As an example, we can imagine that in the past life one was a man and he was very attached to women. Attached so much that at the time of death he was thinking about them. According to the reincarnation law, in the next life he will be born in the body of a woman. And now imagine that in the woman’s body one remembers the past man’s life. Could it be possible with this memory be a sane woman? Therefore, the Lord arranged it so that a wise person who eyes are balmed with the Vedic knowledge can clearly see the reincarnation law, but an ignorant and attached to material existence person simply reaps the fruits of actions “enjoying” their good and bad consequences. The memory loss, thus, is necessary for us to peacefully enjoy these fruits. The presence of the memory would cast us in horror. Paralyzed by the memory, we would immediately strive back to God but at this point we would not have solved the paramount problem: the problem of envy. Then getting to the spiritual world and coming to ourselves, we would promptly repeat the same mistake and have to return to the material world again.
But God does not need our forced return and as long as we want to live without Him, He will create all conditions to fulfill this desire. That is why He helps us to forget our past lives for us to “peacefully” reap the fruits of our activities and “enjoy” all those things which we have deserved in our past lives. This path is as eternal as spiritual existence. The spiritual life is directed to eternal ascension and the material life to similarly eternal degradation. Once falling into this world, soul is so much entangled in causes and consequences of its activities, that there is no other hope of deliverance but the mercy of the Supreme Personality of Godhead and His confident devotees. The hope which is like a helping hand given to a drowning man in the sea.
Therefore, to sum it up:
1)There is the spiritual world which is the dwelling of spiritual parcels and God. There everyone is eternal, blissful and knowledgeable. Eternity is the consequence of the uniformity with the Lord’s nature, the bliss is the association with Him by means of devotional service and the knowledge is His mercy.
2) Spiritual beings have always got a free choice. Envying the absolute position of the Supreme Personality of Godhead or a more superior position of another jiva, some living beings express the desire to separate from Him in order to satisfy their desires, do justice instead of God. But because living beings are inherent parcels of God, such separation is not possible in fact. Being free from anger and envy, the Lord creates for such persons the material world where they get the opportunity to act according to their desires. In fact, the Aryans look at the material world as the evidence of the humble and generous nature of the Lord. The Lord creates this material world, places us here to fulfill our desires rejecting God and … “hides” from us in order not to stir our hatred.