The scene is unchanged, but now it has stopped raining and a mist obscures the outside landscape. With dinner finished, Oswald out for a walk, and Regina busy with the laundry, Mrs. Alving and Manders continue their conversation. She tells how she managed to hush up the scandal of Alving's conduct by providing Joanna with a handsome dowry and having her respectably married off to Jacob Engstrand. Manders is shocked that the carpenter lied to him by confessing of his "light behavior" with Joanna and so deceived the pastor to perform the ceremony. How could a man, "for a paltry seventy pounds" allow himself to be bound in marriage "to a fallen woman." Mrs. Alving points out that she was married to a "fallen man," but Manders says the two cases are as different as night and day. Yes, his hostess agrees, there was a great difference in the price paid, "between a paltry seventy pounds and a whole fortune"; besides, her family arranged the marriage, for she was in love with someone else at the time. To answer her meaningful glance, Manders weakly concludes that at least the match was made "in complete conformity with law and order." I often think that law and order are "at the bottom of all the misery in the world," retorts Mrs. Alving. She regrets her lifelong cowardice. Were she not such a coward in the name of law and order, she says, "I would have told Oswald all I have told you, from beginning to end."
Manders points out that she taught her son to idealize his father and as a mother she must feel forbidden to shatter his illusions. "And what about the truth?" asks Mrs. Alving. "What about his ideals?" responds Manders, underlining Ibsen's basic equation that "ideals" equal "lies".
Although Mrs. Alving wishes to quickly find a post for Regina before Oswald gets her in trouble, she regrets her cowardice. To prevent further deceit she should rather encourage the marriage or any other arrangement, she tells the pastor. Manders is shocked that she can suggest a relationship based on incest; as to her so-called cowardice, he denies there was any better way to tell Oswald of his father. By being a coward, Mrs. Alving explains, she succumbs to ghosts:
I am frightened and timid because I am obsessed by the presence of ghosts that I never can get rid of . . . When I heard Regina and Oswald in there it was just like seeing ghosts before my eyes. I am half inclined to think we are all ghosts, Mr. Manders. It is not only what we have inherited from our fathers and mothers that exists again in us, but all sorts of old dead ideas and all kinds of old dead beliefs and things of that kind. They are not actually alive in us, but there they are dormant all the same, and we can never be rid of them. Whenever I take up a newspaper and read it I fancy I see ghosts creeping between the lines. There must be ghosts all over the world. They must be countless as the grains of the sands, it seems to me. And we are so miserably afraid of the light, all of us.
Manders blames these strange ideas on her reading — this "subversive, free-thinking literature" — but she says her ideas come from suffering what Manders himself praised "as right and just what my whole soul revolted against as it would against something abominable." You think it was wrong for me to entreat you as a wife to return to your lawful husband "when you came to me half distracted and crying, "Here I am, take me!'" asks the pastor. "I think it was," she answers.
Manders declares he can no longer allow a young girl to remain in her house and Regina must go home to her father's care. At this moment there is a knock at the door. Engstrand enters, respectfully requesting the reverend to lead "all of us who have worked so honestly together" on the orphanage building in some concluding prayers. Closely questioning Engstrand about his marriage and other matters, Manders offers the carpenter a chance to explain what must "lie so heavy" on his conscience. The old man makes a fine show of piousness and sensitive feelings as he tells his story. Manders, with tears in his eyes at his flawless life, offers Engstrand a strong handshake of faith and friendship. The pastor, turning to his hostess, asks if she doesn't think that we must be "exceedingly careful" before "condemning our fellow men." "What I think is that you are, and always will remain, a big baby, Mr. Manders," she answers, and thinks that "I should like to give you a big hug!" Hurriedly, the pastor goes out to conduct the prayer meeting.
Discovering Oswald in the dining room, Mrs. Alving sits down with him for a chat. Her son complains that, besides being constantly tired, the lack of sunshine prevents him from painting. This is no ordinary fatigue, he tells his mother, but it is part of a sickness a Paris doctor diagnosed for him. He was told he had this "canker of disease" since his birth. Oswald continues that "the old cynic said, 'The sins of the fathers are visited on the children.'" To prove that his father lived a dutiful, virtuous life, the boy read some of his mother's letters to the doctor. As Mrs. Alving softly repeats, "The sins of the fathers!" Oswald confesses of a single instance of "imprudence" that must have infected him. He despairs that he threw his life away for a brief pleasure and asks his mother for something to drink to drown "these gnawing thoughts." Regina brings in a lamp and fetches champagne.
"I can't go on bearing this agony of mind alone," Oswald tells his mother. He would like to take Regina with him and leave home. Because she has "the joy of life in her" Regina will be his salvation. "The joy of life?" asks Mrs. Alving with a start, "Is there salvation in that?" Regina brings more wine and Oswald asks her to fetch a glass for herself. At her mistress' nod, the girl obeys and takes a seat at the table. Mrs. Alving wants to know more about the "joy of life." People here at home are taught to consider work as a curse and punishment for sin and that life is a state of wretchedness, Oswald explains. No one believes that in Paris, where "the mere fact of being alive is thought to be a matter for exultant happiness. There is light there and sunshine and a holiday feeling," he says. Oswald says he must leave home. If not, "all these feelings that are so strong in me would degenerate into something ugly here," he tells his mother. She regards him steadily for a moment. Now, for the first time, she murmurs, "I see clearly how it all happened. And now I can speak." She is about to tell Oswald and Regina the truth when Manders suddenly enters, cheerful from having spent an "edifying time" at the prayer meeting. He says he has decided that Engstrand needs help with the sailors' home and Regina must go and live with him.
"Regina is going away with me," Oswald states, and Manders turns to Mrs. Alving in bewilderment. "That will not happen either," she declares, and despite the pastor's pleading is about to speak openly. At this moment they hear shouting outside and through the conservatory windows they see a red glare. The orphanage is ablaze. "Mrs. Alving, that fire is a judgment on this house of sin!" cries Manders. As they all rush out to the orphanage, he is left wringing his hands. "And no insurance," he moans, and then follows them.
Formally developing the drama, the second act brings out details and enlarges the action, characterizations and motives which were introduced in the first act. Moreover, the acceleration of events taking place in this scene, their effects heightened by the rich symbolism in Mrs. Alving's "ghosts" speech, leads the audience to await the final nemesis or judgment that will occur in Act III. More specifically, the purpose of this second part is to focus attention on Oswald and complete the characterizations of the secondary characters. By so doing, the playwright can fully disclose the consequences when individuals live by old beliefs and traditional dogma and then assess the guilt for this crime.
Exposing the history of their previous relationship, the conversation between Mrs. Alving and Pastor Manders provides the audience with a completed portrait of the clergyman. First showing Manders' hypocrisy and self-centeredness, Ibsen sums him up as a "big baby." The dramatist, by allowing Engstrand to recite the humbug story of his virtuous life, fully depicts the moral irresponsibility of the carpenter. With these two characters completely developed, Ibsen may now investigate the problem of Mrs. Alving and dwell on the fruits of her cowardice, Regina and Oswald.
Having in common their "joy of life" inherited through their father, Regina and Oswald show their youthful innocence by being unaware of their near-incest relationship. When Mrs. Alving discovers that Oswald, like his father before him, feels that this exuberance of life will degenerate in the sanctimonious home atmosphere, she suddenly understands why her husband became a dissipated drunkard. To prevent further deceit, she prepares Oswald and Regina to comprehend the truth of their origins and the nature of their heritage. As she begins to say the words that will raze these old lies of her past life, they discover the orphanage is ablaze. The symbol of hypocrisy and deceit — a worthy institution to serve society — is destroyed in the moment of truth.