Nietzsche argues that to transcend nihilism and find a new meaning in life it is necessary to understand the old values and critique them. He begins by examining the origin of religion, arguing that it lies in the projection of certain feelings of exaltation, as well as those of fear and terror, onto a divinity. Earlier peoples had imagined that this “extreme feeling of power” (86) must have been inspired by a divine being pre-existing them. Humanity thus attributed to God everything in himself, in his feelings, that he found shocking, powerful, or surprising. Religion thus originates in psychic division and self-alienation.

The development of religion accelerated with the emergence of a priestly caste. This caste competes with the warrior caste for power in two related ways. First, they set themselves and their attributes as elevated and diminish the antithesis of these. In particular, they valorize their passivity relative to the activity of the warriors, establishing themselves as intermediaries between the people and their God. In turn, they can assume a higher role than the warriors in society. Finally, they use the “holy lie” of the afterlife and divine punishment to cement their power (92).