What does Hamlet mean when he ascribes his own inaction to conscience?

The variety of possible meanings of ‘conscience’ in the Elizabethan period has enabled its occurrence in Hamlet's most familiar soliloquy to be widely interpreted – or, as I hope to suggest, misinterpreted – to mean ‘consciousness’ (OED, I) rather than ‘knowledge of right and wrong’ (OED, II). For instance, many editions of the play gloss ‘conscience’ here as ‘consciousness’, ‘self- consciousness’ or ‘reflection’. Nothing in the lines themselves, however, implies this reading of the word. The apparent meaning of the text is fairly straightforward: the moral sense inhibits action by generating fear (of the consequences). ‘Conscience’ occurs several times in the rest of Hamlet where it seems to need no gloss, and it refers consistently to the faculty that distinguishes between good and evil. Six lines before the beginning of this soliloquy Claudius has given the audience the first indication of his guilt, when he says, ‘How smart a lash that speech doth give my conscience!’ (3.1.50). The word is common in the rest of Shakespeare and it tends generally to occur in the sense familiar from much Renaissance and later moral writing to mean the element in human beings that is ‘appointed of God to declare and put in execution his just judgement against sinners’, a moral arbiter, whose function is ‘to judge of the goodnes or badnes of thinges or actions’.