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Reality is Both Natural and Objective
I previously stated that "reality" refers to to the natural world and only to the natural world. Gods and other supernatural entities are not part of the natural world by definition, and this excludes them from reality itself.
Beyond this, I believe that there is such a thing as objective reality. I mean this in the sense that there is an independent reality which exists outside of human consciousness. Just because I cannot see the tree with my eyes closed does not mean that the tree ceases to exist. This is not to say that our subjective experience of reality is not important. However, I believe that using phrases such as "subjective reality" or discussing "multiple realities" introduces unnecessary confusion. Our subjective experience of reality is vital, but it is no suitable replacement for reality itself.
I can agree with the postmodern view that people construct their own realities only up to a point. That point is where subjective experience of reality is equated with reality itself or where objective reality is actually denied. This is a form of mental masturbation with which I will not go along.
Connection to Reality is Healthy
Psychosis is recognized in virtually all circles as involving a break with reality. That is, a psychotic person can no longer distinguish between reality and fantasy. Psychotic individuals are viewed as ill and deserving of treatment in all cultures (although treatments certainly vary). Thus, an important sign of mental health involves one's connection to reality.
Part of what distinguishes psychosis from other forms of indulgence in fantasy is the degree of voluntary control the individual retains. A truly psychotic person cannot distinguish between reality and fantasy and is thus unable to control his/her behavior with reference to reality. This is quite different from daydreams where one knows what is real and what is fantasy and can intentionally alternate between them.
But Fantasy Feels Good
Much like drugs, fantasy does feel good. However, just like drugs, too much indulgence is unhealthy. The daydreamer, superstitious person, or religious believer knows (or can know with a little effort) the falsehood of his/her beliefs. This does not stop the beliefs from feeling good or even from having some short-term benefits. However, there is a clear long-term danger.
Much like drugs, prolonged indulgence in fantasy leads to suffering in reality. For example, the individual may ignore real-world problems by focusing on an afterlife. Also like drugs, the worse one's real life becomes, the more tempting it is to retreat to fantasy.
While temporary use of fantasy can be beneficial, learning to live in our natural, objective reality is far more healthy in the long run. By living in reality, we are better able to adapt to and change our environments. By confronting real sources of unhappiness, we are better able to cope.
But What Does it Mean to Live in Reality?
Simply put, learning to live in reality involves the exercise of reason and critical thinking to examine and modify one's beliefs. Beliefs are based on the application of reason, implying some degree of fluidity. New information with relevance to one's beliefs is actively sought, evaluated, and used to change one's beliefs. For example, my belief about the possible deterrent effect of capital punishment is based on scientific data which I have sought out and evaluated. Should new information emerge, my belief may change.