Avot, Chapter Three, Mishnah Fifteen
This is another statement by Rabbi Akiva. Note how in this extremely short mishnah, Rabbi Akiva succeeds in teaching some of the most basic theological principles of Judaism. It is testimony not only to the depth of Rabbi Akiva in particular and the Mishnah in general, but to their poetic abilities as well.
1) Everything is foreseen yet freedom of choice is granted,
2) And the world is judged with goodness;
3) And everything is in accordance with the preponderance of works.
Everything is foreseen yet freedom of choice is granted: this is one of the most deliciously paradoxical statement of the rabbis. It captures in just four (Hebrew) words, much of the spirit of Jewish thought. Since God is all-powerful, God must know everything, including the future. However, our actions were totally due to fate, we would not be morally responsible for our actions. In order to hold ourselves responsible for what we do, we must assume that we have free choice. Judaism is therefore a religion based on these two beliefs: God is the all-powerful, master of the universe and yet human beings have moral responsibility.
And the world is judged with goodness: this is a follow-up statement to the previous one. The freedom of choice granted to human beings is in some senses frightening. If human beings have choice then they are responsible for their choices, and at the end of the day, most of us dont stack up to what we should be. Therefore Rabbi Akiva assures us that God judges with goodness, meaning mercifully. He allows repentance to remedy our submissions to the evil inclination.
And everything is in accordance with the preponderance of works: a person is judged based on the majority of that persons actions. This may also relate to the previous statement. Although God judges mercifully, one should not think that ones performance of the commandments are not of consequence. God judges a person not based on any single deed, but on a character that has been built up throughout his lifetime. People who have built up a lifetime of good deeds will be justly rewarded.
Another interpretation of this last statement is that it does not have to do with Gods judgement. Rather it teaches that a persons character is developed throughout his lifetime by the performance of works. For example, one charitable gift does not make a person have a charitable nature. However, a person who gives frequently will be described and act as a generally charitable person. Note that in Judaism a person is mostly judged based on his actions; he is what he does. While belief is important, it is not the essential aspect of a persons character. Furthermore, character is shaped through action.