For Kierkegaard, we exist in paradox:
The tension between the finite and infinite is the most basic one. It means that we are free to create ourselves, within certain limits of reality. The tension between these two creates our anxiety.
What all this means is that anxiety is a basic fact of our human existence. It is how we know we are being truly human. We ought not to try to "cure" anxiety, then, but we ought to learn to live with it. Nevertheless, many people try to alleviate their own anxiety. This leads to what Kierkegaard calls "despair".
It starts as innocence and amorality. Pleasure is the centre of life. It is at this level that the person tries to capture the perfect moment, believing that it embodies pleasure.
The focus is on sensation. In fact, that is the original meaning of aesthetic. It focusses on the good life, and on producing the good moment.
However, as one reflects in the aesthetic stage, boredom increases. In the end, this stage cannot be satisfying, since pleasure cannot be guarenteed. Often it is balanced by boredom and even pain. This level amounts to slavery to the passions. The end of the aesthete is despair, over the future, over himself. This leads either to the demonic, or to the next stage, the ethical.
We can decide not to opt for despair, as our anxiety increases. This will require an irrational act on our parts, a "leap of faith".
Boundary zone 1: Irony
When we get to the edge of this condition, we realize that the tension is an ironic one. We realize that we only have the moment when we don't have it. We strive, and never reach. What we say about being "truly alive" comes, ironically, when we are least alive. Irony occurs when we have enough distance on ourselves to realize that there is a contradiction.
This lifts us from the state of nature, to a plane where rationality, stability, and choice are. Purposeful living is possible. Persons can reach their telos. By accepting the moral law, persons in effect set themselves free to discover their own selfhood. The more one's consciousness is raised by anxiety, despair, and guilt, the more one is forced to decide.
It is important to realize that this free choice of this level is not the abolishment of the level before, but its grounding. In other words, we discover that there is something outside of simply satisfying our individual desires, that makes that satisfaction possible at all. When we come to realize that, we have irony. When we come to existentially appropriate it, we have moved to the ethical level.
By ethics, Kierkegaard means much more than just the rules by which we live. He means all the things that we use to organize our lives. Society, law, culture, language, convention, and most religion. In a sense, we put ourselves outside of ourselves, in order to find ourselves. We give up the choice of just satisfying individual desire, and find that what comes back is a greater possibility for that satisfaction to take place.
Problem: We find that contradictions arise here too. Every time we try to totalize our existence using one of these techniques of the ethical level, we find that something slips out. No set of laws, no set of religious doctrines, no language covers all possibilities. Not only does it not cover all possibilities, sometimes we have demands made of us that actually call us to negate the structure that formerly gave us such comfort.
One way to look at the progression through these levels is that what starts off as a kind of passion runs out. At the aesthetic level, there is a directedness, which becomes diffuse. The same thing happens at the ethical level. It becomes a passionless age, a point that Kierkegaard emphasizes regularly in books like The Present Age.
Boundary Zone 2: The Humorous
The humorous is only possible when we can transcend the struggle of the ethical level, and both see ourselves as embodying that struggle, while at the same time being at a distance from the struggle. Kierkegaard gives some comical situations:
There comes a time when the person hears a call that goes against the universal command of the ethical stage. Fear and Trembling: Abraham hears the call of God to sacrifice Isaac. What is required of Abraham is a leap in the dark. This goes against all ethical requirements. This is fear and trembling because the individual will never know whether he is mad or has been deceived.
The religious level is the call, the basis for passion. It is the grounding of all that the ethical level represents, even as the aesthetic level needs the grounding of the ethical level. It is beyond language, beyond the rational.