True irony--for there also is a false one--is the irony of love. It arises out of the feeling of finiteness and one's own limitation, and out of the apparent contradiction between this feeling and the idea of infinity which is involved in all true love. As in actual life and in the love which centres in an earthly object, a good-humoured raillery, which amuses itself with some little defect of character, either apparent or real, is not inconsistent with sincerity--not, at least, when both parties have no doubt of each other's affection, and its ardour admtis of no increase--but, on the contrary, lends to it an agreeable charm, even so is this true of that other and highest love.
Schlegel, Philosophy of Life and Philosophy of Language, Morrison, tr. p. 392.
Earlier he had given this warning:
For what else is this scientific irony of the inquiring thought and of the highest cognition, than a consciousness which, while it clearly perceives the secret cotnradictions which beset the mind,e ven in tis most earnest pursuit of the highest aim of life, has attained nevertheless to perfect harmony with itself.
I must not, however, omit to remind you that this term in modern phraseology has fallen very far below its primary meaning, and is often so taken as to designate nothing more than a mere playful mockery. In its original Socratic sense, however, such as it is found in the whole series of the thougth and the internal structure of Plato's dialogues, where it is developed to its fullest measure and proportion, irony signifies nothing else than this amazement of the thinking spirit at itself, which so often dissolves in a light, gentle laugh. And this light laugh again oftentimes beneath its cheerful surface conceals and involves a deeper and profounder sense, another and a higher significance, even the most exalted seriousness. (p. 390)
So the idea here is that love of truth, particularly as expressed in soliloquy or inner dialogue, involves an ironic appreciation of the disparity between the beloved and the lover, or between the lover and the love.