the Sixties as in, well, you know, the Sixties.
During this period, drug use exploded across America. Popular figures like Harvard psychologist Timothy Leary and writer Ken Kesey were promoting LSD use as a means of expanding one's consciousness and as a source of rebellion against the mainstream (source). The use of hallucinogenic drugs in American pop culture also led to a surge of interest in the ceremonial use of such drugs by tribal peoples, such as the Aztecs, who made ritual use of peyote (source).
Herbert taps into this aspect of the Sixties' drug addiction, mixes in a little of Jung's collective unconscious, and voilà: you have the spice.
The spice has all the properties of a drug. It is highly addictive and poisonous. Consuming it also leads to what's called the "spice tolerance" (44.190). This means that the effects lessen with each use, and more of the stuff is required to get the desired high or prescient vision (whichever you're aiming for).
As for the effect, the resulting high draws directly from Jung's idea of the collective unconscious. For Jung, the collective unconscious referred to the idea that humanity shares a uniting memory. This memory is created by our cultural symbols, images, and history.
When Paul takes the spice, his consciousness expands, he pushes "his mind into prescient awareness" (32.95), and he taps into Herbert's fictional equivalent of the collective unconscious. This includes the ability to read the future, present, and past. Jessica herself is changed by the spice. When she drinks it, she literally consumes the memories (there's the collective unconscious again) of the Fremen tribe, which transforms her into a Reverend Mother. The Fremen themselves experience what's called "tau" or the "oneness of the sietch community," an experience during which they "[feel] and [react] sometimes like a single organism" (41.14).
So, the symbol of the spice serves as a way for us to potentially explore drug culture and our cultural consciousness. Oh, but we're not done yet…
Oiling the Universal Machine
The spice can also symbolize petroleum. Yeah, we know. It sure seems odd moving from a mind-blowing hallucinogen to crude oil, but that's where the novel took us. Best to just roll with it.
The Dune saga exists on a universal scale, so traveling from point A to point B takes place in terms of light-years, not miles. Members of the Spacing Guild use the spice to expand their minds in order to chart and perform the complex mathematics required for such travel. If the spice were to run out, then the guild navigators would not be able to provide transit between the planets. In the Dune universe, this would be the equivalent of all cars, trucks, trains, and planes ceasing to function simultaneously. We'll give you a moment to picture that one.
This allows us to draw parallels between the spice and crude oil. Just like our oil, the spice is a resource that can only be produced in limited quantities and in certain areas. Also like our oil, the entire system depends on the spice. Without it, everything breaks down. The result is a political system centered on maintaining a secure flow of a limited resource, and an economic system more than willing to supply the demand for a price.
The spice trade in Dune shows the dangers of a system balanced precariously and totally on a singular and limited natural resource. Of course, it's only fiction. Nothing worth worrying about in the real world, right?