The development of the third status or stage of life brings about the development of the capacity to fuse the two formerly apparently contradictory stages, that of the ultimate fragmentation in the form of the atom and material form, and the persistence of that individual expression, and the give and take and dissolution for the purpose of interchange and breakdown of the forms to create new opportunities and forms.
This third status works to bring about both the persistence of the individual form and the interchange that characterise the prior two steps. This cannot come about until the mental stage emerges. It is clear that the individual separate formation cannot possibly have or be granted the eternal persistence that atomic existence in matter possesses. Such a result would yield an unchanging world without evolutionary potential. The emergence of the mental being allows a consciousness that links the past with the future with continuity, and the development of the psychic being or soul allows this continuity to extend beyond the borders of life, and death and new life with a conscious development and continuity spanning across different forms. There is both in this an individual continuity and the continuity of the aggregate, the society, the world, the eco-sphere and bio-sphere within which the individual being lives and thrives. The individual has both its own value as well as its inherent role in the wider manifestation, and these provide a sense of persistence both of the individual and the world.
reference: Sri Aurobindo, The Life Divine, Chapter 21, The Ascent of Life