Character creation is the fun part of writing. Testing your characters to the limit is even better.
Testing whether your Character will act out their values is one of the main reasons people will read your stories. Basically, having decided on a set of character values for your protagonist, your antagonist (whether a person, society, your world, or the ‘system’) must embody the opposite values, but both must want the same prize. This ensures they come into direct conflict and the values of each are tested.
The testing occurs through the action of the story. If your protagonist is a pacifist, will they stand by and watch their friend die at the hands of another? Or will they act in their defence? How, after the action, do they justify going against their own values? How have they ‘grown’ / ‘learned’ / ‘changed’ through the incident?
Everyone has the ability within themselves to both plumb the depths of humanity and to soar to the heights. We also have the ability to not only hold several contradictory views at once, but to justify virtually anything so that we are in the ‘right’.
The film Schindler’s List is a great example of the internal conflict within human nature. Here is a man who does good things for bad reasons—this is the sort of character that keeps our readers glued to the text, furiously turning pages.
Do you think any of the despots in the twentieth century believed they were evil, or the villain of the plot? All, I suspect, sincerely thought they were making their society, and the world, a better place. They alone were the courageous souls taking the necessary decisions others flinched away from. In their eyes, and the narrative of their lives (more about this later), they were the heroes.
The only source for this type of internal conflict is either other people’s writings (whether fictional or factual) or our own experience. Fiction writing is very often just an extreme version of the things we ourselves have experience, that is why some people claim that all fiction is autobiographical to some extent.
Try taking some of your own internal/emotional conflicts, put your characters into the scenario (their values and actions might be very different to your own), then extrapolate all the variables and conflicts to their maximum extent – this is how you turn your own mundane experiences into exciting fiction.