Sensations and Images:

The dualism of mind and matter, if we have been right so far, cannot be allowed as metaphysically valid. Nevertheless, we seem to find a certain dualism, perhaps not ultimate, within the world as we observe it. The dualism is not primarily as to the stuff of the world, but as to causal laws. On this subject we may again quote William James. He points out that when, as we say, we merely "imagine" things, there are no such effects as would ensue if the things were what we call "real." He takes the case of imagining a fire.
"I make for myself an experience of blazing fire; I place it near my body; but it does not warm me in the least. I lay a stick upon it and the stick either burns or remains green, as I please. I call up water, and pour it on the fire, and absolutely no difference ensues. I account for all such facts by calling this whole train of experiences unreal, a mental train. Mental fire is what won't burn real sticks; mental water is what won't necessarily fanciful or true, and precipitated together as the stable part of the whole experience--chaos, under the name of the physical world.
In this passage James speaks, by mere inadvertence, as though the phenomena which he is describing as "mental" had NO effects. This is, of course, not the case: they have their effects, just as much as physical phenomena do, but their effects follow different laws. For example, dreams, as Freud has shown, are just as much subject to laws as are the motions of the planets. But the laws are different: in a dream you may be transported from one place to another in a moment, or one person may turn into another under your eyes. Such differences compel you to distinguish the world of dreams from the physical world.
If the two sorts of causal laws could be sharply distinguished, we could call an occurrence "physical" when it obeys causal laws appropriate to the physical world, and "mental" when it obeys causal laws appropriate to the mental world. Since the mental world and the physical world interact, there would be a boundary between the two: there would be events which would have physical causes and mental effects, while there would be others which would have mental causes and physical effects.