Although the living entity is constitutionally conversant with the spiritual energy, or has the potency to understand it, he is covered by the material energy and consequently believes himself to be the body. This false identification is called "false ego." Deluded by the false ego, the bewildered living entity in material existence passes through different bodies and suffers various kinds of miseries. Knowledge of the living entity's true position is possessed to different extents by different types of living entities.
In other words, it is to be understood that the living entity is part and parcel of the spiritual energy of the Supreme Lord. Because the material energy is inferior, man has the ability to get free from the covering of this material energy and utilize the spiritual energy. It is stated in the Bhagavad-gītā that in the conditioned state the superior energy (the living entity) is covered by the inferior energy.