There is no epistemological chasm between reality and knowledge. The space is filled with ideas and sensations. The universe is made of relationships as much defined by experience, and therefore subject to debate, as their constituent parts.
Adding context to experiences--for example, realizing the identity of someone seen--gives knowledge. Knowledge is having an idea that resembles and impacts reality. Solipsistically copying the universe in our minds, such as knowing the number of hairs on a head, achieves no purpose. "All that the pragmatic method implies, then, is that truths should have practical consequences." Scientific laws are a "human device" and "true so far as they are useful." James wrote, "'The true' is only the expedient in the way of our thinking, just as the right is only the expedient in the way of our behaving."
"Truth" means connection or relation to "terminal experiences," the "linchpins of all reality." The linchpins themselves are not "true." We think we have knowledge when our propositions are consistent (often achieved by leaving out contradictory or unknown facts). Pragmatism, a method of thinking and behaving, is not necessarily a call to action because ideas can be said to "work" with other ideas.
Broadly applied, pragmatism can be called humanism, which holds that an experience is "true" if it minimizes contradiction and yields satisfactory results with related experiences. You know a building's location if you can lead someone there. Truth is the event of verification; a belief isn't true until proven. Therefore, "experience and reality come to the same thing." The knower and the known are both parts of experience; "experience as a whole is self-containing and leans on nothing."
In contrast to pragmatism, "absolutism" or "transcendentalism" maintains that certain propositions are true regardless of any useful consequences to believing them. However, James notes, the only "cash-value" of a transcendent reality is whether there are practical results to knowing it. "The transcendentalist believes his ideas to be self-transcendent only because he finds that in fact they do bear fruits. Why need he quarrel with an account of knowledge that insists on naming this effect?" Pragmatism fleshes out a definition of truth that absolutism phrases only in the abstract. "We offer them the full quart-pot, and they cry for the empty quart capacity." The view that "concrete workings" are irrelevant to truth is "the renunciation of all articulate theory."
Pragmatism is inaccurately accused of holding that anything is true if one thinks it true at the present moment. Rather, pragmatism emphasizes the context in which idea and object relate. Another objection is that the pragmatist thesis is not itself meant to be pragmatically understood. James responds that it is indeed; an idea is true if it is satisfactory, and the pragmatic thesis is "ultra-satisfactory" to pragmatists.
William James. The Meaning of Truth: A Sequel to "Pragmatism." New York: Greenwood Press, 1968. (Originally 1909.)
This summary was written in 2005, along with a series of other 500-word summaries of philosophy books, as an exercise in brevity.