In this verse the poet says he does not believe in the pessimistic view of life that regards it unreal (“an empty dream”) and death as the final end of all life.
On the contrary he emphatically asserts in the next verse, that “Life is real, life is earnest”; and the whole poem becomes a solemn exhortation to take life seriously and live it earnestly and nobly.
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One reason why we should take life seriously, which is implied in the poem, is that this present life is not all. It is a preparation for a higher life, which we may attain to after death.
If death ended our existence altogether, we might perhaps (though not necessarily) agree with those whose motto is “A short life and a merry one”, and who say, “Let us eat, drink and be merry, for to-morrow we die”, or with those melancholy people who say that if this life is all, it is not worth living, and the sooner it is over the better.
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But all religions, however much they may differ on other points, agree in holding out the hope of immortality, and in teaching that the present life is a probation and training for another. If this is so, we may look on life as the schooldays of our existence.
What we shall be hereafter will depend on how we live here. No wonder, then, that we should be expected to take this life seriously, for it is no “empty dream”.
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But even if we believe that death ends all and there is no life hereafter, that is no real reason for regarding this life as unreal, or so worthless that it can be wasted in folly.
Indeed, if this is the only life we shall have, it should be all the more precious to us. If you have many rupees, you do not much mind losing one; but if you have only one, you guard it jealously, for if you loss it, you lose all.
Hence the denial of immortality is no reason for wasting the only life we have, and saying “Let us eat, drink and be merry, for to-morrow we die.” Rather, we should take it seriously and make the most of it and get out of it all we can while it lasts.
So, in any case, “Life is real, life is earnest”, and not a mere “empty dream”.