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1. Wrong view of there are “no things”?
@ChrisW, “I doubt whether anyone believes "there are no things"”
Remember the 62 kinds of wrong views in Brahmajāla Sutta (DN 1) [https://suttacentral.net/dn1/en/sujato]? With annihilationist and nihilists, or flat-earthers and anti-vaxxers around, yes you can make a bet that there are plenty people who believes in silly things. If there are really “no things”, how can beings cling to the Five Aggregates.
2. Has Nagarjuna misrepresented the Buddha?
In the Mūlamadhyamakakārikā, "[A]ll experienced phenomena are empty (sunya)… they are devoid of a permanent and eternal substance (svabhava) [literally "own-being", "self-nature", or "inherent existence"]” - https://en.wikipedia.org/wiki/Nagarjuna
I’m not sure how accurate is the translation and interpretation. But let’s assume that Nagarjuna clearly did not say that “there are no things" (which is what a nihilist would say, an extreme he warned about), but did think that “all things are empty of inherent existence”. What Nagarjuna got it right was "dependent arising”, “impermanence”, and “emptiness”. What Nagarjuna got it wrong was Buddha wasn’t interested in the view of existence or non-existence, self or no-self, essence or no-essence, etc. Imagine if somebody purchase something, even before opening the box, they would have at least some expectations of how the goods should look like. So similarly, when analysing the dhammas, Nagarjuna was still expecting some kind of self/existence view, whereas the Buddha has already put it aside or done it away completely. If you truly are freed from any kind of views, grasping, and attachment towards the “goods” via the Middle Way, your mind will not be obsessed or even be interested whether if there is something inside (eternalist) or nothing inside (nihilist) the “box.”
3. How is this related to Foam Sutta (SN 22.95)?
The “emptiness” in Foam Sutta (SN 22.95) [https://suttacentral.net/sn22.95/en/sujato] is not addressing the self/existence issue, but about the drawbacks of Five Aggregates. Again imagine if somebody orders something online, and upon delivery of it and before opening the box, they would have some preconceived notion of it. If it turned out as expected or better, then they will be happy and satisfied. But if it turned out not to their liking, worse, or even an empty box, then they will be angry or feel cheated. Similarly, (as how I interpret) the Foam Sutta (SN 22.95) is describing that people tend to assume the Five Aggregates as reliable, consistent, permanent, attractive, and pleasant (which is why they desire, attach, and motivated to pursue it in the first place). But upon closer examination, they will realise that the Five Aggregates is actually full of drawbacks in terms of impermanence and suffering (in fact the more desirable it is, the more painful to lose it). Appearing “empty, void, hollow, and insubstantial” is just like the disappointment of a swindled online shopper didn’t get what they paid for, and the disillusionment of a noble person realising the drawbacks of Five Aggregates. The escape or solution is simply relinquishing any desire for Five Aggregates. Of course, opponents are quick to jump and shoot the Buddha for being a pessimist, but it’s not the case. While this sutta particularly focuses on the drawbacks of Five Aggregates, you can see throughout the Pali Canon, the Buddha does mention the full spectrum of arising, passing away, gratification (opposing nihilist & pessimist), drawback (opposing eternalist & optimist), and escape of Five Aggregates.
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It is nice that you are interested in the teaching of "the second Buddha", precious Master Nagarjuna.
The Foam Sutta is actually very popular in Tibetan Buddhism, and is often quoted in commentaries on Kangyur texts.
The way Mahayana usually interprets the message of Foam Sutta is not as much about impermanence, as is about the empty and illusory nature of phenomena. Indeed, as foam appears solid but is empty inside, phenomena seem to have stable and well-defined identities but upon careful scrutinizing examination turn out to be ill-defined approximations.
Similar to the individual bubbles in the foam, covered with moving colorful patterns, our subjective worlds may look full of exciting hopes and promises, but as we look at it with the sobered up vision of a mortally ill, they turn out to be empty of real value, other than the illusory hope of solving today's problems and getting to a better tomorrow, only to find ourselves facing another set of problems and another promise of better tomorrow.
Physical objects are certainly not unlike the bubbles of the foam either. They appear solid only if you look briefly and in passing, but if you watch long enough you can see how they come from the whirlpool of worldly events and burst into the nothingness of the bygone centuries, leaving but photographs at best.
Theravada loves its impermanence, but we in Mahayana see impermanence as merely an inevitable attribute of things not being statically delineated entities out there, but amorphous ever-mixing conglomeration delineated by the observer as of the moment of observation.
There is no need to imagine some wrong understanding and impute it to Nagarjuna using all sorts of invalid quotes and bad translations if you can read him with the same respect you read suttas and try to understand what he could have meant.
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The five aggregates are conditioned things. They are impermanent. Clinging to impermanent things will result in suffering.
But that's not all. The five aggregates are not all that they seem to be. Why does a person crave a beautiful form of a human being and is sexually attracted to it? Craving is a habit of objectification-classification aka reification (papanca) - see this answer.
If you see the form of a human being as an impermanent lump of flesh and bones as prescribed in the asubha contemplation, then this type of craving will be diminished.
The foam simile is a generalization of asubha contemplation to cover all the five aggregates.
But how does this relate to Nagarjuna's Madhyamaka? According to Madhyamaka, all things are empty of intrinsic essence (svabhava).
The beautiful form of a human being, is such a thing, which is empty of intrinsic essence i.e. it is empty of the essence given to it by your mind. If papanca is like baking, then svabhava seems to be the cake.
In other words, Nagarjuna is talking about the mental concept of things, and further, he generalizes to cover everything, even physical objects and Nirvana. If you see that Nagarjuna is talking about the mental concept of things, then you would find that he is not contradicting the Buddha.
To my understanding, Nagarjuna is not saying that the world is an illusion, rather he is saying that your mental model of the world is an illusion. To think about anything in the world, you actually need to have a mental model of it.
This can be further linked to anatta. Objectification-classification (papanca) assigns intrinsic essence (svabhava) to things, relative to its relationship to the mental idea of the self (atta), which itself has intrinsic essence (svabhava), given to it by objectification-classification (papanca). According to Snp 4.14, when you put an end to "I am the thinker", the root of objectification-classification (papanca), you will end craving and clinging. And by this, you end suffering.