The Brahmavadīs claim that Brahman alone is real, and the material world as well as Vaikuṇṭha are unreal or illusory. They liken the material world to a dream, with no reality to it.
Śrī Jīva Goswami refutes this view in Anuccheda 23 of the Bhagavat Sandarbha by establishing that māyā is a śakti of Bhagavān, which means that it is eternal [and hence real] because Bhagavān is eternal. For example, he quotes the following verse from the Caturveda-śikhā:
स्वरूपभूतया नित्यशक्त्या मायाख्यया युतः अतो मायामयं विष्णुं प्रवदन्ति सनातनम्
The eternal supreme person, Śrī Viṣṇu, is called Māyāmaya (the possessor of Māyā) because He is endowed with His eternal energy, called Māyā, as part of His eternal nature.
Being Bhagavān’s śakti, māyā is real and not an illusion.
Śrī Jīva adds:
ततः सा च माया मिथ्याकल्पिका न भवतीति गम्यते।न हि मरुमरीचिकाजलेन केचिदार्द्रा भवन्तीति: This maya shouldn’t be regarded as merely illusory or imagined, for no one gets wet from the water in a mirage.
Now of course, there are verses in the Purāṇas, including the Bhāgavatam, where the material world is compared to a dream. Śrī Jīva explains how to understand such verses. As an example, in Anuccheda 41 of the Bhagavat Sandarbha, he takes up Brahmā’s words in SB 10.14.22 which compare the universe to a dream:
tasmād idaṁ jagad aśeṣam asat-svarūpaṁ
svapnābham asta-dhiṣaṇaṁ puru-duḥkha-duḥkham
tvayy eva nitya-sukha-bodha-tanāv anante
māyāta udyad api yat sad ivāvabhāti
Therefore, this entire universe, which is insubstantial, like a dream, which covers consciousness, which is full of abundant and endless misery, and which arises out of your māyā śakti, still appears as real because it is situated in You, who are limitless and possess a body that is eternal, full of bliss and consciousness.
At issue is the word svapnābham or ‘like a dream’ which can be misinterpreted to mean that the world is a dream or an illusion. Śrī Jīva refutes such interpretations by quoting the Brahma-sūtra 2.2.29. He writes:
मुहुरुद्भवतिरोभवत्वादेव स्वप्नाभं तत्तुल्यं न त्वज्ञानमात्रकल्पितत्वादपि “वैधर्म्याच् च न स्वप्नादिवत्” इति न्यायेन
“The universe has been likened to a dream simply because it appears and disappears repeatedly, and not to imply that it is a product of the imagination due to ignorance. As Brahma-sūtra states, ‘Because the universe has different characteristics, it is not like a dream’.
Thus, the comparison with a dream depicts the fact that objects perceived in a dream tend to be in a state of rapid flux, while the corresponding objects do not undergo rapid change in the waking state. Likewise, in the spiritual world, objects are eternal and do not transform, while they do so in the material world. In this sense, the material world is analogous to a dream. But it is existent, and it is real, and not just a product of one’s imagination. As Śrī Jīva pragmatically notes, we experience things like getting wet in the rain, because they are real. We are not imagining that we are getting wet, like in a mirage.
If one were to argue that dreams are fundamentally unreal, then that is also refuted in the Bhāgavat Purāṇa itself. For example, SB 4.29.64-65:
nānubhūtaṁ kva cānena dehenādṛṣṭam aśrutam kadācid upalabhyeta yad rūpaṁ yādṛg ātmani tenāsya tādṛśaṁ rājan liṅgino deha-sambhavam śraddhatsvānanubhūto ’rtho na manaḥ spraṣṭum arhati
Sometimes we suddenly experience forms or other phenomena that we have never known, seen or heard in our present life. O King, know that these constructed arise out of the subtle body, or the psyche, for there is no possibility of mental imaging without the prior act of perception. (SB 4.29.64-65).
The main point is that what we recall in dreams is a mixture or superimposition of disparate events we have already experienced in this life, and in past lives. Therefore, dreams are real in the sense that they are jumbled recall of memories of past experiences. As the experiences are real, so are the memories. Thus, when the material world is compared to a dream, it does not follow that the material world is unreal or does not exist. It exists, but what is unreal is our misidentification with it, because we are not material.