I've been advising a few people on self-inquiry and getting to the Witness/I AM stage. That is an important and precious realization, although not the final phase of practice as the structure of subject and object, self and phenomena (existing inherently) remains intact.

But it is not possible to immediately reach the collapse of witness or subject/object structure prior to nondual and anatta insights, so one always start from 'observing'. Telling people about non dual and anatta simply provides them an intellectual idea at the beginning, even if he/she is able to grasp it conceptually (and many do not). Practically speaking, when practicing one always begins with witnessing (and with right pointers can be led to Self-Realization) as a start, and that's perfectly fine. But with right view and guidance, one will go through all the phases.

In fact the collapse of the Witness and the subject/object structure is not a denial of the "Witnessing" per se, but clarifying its nature such that it is realised to be non-dual and empty. The luminous clarity, Presence, Awareness is not denied.

The famous Zen Master Charlotte Joko Beck writes about this below.

Excerpt from Everyday Zen by the Zen Master Charlotte Joko Beck:

The Observing Self

“Who is there?” asks God.
“It is I.”
“Go away,” God says. . .
Later . . .
“Who is there?” asks God.
“It is Thou.”
“Enter,” replies God.

What we ordinarily think of as the self has many aspects. There is the thinking self, the emotional self, and the functional self to which does things. These together comprise our describable self. There is nothing in those areas that we cannot describe; for instance, we can describe our physical functioning: we take a walk, we come home and we sit down. As for emotion: we can usually describe how we feel; when we get excited or upset, we can say that our emotion arises, peaks, and falls in intensity. And we can describe our thinking. These aspects of the describable self are the primary factors of our life: our thinking self, our emotional self, our functional self.

There is, however, another aspect of our self that we slowly get in touch with as we do zazen: the observing self. It is important in some Western therapies. In fact, when used well, it is why the therapies work. But these therapies do not always realize the radical difference between the observing self and other aspects of ourselves, nor do they understand its nature. All the describable parts of what we call ourselves are limited. They are also linear; they come and go within a framework of time. But the observing self cannot be put in that category, no matter how hard we try. That which observes cannot be found and cannot be described. If we look for it there is nothing there. Since there is nothing we can know about it, we can almost say it is another dimension.

In practice we observe—or make conscious—as much as we can of our describable selves. Most therapies do this to some degree; but zazen, continued for years, cultivates the observing self more deeply than do most therapies. As we practice we must observe how we work, how we make love, how we are at a party, how we are in a new situation with strange people. There is nothing about ourselves that shouldn’t come under scrutiny. It’s not that we stop other activities. Even when we are completely absorbed in our daily life the observing function continues. Any aspect of ourselves that is not observed will remain muddy, confusing, mysterious. It will seem independent of us, as though it is happening all by itself. And then we will get caught in it and carried away into confusion.

At one time or another all of us get carried away by some kind of anger. (By “anger” I mean also irritability, jealousy, annoyance, even depression.) In years of sitting we slowly uncover the anatomy of anger and other emotion-thoughts. In an episode of anger we need to know all thoughts related to the event. These thoughts are not real; but they are connected with sensations, the bodily feelings of contraction. We need to observe where the muscles contract and where they don’t. Some people get angry in their faces, some people get angry in their backs, some people get angry all over. The more we know—the stronger the observer is—the less mysterious these emotions are, and the less we tend to get caught by them.

There are several ways to practice. One is with sheer concentration (very common in Zen centers), in which we take a koan and push hard to break through. In this approach what we are really doing is pushing the false thought and emotion into hiding. Since they are not real, we suppose that it is OK to push them out of the way. And it’s true that if we are very persistent and push on a koan long enough, we can sometimes break through temporarily to the wonder of a life that is free of ego. Another way, which is our practice here, is slowly to open ourselves to the wonder of what life is by meticulous attention to the anatomy of the present moment. Slowly, slowly we become more sophisticated and knowledgeable, so that (for example) we may know that when we dislike a person, the left corner of our mouth pulls down. In this approach everything in our life—the good and bad events, our excitement, our depression, our disappointment, our irritability—becomes grist for the mill. It’s not that we seek out the struggles and problems; but a mature student almost welcomes them, because we gradually learn from experience that as this anatomy becomes clear, the freedom and compassion increase.

A third way of practice (which I view as poor) is to substitute a positive for a negative thought. For example: if we are angry we substitute a loving thought. Now this changed conditioning may make us feel better. But it doesn’t stand up well to the pressures of life. And to substitute one conditioning for another is to miss the point of practice. The point is not that a positive emotion is better than a negative one, but that all thoughts and emotions are impermanent, changing, or (in Buddhist terms) empty. They have no reality whatsoever. Our only freedom is in knowing, from years of observation and experiencing, that all personally centered thoughts and emotions (and the actions born of them) are empty. They are empty; but if they are not seen as empty they can be harmful. When we realize this we can abandon them. When we do, very naturally we enter the space of wonder.

This space of wonder—entering into heaven—opens when we are no longer caught up in ourselves: when no longer “It is I,” but “It is Thou.” I am all things when there is no barrier. This is the life of compassion, and none of us lives such a life all the time. In the eye-gazing practice, in which we meditate while facing another person, when we can put aside our personal emotions and thoughts and truly look into another’s eyes, we see the space of no-self. We see the wonder, and we see that this person is ourselves. This is marvelously healing, particularly for people in relationships who aren’t getting along. We see for a second what another person is: they are no-self, as we are no-self, and we are both the wonder.

Some years ago in a workshop I did the eye-gazing exercise with a young woman who said her life had been shattered by the death of her father. She said that nothing she had done had given her any peace with this loss. For sixty minutes, we looked into each other’s eyes. Because of zazen practice, I had enough power that it was easy for me to keep my gaze steady and unbroken. When she wavered, I could pull her back. At the end she started to cry. I wondered what was wrong, but then she said, “My father hasn’t gone anywhere! I haven’t lost him. It’s fine, I’m at peace at last.” She saw who she was and who her father was. Her father was not just a body that had disappeared. In the wonder, she was reconciled.

We can practice observing ourselves becoming angry: the arising thoughts, the bodily changes, the heat, the tension. Usually we don’t see what is happening because when we are angry, we are identified with our desire to be “right.” And to be honest, we aren’t even interested in practice. It’s very heady to be angry. When the anger is major we find it hard to practice with it. A useful practice is to work with all the smaller angers that occur everyday. When we can practice with those as they occur, we learn; then when the bigger uproars come that ordinarily would sweep us away, we don’t get swept away so much. And over time we are caught in our anger less and less and less.
There is an old koan about a monk who went to his master and said, “I’m a very angry person, and I want you to help me.” The master said, “Show me your anger.” The monk said, “Well, right now I’m not angry. I can’t show it to you.” And the master said, “Then obviously it’s not you, since sometimes it’s not even there.” Who we are has many faces, but these faces are not who we are.

I have been asked, “Isn’t observing a dualistic practice? Because when we are observing, something is observing something else.” But in fact it’s not dualistic. The observer is empty. Instead of a separate observer, we should say there is just observing. There is no one that hears, there is just hearing. There is no one that sees, there is just seeing. But we don’t quite grasp that. If we practice hard enough, however, we learn that not only is the observer empty, but that which is observed is also empty. At this point the observer (or witness) collapses. This is the final stage of practice; we don’t need to worry about it. Why does the observer finally collapse? When nothing sees nothing, what do we have? Just the wonder of life. There is no one who is separated from anything. There is just life living itself: hearing, touching, seeing, smelling, thinking. That is the state of love or compassion: not “It is I,” but “It is Thou.”

So the way of practice that I’ve found to be the most effective is to increase the power of the observer. Whenever we get upset we have lost it. We can’t get upset if we are observing, because the observer never gets upset. “Nothing” can’t get upset. So if we can be the observer, we watch any drama with interest and affection, but without being upset. I’ve never met anyone who had completely become the observer. But there is a vast difference between someone who can be it most of the time and someone who can be it only rarely. The aim of practice is to increase that impersonal space. Although it sounds cold—and as a practice it is cold—it doesn’t produce cold people. Quite the opposite. When we reach a stage where the witness is collapsing, we begin to know what life is. It’s not some spooky thing, however; it just means that when I look at another person, I look at them; I don’t add on ten thousand thoughts to what I am seeing. And that is the space of compassion. We don’t have to try to find it. It’s our natural state when ego is absent. We have turned into very unnatural beings. But with all our difficulties, we have an opportunity open to us that no other animal has. A cat is the wonder; but the cat doesn’t know that, it just lives it. But as human beings we have the capacity to realize it. As far as I know, we are the only creature on the face of the earth that has that capacity. Having been given this capacity—being made in the likeness of God—we should be endlessly grateful that we have the opportunity to realize what life is and who we are.

So we need to have patience—not just during sesshin, but every day of our lives—to face this challenging task: meticulously to observe all aspects of our life so that we can see their nature, until the observer sees nothing when it looks out except life as it is, in all its wonder. We all have such moments. After a sesshin, we may look at a flower and for a second there is no barrier. Our practice is to open our life like this more and more. That’s what we are here on earth to do. All religious disciplines at bottom say the same thing: I and my Father are one. What is my Father? Not something other than myself, but just life itself: people, things, events, candles, grass, concrete, I and my Father are one. As we practice, we slowly expand this realization.

Sesshin is a training ground. I’m just as interested in what you will be doing two weeks from now when you find yourself in a crisis. Then will you understand how to practice? Observing your thoughts, experiencing your body instead of getting carried away by the fearful thoughts, feeling the contraction in your stomach as just tight muscles, grounding yourself in the midst of crisis. What makes life so frightening is that we let ourselves be carried away in the garbage of our whirling minds. We don’t have to do that. Please sit well.
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