The Buddha rejected both extremes of eternalism and nihilism.
To develop Right View or Perfect View, we must first be aware of two views which are considered imperfect or wrong.
The first view is eternalism. This doctrine or belief is concerned with eternal life or with eternal things. Before the Buddha's time, it was taught that there is an abiding entity which could exist forever, and that man can live the eternal life by preserving the eternal soul in order to be in union with Supreme Being. In Buddhism, this teaching is called sassata ditthi ----the view of eternalists. Such views still exist even in the modern world owing to man's craving for eternity.
Why did the Buddha deny the teaching of eternalism? Because when we understand the things of this world as they truly are, we cannot find anything which is permanent or which exists forever. Things change and continue to do so according to the changing conditions on which they depend. When we analyse things into their elements or into reality, we cannot find any abiding entity, any everlasting thing. This is why the eternalist view is considered wrong or false.
The second false view is nihilism or the view held by the nihilists who claim that there is no life after death. This view belongs to a materialistic philosophy which refuses to accept knowledge of mental conditionality. To subscribe to a philosophy of materialism is to understand life only partially. Nihilism ignores the side of life which is concerned with mental conditionality. If one claims that after the passing away or ceasing of a life, it does not come to be again, the continuity of mental conditions is denied. To understand life, we must consider all conditions, both mental and material. When we understand mental and material conditions, we cannot say that there is no life after death and that there is no further becoming after passing away. This nihilist view of existence is considered false because it is based on incomplete understanding of reality. That is why nihilism was also rejected by the Buddha. The teaching of kamma is enough to prove that the Buddha did not teach annihilation after death; Buddhism accepts 'survival' not in the sense of an eternal soul, but in the sense of a renewed becoming.
Throughout the Buddha's long period of teaching the Dhamma to His followers, He actively discouraged speculative arguments. During the 5th century B.C. India was a veritable hive of intellectual activity where scholars, yogis, philosophers, kings and even ordinary householders were constantly engaged in the philosophical arguments pertaining to human existence. Some of these were either ridiculously trivial or totally irrelevant. Some people wasted valuable time arguing at great length about all manner of subjects. They were far more concerned about proving their powers in mental gymnastics than seeking genuine solutions to the problems that beset humanity. (In the 18th century Jonathan Swift satirized a similar pastime in England when he showed the Lilliputians in 'Gulliver's Travels' waging a war to decide whether an egg should be broken on its sharp end or its broad end).
The Buddha also refused to get involved in speculations regarding the universe. He stated very clearly that the problem facing mankind is not in his past or his future but in the immediate present. Knowledge about Eternalism or Nihilism can in no way help man to break the present fetters which bind him to existence and which are the source of all his feelings of discontent which arise from his inability to completely satisfy his cravings. The Buddha stated that before one can begin to tread the path which leads to Nibbana one must have Right View. Only when one knows clearly what one is seeking will one be able to attain it.