Iqbal considers the most traditional answer to 'what is the ego?' — the soul-substance theory championed by Ghazālī's school — and dismantles it. Drawing on Kant's paralogisms, he shows that indivisibility does not entail indestructibility and that experiences are acts of reference, not passive qualities of a hidden substrate. Whatever the ego is, it cannot be a static thing lurking beneath the flow of experience.
Section 3 established the ego's distinctive characteristics — its non-spatiality, its possession of true time-duration, and its essential privacy — without yet specifying what the ego is. The section closed with the question: 'What is the nature of this "I"?' Section 4 begins answering that question by considering and rejecting the first major candidate: the soul-substance theory, the view that the ego is a simple, indivisible, immutable substance underlying and unifying our mental life.
The section advances through two movements. First, Iqbal presents the soul-substance theory as articulated by the Muslim theological school of which Ghazālī is the chief exponent. On this view, the ego is a jawhar basīṭ — a simple substance, entirely distinct from the flow of conscious experience, persisting unchanged through the passage of time and serving as the substrate in which mental states inhere as qualities. This theory was developed to answer the genuine problem of personal identity: I can recognise you today because I — the same unchanging substance — was present at our original meeting and am present now at the act of memory. The theory's interest, as Iqbal notes, was primarily metaphysical: it aimed to secure the soul's immortality by establishing its simplicity and indivisibility, on the reasoning that what has no parts cannot be decomposed.
Second, Iqbal dismantles this theory through a convergence of Kantian critique and independent philosophical argument. Kant's paralogisms of pure reason showed that the transition from the formal 'I think' that accompanies all experience to an ontological substance underlying experience is logically illegitimate — it confuses a condition of thought with a thing that exists independently of thought. Even granting the soul's indivisibility, Kant observed, this does not prove its indestructibility: a simple substance might fade gradually into nothingness or cease to exist instantaneously. Iqbal then presses two further objections. First, mental experiences are not 'qualities' of a substance in the way weight is a quality of a body; they are, as the philosopher John Laird observed, acts that constitute 'a new world and not merely new features in an old world.' Second, the soul-substance theory cannot explain phenomena such as alternating personality — cases in which the same body appears to house different selves at different times — since the theory cannot accommodate multiple substances controlling a single body.
The section is architecturally crucial. By rejecting the soul-substance theory, Iqbal closes off the most traditional and intuitively appealing account of the ego available in Islamic theology. The ego cannot be a fixed, unchanging thing that endures beneath the flow of experience. Whatever the ego is, it must be something more dynamic, more intimately bound up with the flow of experience itself, and more capable of accommodating the complexities of actual psychological life. This clearing of the ground prepares for Iqbal's constructive account of the ego in subsequent sections — an account that will draw on Bergson, James, and the Qur'anic vision of the self as a developing, aspiring reality rather than a static substance.