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Contemporary Western audiences tend to regard realism and operatic stylization as mutually exclusive. Ironically one of the most important breakthroughs in late-19th- and early-20th-century European art was the Italian verismo movement (Puccini's Tosca, first performed in 1900, may be the best-known example today), which introduced lower-class and otherwise desperate characters to the medium of opera. The emotional content was intense, the stories often violent or luridly sexual. The men who composed these operas were inspired, in turn, by such groundbreaking novelists as Balzac, Zola, Dostoevsky, and Tolstoy—none of whom were averse to melodramatic coincidences or page-turning suspense. In all of these cases, realism refers to the use of specific detail to depict subjects that had been considered too common or vulgar for art. The figures associated with literary and theatrical realism weren't rejecting the pleasures of narrative art—rather, they were expanding the scope of their mediums to consider certain social issues in greater depth than bourgeois and upper-class audiences were used to.
In classic realism, the ends justified the means. If one had to employ a good, juicy murder—or any other implausible turn of the screw—to keep an audience absorbed in lower-class lives, then so be it. They still came out of the experience with heightened awareness of some unfortunate social reality. (By a similar token, Charles Dickens may have been more successful than any other human being in publicizing the horrors of British poverty, and his novels teem with implausible developments.) This is the realist tradition that Starred Up invokes. No, the film's climax would not likely happen in the real world. What matters is that it makes sense emotionally—that the film has successfully communicated the characters' extreme desperation (which, as I noted in my long review, the prisoners have so internalized that it even how they regard their bodies) so we believe them capable of anything.