Everything has a purpose. And that purpose has a purpose of its own, each one higher than the last. Rabbi Nachman of Breslov uses this insight to explain why you must judge every person favorably.
The Talmud tells of Rabbi Yonatan seeing a basket of jewels at the bottom of the sea, guarded by fish called birsha (Bava Batra 74a). A diver went down to retrieve it, was attacked, and drove the fish away with vinegar. A heavenly voice declared: this basket belongs to the wife of Rabbi Chanina ben Dosa, who will one day store in it sky-blue wool for the tzaddik (a righteous person)im (the righteous) in the World to Come.
Rabbi Nachman reads this as a parable about the chain of purpose. You build a house so you can rest. You rest so you can serve God. You serve God so that... The goal of each thing is closer to the original divine thought than the thing itself, because "last in deed is first in thought" (Sabbath Evening Liturgy). The completed house was the first thing imagined.
The ultimate purpose of all creation is the delight of the World to Come, a reality so exalted that "no eye has seen it" (Isaiah 64:3). Ordinary people cannot grasp it. But the tzaddikim can, and each Jew receives a portion of this understanding according to their connection to the true tzaddik.
This is where judging favorably enters. When anger rises, you must sweeten it with mercy: "In wrath, remember mercy" (Habakkuk 3:2). By choosing mercy over judgment, you create a crown for the humble, those who flee from honor. They did not seek authority. But mercy crowns them: "Who crowns you with kindness and mercy" (Psalms 103:4).
Judging another person favorably is not naive optimism. It is an act of spiritual architecture, connecting the visible deed to its hidden purpose, and trusting that the chain of purpose leads somewhere higher than what your eyes can see.