Hegel's philosophy of right and history has often been accused of political conservatism and optimism; this paper responds to such criticism by outlining a new interpretation. Hegel's major contribution to the philosophy of history does not lie in his evaluation of particular historical developments, but rather in his conceptual framework of understanding history. Hegel's main thesis is that the human world cannot be comprehended by merely describing causal relations, but must be understood in the light of the idea of freedom. We are bound to consider the human world as a holistically rational entity and the course of history as a broadly rational process, in which human beings strive to realize themselves. The paper introduces Donald Davidson's philosophy of language and mind, using his principle of charity to help us understand Hegel's philosophy of spirit and his commitment to the sovereignty of reason in the human world and the progress of history.