"It may sound rather strange and needs to be pondered, lived with, and slept on for a long time. I regard bad conscience as the serious illness that man was bound to contract under the stress of the most fundamental change he ever experienced-that change which occurred when he found himself finally enclosed within the walls of society and peace".
Referring back to section 4 and his reference to a "bad conscience" as a "somber thing", Nietzsche uses punishment as a guide for "burning into memory" of failed debtors. Now he regards "bad conscience" as an inevitable occurrence, driven by the plight of man and the fundamental change of society and peace.
Nietzsche dismissing punishment as the origin of bad conscience is based on the ideals of a society transitioning from a simplistic, nomadic and barbaric way of life, to a more serene one, with beliefs of settlements and communities. Herein lies the problem Nietzsche discovers, the basic instincts of man, surrounded by the walls of a new society, rendering all the unconscious thoughts that served as a need for survival, useless. This new society would require men to think instead of using instincts; the structure of society would demand this reliance of our conscious mind.
Nietzsche determines that "all instinct that do not discharge themselves outwardly turn inward, this is what I call the internalization of man". He suggests that the suppression of these primitive instincts of hunting, cruelty, hostility and destruction leads man to turn on himself, developing this bad conscience and setting the stage for a what we would later call a "soul".
Nietzsche finds the development of bad conscious in its earliest forms of tribes and settlements, society would establish a hierarchy of