Monism (“Oneness”) is basically a positive outlook on life, because it is aditi – unifying – and therefore results in peace and love. Dualism (“Twoness”) is basically a negative outlook, because it is diti – dividing – and therefore results in competition and violence. What is surprising, though, is that either outlook is very destructive if taken to its extreme and divorced from the other.
Since the late 19th Century (thanks mainly to Swāmī Vivekananda’s speech at the Parliament of World Religions) when people think of “Indian Philosophy” they actually think, nine times out of ten, of the advaita-vāda of Śankara-ācārya, which ironically is India’s foremost example of Radical Monism taken to its utmost extreme. And so, I’m sure you’ve noticed, when anyone caricatures Indian philosophy they almost always say, “It’s all one. It’s all illusion.”
This school of thought arose out of necessity a few thousand years ago as a successful attempt to tackle the illogical riddles of Buddhism – itself an even more radical form of Monism that reduced “oneness” to “zeroness” in its all-devouring nihilism. Indeed, it was an extremely effective way to transition India from nihilistic Buddhism back to her Vedic roots, precisely because its really not that much different from Buddhism.
Pure monism is practically the same thing as nihilism because when everything becomes one, there ceases to be any subject or object. The experiencer and the experienced dissolve into experience itself, and cease to be. It’s better than nihilism because at least there’s something – “experience itself” – but without anyone to use it or anything to use it on; completely latent and indistinct, like a perfect, eternal, absolutely deep sleep.
At the other end of the spectrum is dualism. No one really follows it in its pure form, but 90% of the world knowingly or unknowingly follow it because materialism both modern and ancient (for example, the Cārvaka school of thought in ancient India) are the leading exponents of Radical Dualism. Interestingly, the Yoga Darśan also has a dualistic foundation, in which spirit (puruṣa) is categorically different from matter (prakṛti). But this is not pure dualism, for they both have a common root.
The problem with dualism is that it isolates things from one another. Pure dualism = absolute isolation. An isolated experiencer is unable to truly experience anything. The more different you are from something, the less deeply you can experience and understand it. So if things are completely different from one another, with no common root at all, it become impossible to experience anything at all.
Real Vedānta, then must be neither pure monism nor pure dualism, because neither of the two amount to a truly beautiful concept of life. This is why the great ācāryas since Madhva have explained Vedānta as a school which fuses monism and dualism by seeing diversity within unity. It sees God and Self as a unit of oneness, but with distinct parts within that unit – like the sun and sunshine.