people in the walls was the tv's in the parlor
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The people in the walls are Bradbury's version of futuristic reality TV. Much like our own mainstream entertainment, the gigantic monitors lull Mildred into a vacuous world of violence and sex. Montag watches Mildred watch the screen. He longs to scream out that they are not in love and that their relationship is as fake as the tripe she is addicted to watching. Montag escapes to his books but at one point challenges Mildred if she has any clue about what is happening outside her walls and asks "Is it because we're having so much fun at home we've forgotten the world?". I love the sarcasm and irony in that line! In the final chapter Montag comes out of his enlightened closet. He turns off the walls and starts spouting off poetry to Mildred and her friends.