History is a nightmare
Feeling that some "wisdom" is being expected of him (and not just sardonic replies), Stephen weighs an answer to the triumphalist version of history that he has been hearing from Deasy: benighted Jews eternally cursed by enlightened Christians, anarchic fenians held at bay by resolute Tories, spendthrift Catholics bested at the bank by thrifty Protestants. His counter-vision is a simple statement of despair: "History . . . is a nightmare from which I am trying to awake." The metaphor implies that human history is no place to look for enlightenment or justice.
Citing a note by J. Prescott, Thornton finds an analogue to Stephen's statement in a letter of the French poet Jules Laforgue (1860-87): "Life is too sad, too coarse. History is a gaudy old nightmare who does not suspect that the best jokes are the shortest." (I.e., get them over with as quickly as possible, because there is not very much to relish in the telling?) Robert Spoo quotes several early 20th century writers who used the same image in relation to World War I: D. H. Lawrence made it the title of a chapter on the war in Kangaroo (1923); Yeats wrote in Nineteen Hundred and Nineteen, "Now days are dragon-ridden, the nightmare / Rides upon sleep"; and, remarkably like Stephen's sentence, Henry James wrote in a letter to Edith Wharton in 1914 that "Life goes on after a fashion, but I find it a nightmare from which there is no waking save by sleep." (The letter was not published until 1920, so Joyce could not have been thinking of it as he wrote Nestor, any more than the other two. But all these uses of the same image suggest that it was widely current in the culture of the time.)
In addition to the war, one can identify many reasons Stephen might have for thinking of life as nightmarish, including British colonialism, the long and depressing saga of Irish resistance and acquiescence, and many other kinds of national, ethnic, and religious hatred, one of which he has just been thinking about in connection with the Jews. The word "history" is often attached to such struggles in Ulysses. Haines has said in Telemachus, and Stephen thinks again in Nestor, that "history is to blame" for England's brutal subjugation of the Irish. Stephen has thought at the beginning of Nestor that for Irish leaders "history was a tale like any other too often heard, their land a pawnshop." In Aeolus Myles Crawford refers to the story of the Phoenix Park murders as "the whole bloody history." In Cyclops Bloom inveighs against "Persecution" and says that "all the history of the world is full of it. Perpetuating national hatred among nations." " Force, hatred, history," he says, "all that. That's not life for men and women, insult and hatred." And in Eumaeus Stephen asks Bloom to remove a knife from his sight because "It reminds me of Roman history."
Nightmares also play an ongoing role in the book, from Haines' black panther to Dennis Breen's ace of spades to Bloom's fears about sleep. Circe can be described as (among other things) a long nightmare, during the course of which both Bloom and Stephen valiantly struggle to "awake."