A new world, material without being real, where poor ghosts, breathing dreams like air, drifted fortuitously about...
A bit of wordplay here: in many ways, the “new world” Gatsby finds himself in after the collapse of his dream mirrors the situation of the “New World,” i.e., America. (“New World” may also suggest the New Wealth, or those like Gatsby who have newly attained their riches.) The “frightening” vision Nick gives us here—imaginatively, through Gatsby’s eyes—is something like a glimpse of American reality laid bare.
“Material without being real” describes Gatsby’s world’s obsession with wealth, without any concern for what really matters, i.e. love and human relationships. Gatsby’s loss of Daisy has caused his final disillusionment, forcing him to realize that his dream of being a wealthy society man will not lead to happiness. The “ghosts” are merely men like him, chasing the American Dream and being consumed by it until they are shadows of themselves. They are “poor” because their search for happiness in a society that worships materialism can only lead to emotional poverty.
To help improve the meaning of these lyrics, visit “The Great Gatsby (Chapter VIII)” by F. Scott Fitzgerald and leave a comment on the lyrics box