It is the inner self that is called a spiritual self because it is in heaven’s light, and that light is spiritual. It is the outer self that is called an earthly self because it is in the light of this world, and that light is earthly. Anyone whose inner level is in heaven’s light and whose outer level is in this world’s light is a spiritual individual in both respects, but people whose inner level is not in heaven’s light but in this world’s light, where their outer level is as well, are earthly individuals in both respects. Spiritual individuals are the ones called “living” in the Word, while earthly individuals are the ones called “dead.”
When our inner level is in heaven’s light and our outer level is in this world’s light, we think in ways that are both spiritual and earthly, but our spiritual thinking flows into our earthly thinking, and that is where we perceive it. However, when our inner level is caught up in this world’s light along with our outer level, we think materialistically rather than spiritually. That is, we base our thinking on the kinds of things we find in this physical world, all of which are composed of matter.
To think spiritually is to think about actual things as they really are, seeing truths in the light of truth and perceiving what is good because we love it. It is seeing the qualities of things and perceiving their emotional impact apart from their material characteristics. In contrast, thinking materialistically is thinking, seeing, and perceiving things as inseparable from matter and as in matter, and therefore relatively crudely and dimly.
from New Jerusalem, Sections 38, 39