Hegel here decides that things can go no further without some serious attention to the nature of Spirit itself, from its abstract characteristics to its fully formed instantiation in the concrete world (he notes that by "world" he means both mental and physical nature, but says that physical nature merely "impinges" on history, while Spirit is the actual "substance" of history). This direct consideration of Spirit will be broken down into three sections (sections 3; 4 and 5; and 6 of this SparkNote, respectively):
I. The abstract characteristics of Spirit.
II. The "means Spirit uses in order to realize its Idea."
III. The shape Spirit takes when fully realized in the world: namely, the State.

Hegel's analysis of Spirit's abstract characteristics begins with a focus on freedom as the very essence of Spirit. If the essence of matter is its dependence on the external force of gravity, the essence of Spirit is its dependence only on its internal principle of freedom: Spirit "has its center in itself." All the other characteristics of Spirit "subsist only by means of freedom," and freedom is both the means and the end of Spirit (in the abstract). In short, "freedom is the only truth of Spirit."

Spirit is also the opposite of matter in terms of unity--matter is always in parts, but Spirit is entirely unified (since it depends on nothing outside of itself). This being-in-itself, this non-dependence, is intimately related to freedom. Since Spirit is entirely self-sufficient by nature, freedom is inherent in it as its central principle. Further, this self-sufficient nature is also a self-consciousness, "the consciousness of self." Hegel defines this briefly as the coincidence of two kinds of consciousness: "that I know" and "what I know." Spirit knows that it knows, thereby uniting itself as a subject with itself as an object. So Spirit is free, self-sufficient, and self-conscious, and all of these characteristics are interdependent nearly to the point of being the same thing.

Hegel takes these characteristics as an "abstract definition" of Spirit. With that in mind, he says again that world history is "the exhibition of Spirit, the working out of what it is potentially." Spirit is like a seed, which takes root in the world and reveals its internal nature externally in history.

The essential freedom of Spirit plays out in history as peoples become increasingly aware of themselves as free. In the ancient Orient, Hegel claims, societies were united under one essentially arbitrary ruler. Since they did not know that they were free, they were not free. The ancient Greeks exhibited the first social consciousness of freedom, but they failed to see freedom as an essentially human characteristic--only some people were free, again by chance through birth. The Germans, Hegel claims, were the first to recognize that the "freedom of spirit comprises our most human nature." This was possible through the tenets of Christianity, which ostensibly recognized all humans as fundamentally free (Hegel notes that religion is often the initial vehicle for this consciousness of freedom).

It took awhile, of course, to make this realization a reality. In fact, Hegel notes, this "application of the principle of freedom to worldly reality...is the long process that makes up history itself." Here Hegel emphasizes the importance of the distinction between the abstract concept of Spirit and its realization in the concrete world--both must be considered, since it is the transition from one to the other that makes up history.

The final goal of this progress from Oriental despotism to Greek democracy and on to universal rights, the "final goal of the world," is the maximization of "Spirit's consciousness of its freedom, and hence also the actualization of that very freedom." Hegel immediately qualifies this statement, however, by saying that, since it is the "highest possible concept," it is a minefield of potential error. He'll simply have to clarify these errors as the lectures proceed.

Hegel closes the discussion of Spirit's abstract principles with a reminder to pay attention to the difference between abstract principle and concrete reality. Nevertheless, he says, that concrete reality is implicit in the concept itself: "freedom...contains the infinite necessity of bringing itself to consciousness...and thereby to reality." The next thing to consider is the means by which this transition happens.

This passage is true to its aim in providing some helpful clarifications of what Hegel means by Spirit. Before we review these, however, we should remind ourselves that Spirit is not something we should try to picture on its own. As an abstract concept, it does not exist in any "place" except in the wide world, in which it comes to concrete reality. Hegel aligns Spirit with God to some extent, but only by virtue of certain abstract similarities--Spirit is not an entity.

The biggest development here is the introduction, in earnest, of the concept of freedom as the essential principle of Spirit. Just as Hegel used much of the last section to give an account of Reason as a kind of internal partner-concept to Spirit, here freedom is introduced as a concept that is both distinct from and unified with Spirit. This kind of ambiguous relationship between large- scale concepts is typical of Hegel, and he often fosters that ambiguity to illustrate the extremely close relationship between these ideas.

Thus, freedom is said to be nothing but total self-sufficiency, and self-consciousness is absolutely necessary to the kind of freedom Hegel is getting at. All three characteristics come together in the unified Spirit, which is also Reason itself. For Hegel, rationality is inseparable from true freedom, since it is only through Reason that true freedom is possible. We might think of Spirit as a kind of catchall term for the conjunction of these concepts as they pass together from their abstract unity to their realization as operative principles in human history.

The seed metaphor is also a rare clarification on Hegel's part, and it illustrates nicely the sense in which Spirit can be whole and self-sufficient as an abstract concept, yet still have the realization of itself in the world as its internal and essential goal. For this, it needs human consciousness; humankind's increasing awareness of its freedom is Spirit's increasing awareness of its essential principle. Thus, human history is Spirit's means for self-realization. This, in fact, is the subject of the next section, and Hegel sets us up for it here by emphasizing (twice) the distinction between the abstract and the concrete with regard to Spirit. It is the transition from the first form of Spirit to the second, he says, that makes up history in the first place.