When you pass away, your soul is reborn in another body. But the condition or state you are reborn in depends very much on your actions, your thoughts and your words in your previous life. This past life, called “karma,” determines your next life.
Believing in karma encourages good behaviour. This concept also explains the reason behind the injustices in life–those who have misbehaved are reborn in lowly conditions or reborn as animals. Those who are without luck or have misadventures were bad in their past life.
The only way to free yourself from karma is to detach yourself from worldly ways. When you have done this, then you have arrived at nirvana.
(I believe Karma is one of the most controversial concepts in the Buddhist philosophy. If my soul in the previous life is reborn in another body, why should I be made to suffer for misdeeds in a previous life that I have no recollection of and that I can no longer correct in the present life? If I can correct my karma with good behaviour, it will only be my next life that will reap the benefits of the present life. Meanwhile, I am made to endure the punishments of sins in a previous life. What a terrible injustice).
Then again, let’s think that a past life is not worth recollecting and it has been conveniently erased from memory. How then can you learn from past mistakes if you don’t know what those mistakes were? Or how can you avoid repeating past mistakes when it is precisely these mistakes that you learn from? So I could be living a never-ending cycle of repetitive mistakes.
A somewhat similar depiction of injustice can be found in the Christian belief where all humanity is made to suffer death as a result of Adam and Eve’s taking a fruit from a forbidden tree. What an injustice.