This is long, and probably not entirely coherent. Still.
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When I first watched the episode, I really got intrigued by the scene at the beach when the MiB (Man in Black, fake Locke) tells what I believe to be his biggest lie: he tells Jack that he could kill them all. At that moment I wished Jack would have dared him, and even said so out loud to my wife.
Now, after thinking a bit about it, and about the apparent fact that the MiB is bound by strict rules about killing, and can otherwise achieve the same effect only through scheming and loopholes (notably Ben, to kill Jacob, and Sawyer, to kill them all at the submarine), I got to thinking that the answer to how Jacob got to be Jacob is really simple. He did what Jack didn’t: he stepped forward and stood up to the MiB.
Jacob was simply a person willing to sacrifice his life for the greater good, living it in a state of stalemate against the MiB. And, of course, had the intention of holding that job for eternity.
I believe the MiB is a device—an artificial intelligence, yes—designed by a higher intelligence, put here on earth to dispose of mankind should we, as a species, get to a point of, I don’t know, wickedness, that could be deemed as harmful to said intelligence (and sadly I do believe aliens could be the chosen explanation here, although an ancient and very advanced civilization could also be the explanation). Once we (our contemporary civilization) got the technology that would enable us some time in the future to spread our wickedness (and destruction, and insatiable hunger for resources, and constant indifference to anything not concerning our well being, etc), the MiB—in fact a defense mechanism, as it once was described, but defending the universe against us—would come into action, destroying the menace, destroying mankind.
The way designed by the higher intelligence to prevent the destruction of mankind was simple: we, as a species, have to constantly demonstrate that there’s hope for us, hope in a moral sense. One of us has to willingly choose to sacrifice everything for the wellbeing of the entire planet. “I will sit here and do nothing but oppose this force, forever” would be the sort of choice made by this person. This is not a lightly choice, because this person will be endowed by the higher intelligence (the island? The island’s builders?) with everlasting life (the magic box in action, if you will). Choosing to stay forever in a stalemate with a deadly enemy is no simple choice, I believe.
Such an arrangement would be palliative, though. A buffer solution, temporarily in place until a definitive answer is given to the question of whether we, as a species, are worthy of permanence in the universe. The final answer would come in two possible forms: (a) we demonstrate that in fact we’re not able to evolve, and in such case the MiB will act as he was designed to act (as a security mechanism, protecting the universe by annihilating mankind); (b) we demonstrate that we have evolved beyond the “probation” state, and thus the security mechanism will be lifted forever. This second possibility is the “end” to which Jacob referred in the season 5 finale; the end that just happens once. The stalemate is, also in Jacob’s optimistic view, a slow progress towards the final (positive) outcome.
And thus the game progresses. Throughout History, Jacob (or the “Jacob” in charge at the time) tries to find the one person who can demonstrate once and for all that our wickedness is not inherent, but rather a dying (albeit slowly) trait—a vestigial personality characteristic, equivalent to the human appendix and coccyx. He gathers people on the island, people willing to live by his rules unbeknownst to what they actually have to do in order to end the game. Telling them would be interfering directly with their free will, so they have to figure it out on their own.
Meanwhile the MiB is doing what he was designed to do: he finds and destroys those that have proven to be somehow beyond, I don’t know, salvation? (Eko, for instance, chose not to repent; the people slaughtered at the temple gave in to fear and doubt, Bram and his team attacked the MiB without understanding the implications of what they were doing. They all somehow fit the MiB’s bill for a righteous kill). He is also fast at trying to end the game, an end he can only achieve by destroying the incumbent Jacob and making sure the line of succession is broken for good (no incumbent Jacob and no candidates to replace him/her) .
What will happen next could be this: Jack will eventually realize that the only action he needs to take to stop the MiB is to stand up to him and express his wish to assume the role of incumbent Jacob. The island does the rest, accepting his offer and the stalemate is installed once again. I believe that such scenario will almost happen, with a few more deaths still to take place (and at this point, neither Hurley, Kate, Claire nor Sawyer are above this possibility) and through some single-minded cunning on the MiB’s part.
If the time loop theory is true, what could follow is that in the very last minute, the MiB gets the upper hand, and before he can go through and finish the match, somehow Desmond comes into play and resets the time and space continuum, initiating yet another iteration of the loop. Once again the story plays out almost exactly as it has played these past (hundred? Thousand?) times, with yet another subtle difference in the picture frames as Miles goes up to ghostbust the grandson’s spirit at the grandma’s bidding, and some time in this time line everything will happen again, almost exactly as it happened, but not differently enough to make a difference.
Except that this time, I think it will be different. In the last minute, instead of the MiB getting the upper hand and time having to be reset, I believe something slightly different will happen, and proof of mankind’s evolution (or rather, potential for evolution) will be produced. I believe Jack will be the one to provide this, and I wouldn’t be surprised if this change was spurted speciffically by his interaction with Jacob by the vending machine). Once this is achieved, mankind’s permanence is guaranteed, and this time around, the reset is for good. In this reset (as I have said before), the island never received the (alien? ancient and very advanced civilization, now long extinct?) intelligence, the MiB never existed, and there never was an incumbent Jacob. The new reality is formed, and we are shown it up to 2004, when the non-existing events from the now dead crashiverse reality start to sip in the Losties’ memories. I believe that they will all gain full knowledge of what went on in the now extinct reality, and will lead much more meaningful lives from then on. We have already been seeing some of the outcome of that, and I believe it will just continue: Desmond and Penny will hook up; Hurley and Libby will hook up; Sawyer will eventually meet Juliet (Jack’s ex-wife) and they will hook up; Claire will become part of the Shephard family; Locke will finally let go and agree to the surgery (and will regain use of his legs); Sayid will be cleared of the charges once they establish (with the help of Sawyer) that he killed the bad guys in self defense; Kate will be acquitted as acting to protect her mother from an abusive stepfather; etc. Maybe not all that will happen, but with full knowledge of their parallel lives, I bet they will help each other in those general directions. Their experiences in the island won’t be lost, and they will be better off than they were while oblivious of their lateral reality lives.
Summing up: nobody will leave the island in 2007, and that reality will simply cease to exist. It will happen because mankind will have earned its right to survive without a huge axe hanging over its neck (namely, the MiB). The memories from that reality will flow into the minds of the Losties in the new 2004 reality, and they will have full knowledge of what they experienced.
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I know the above scenario will not satisfy everyone, but then again, no outcome will. And it’s probably very, very wrong. But I never ventured a theory before—not one as long and comprehensive, anyway—and if I didn’t now, I would never have another chance.