E.D. Hirsch answers this question quite definitively. "The god smiles, the man cowers. (Of course, God smiled, and the answer to both question is, 'Yes!' The entire stanza is formed from traditional biblical and Miltonic imagery, and within that tradition, 'God saw everything that he had made and behold it was very good.') But while the man cowers, he has a growing sense of the reason for God's smile. It could be a satanic and sadistic smile, but it could also be the smile of the artist who has forged the richest and most vital of possible worlds, a world that contains both the tiger and the lamb" (250).