Karma - or the belief that the universe is organized according to cause and effect - is the kind of subject that invites us to make fools of ourselves. Either we can treat the notion as something unworthy of serious consideration - in other words, as a joke - and in the process belittle a belief system that offers perhaps the best explanation for life's difficulties and disparities; or you can pretend to be some kind of great teacher or guru who understands the underlying workings of the universe, and in the process invite a bolt of lightening to hit you in the head.
I'm going to try to avoid making both of these mistakes (I'll make others) by saying now that there are two aspects of karma that cannot be explained - not only can't they be explained, but if we think about them in the wrong way we can actually harm ourselves. On the other hand, there are two aspects of karma that can be very practical and helpful to us as we attempt to create happiness in our lives. It's useful, therefore, to know the difference among these four aspects of karma, which I will address one at a time.
Two impractical aspects of karma
The first aspect of karma that cannot be explained is past lives. Most people who believe in karma also believe that we live multiple life times. The basic belief is that life on earth is essentially a giant school in which we are all learning lessons and making progress at our own specific pace. Our reason for being in this school is to evolve toward a condition of perfection that, once achieved, allows us to return to the original state of oneness, or divinity, from which we came. Part of the karmic pattern is that as we learn and grow, the good deeds we do in one lifetime beget good fruit in the next. Resistance to growth, or actions that harm ourselves or others, or promote ignorance or fear, give rise to difficulties in the next lifetime. Those difficulties are designed to help us learn some important lesson and thereby overcome the difficulty. All difficulties, therefore, have something to teach us; they are also designed to help us evolve toward our ideal state. We tend to face the same kinds of lessons again and again until the lesson is learned, at which point we move on to another set of lessons, always getting closer to that ultimate state of perfection. As we learn our lessons, we also create good karma for ourselves, which is experienced either in this life, or the next, or both. In this way, we create our next life time by our deeds in this one.
This is a very simplistic explanation of karma, but one I believe is essentially true. I have had some memories, dreams, and reflections that have offered strong evidence that this basic belief is true, at least for me. But there is nothing I could say to convince anyone else of this belief. Either it resonates in your soul as true - in which case you already know this to be true - or it feels false and perhaps even stupid. Nothing outside you, I believe, can really convince you of this belief. Therefore, any attempt by me to persuade is basically a waste of time. There's no point in doing it.
Unfortunately out of that first belief often comes a second, which I believe is essentially unhealthy. That second belief is this: That any difficulty you may now be experiencing is due to mistakes you made in a previous life. It's easy for this second belief to arise, especially if you belief in a harsh or punitive universe. But I maintain that this second belief is impractical and unwise. It encourages people to come up with a fantasy about the past that limits their creativity and power in this lifetime. It also makes them feel like victims of a judgmental God. I don't believe that karma works that way. Everyone experiences difficulties, no matter what they did or didn't do in the past. Life is a school house with lessons that are sometimes enjoyable and sometimes difficult. Perhaps they have nothing to do at all with what you did in a previous lifetime. It's better to believe that the universe is essentially friendly, loving, and supportive - in other words, that it wants you to succeed, but not without effort and not without learning. Difficulties are challenges that we must learn from and overcome. That's basically the only practical approach I can take to such things and I see no real benefit to be derived by saying that your problems of today were caused by mistakes you made in a previous life.
Two positive ways of viewing karma
The first beneficial way of viewing karma, I believe, is to view all your friends as having been in your life before and now have something very important to help you learn, just as you have something to help your friends learn. Everyone we meet who takes an important role in our lives probably has come into our lives for a specific purpose. We should make an effort at discerning that purpose and to actively engage in fulfilling that purpose, to the best of our ability. Not only does this approach give deep meaning to all our relationships, but it encourages us to treat people with respect, understanding, and love. It also helps us to appreciate that everyone we know has something important to teach us, which means we should listen perhaps a little more.
The second helpful aspect of karma is to know that every good cause you make today begets a good result sometime in the future. Make good causes every day. It's possible that these good causes will accrue into something truly great and wonderful and that your life, ultimately, will be very happy. If you make good causes, and the idea of multiple lifetimes turns out to be true, you'll also be a great and happy person in the next life time, as well.
We don't know for sure whether there are multiple lifetimes. Nor do we know if our lives are shaped by the events of a previous life. What we do know is that every good deed sends goodness and love out into the world. In this way, each of us shapes life on earth, as well as the quality of our own lives.