It seems like one of those ambiguous, mystical sayings that can never be really explained. That shouldn’t be explained, like a Zen koan or a joke that loses it’s power if you have to break down the punchline. But it isn’t. It’s actually a very practical observation.
Firstly, if you ask most people, “How do you breathe?”, they’ll tilt their head and look confused. That’s because most people don’t know how they breathe. They don’t even think about it. Me included. The only time I’m aware of how I’m breathing is (sometimes) when I meditate in the morning, and at odd times throughout the day. And most people certainly don’t know how they live: their words and actions aren’t a derivative of purpose, deliberate intention or principle. Literally, they don’t know how they breathe, and they have no awareness of how—or how they would like to—live.
Secondly, you could break the types of breathing down (loosely) into two camps. There is the shallow, short breaths that arise from the chest and shoulders. And there is the long, deep breaths that arise from the stomach and diaphragm. Most people, most of the time inhabit the first camp. Their breath comes short and sharp. It is fast, driven by emotion and impulse. And most people live in a similar way. Driven by their emotions and impulses. They live as they breathe; unthinkingly.
People in the second camp, those who breathe long and deep, are the ones whose actions and words originate from long and deep thought. They have reasons, principles, ethics, and it is these things, rather than reactive impulses and emotions, that drive their existence.
Exploring this brings an interesting insight to mind. If how you breathe truly is how you live, then you have two options for improving your life. You can either try to change your life—this is what most self-help gooroos advocate—by building habits, engineering your environment, monitoring your patterns of thought and information consumption and processing, that sort of thing. Or, you can work on your breathing. You can take some time to learn the different types of breath, and attempt to master the most fundamental action of existence: breathing.
Both work. But one is way, way easier than the other.