(1.) Schelling began his thought system by absorbing and championing the reigning philosophy of the day — to wit, the system of Kant as modified by Fichte. By Fichte the idealism of Kant was emphasized into exclusive validity. According to Fichte, there is no other reality than the absolute activity of the Ego. It is true, this activity of the Ego is conditioned by an object — the Not-me. But this Not-me cannot be derived from any reality exterior to the Ego; that is, from any thing per se. On the contrary, the Not-me, the external world of thought and observation, is really an unconscious creation of the Ego, which the Ego then subsequently raises to an object of conscious contemplation. But which is the absolute reality with Fichte, the Ego as unconscious or as conscious? If as unconscious, then God, the All, is unconscious; and the empirical consciousness of man is delusive and unreal, and is destined to vanish into unconsciousness. If as conscious, then God, the supreme reality, has no existence save in the transitional flux of vanishing, finite Egos: he is in eternal process of becoming and of passing away. Between these two consequences Fichte's system constantly oscillated, tending at the one pole to self-annihilation, and at the other to self-deification. The latter tendency prevailed more in his earlier, and the former in his later, life. It was as an enthusiast for this rigid idealism of Fichte that Schelling made his philosophical debut. With Fichte he denied self-consciousness and personality to the absolute being; and he insisted that for the idea of a divine revelation there can be no place, save in the mythological phraseology of the populace. The history of religions he regarded as only a “progressive, symbolical manifestation of the ideas of the absolute reason.” The philosophies and religions of the ancient world present in an imperfect and, as it were, unconscious form that which modern thought has developed in full consciousness of its own processes. Perhaps the chief feature in which Schelling differed from Fichte from the very outset was that he found a deeper significance in the different forms of religion than Fichte had done.
(2.) Schelling's second phase (1796-1800) sprang from his growing conviction that a mere subjective idealism could not do justice to the empirical objective world by which we are net on every hand. He did not mean by this to give up the results of his idealism; he only meant to reach the same results upon another path — to rediscover the reason of the subject in the objective reason of the world of nature. Thereby he introduced a new stadium into his philosophy: constructive or creative knowledge was put into the place of the previous critical knowledge. As previously the Ego had concentrated itself absolutely upon itself, so now this Ego, the subject, was to expand itself over the universe and find the laws of its own intuitions there reflected. Out of subjective idealism sprang, thus, an objective idealism. From the standpoint of this idealism the moral element loses its importance, and speculative knowledge is the one thing important. The intention of Schelling in his Philosophy of Nature was simply to complement the idealism of Fichte; but in reality it grew into a direct antithesis to it. With Fichte, nature was merely a means for the development of the subject. With Schelling, it was a manifestation — form of the absolute Ego, and had essence and significance in itself. Nature was spirit visible; spirit was nature invisible. This conception seemed strikingly new and important. It was hailed with very great enthusiasm. Nature was to Schelling a perpetual movement of self-balancing force. By the varied interaction of attraction and repulsion are produced the infinitely varied forms of organic life. Matter is balanced force. Nature, when rising above the antithesis of attraction and repulsion, becomes light. Light is, as it were, the soul, the thought of nature. Under the influence of light, matter evolves itself dynamically in the phenomena of magnetism, electricity, chemistry. The antithesis of crude matter and light is harmonized in the higher stage of organic life. Here light inheres in the objects; it is their vitality, their light. Matter becomes here a mere incident of the vitalizing principle. The stages of the dynamic process constitute the great divisions of organic life. The preponderance of objectivity or of subjectivity determines the characteristics of the three great kingdoms of organic nature — the vegetable, the animal, and the human or moral. Matter is the background upon which these three kingdoms stand out as higher stages of evolved being. Through it they stand related and are united into a unitary cosmos.
In his Philosophy of Nature Schelling thus traces the objective world in its ascent from the crudest objective stage to the highest subjective; that is, from matter to moral freedom (so far as the latter exists). But, not content with this, he now reverses the process. He starts from the highest point reached by natural philosophy — to wit, self-conscious man — and reconstructs the whole system of philosophy from a subjective standpoint. In this — his Transcendental Idealism — he traces, accordingly, the objective as rising from the subjective. He divides his subject matter here into the theoretical, the practical, and (that which unites the two) the artistic. In the theoretical part Schelling considers the various stadia of knowledge in their relation to the various stadia of matter. Matter is extinct mind. The acts and phases of self-consciousness are rediscoverable in the forces of nature and in the stages of their development. All the forces of the world are ultimately reducible to powers of ideal representation. Organization is necessary; for intelligence must view itself in its productive, successive transition from cause to effect. This it cannot do without making that succession permanent or representing it as at rest; and succession represented as at rest is organization. Intelligence is a never- ending effort at self-organization. Among the successive stages of organization there must be one which the subject is forced to regard as identical with himself. It is only through the fact that there are other intelligences than myself that the world is made objective to me. It is only through commerce with other individuals that I can come to the consciousness of my freedom. The intercommunication of rational individuals through the medium of the objective world is the condition of freedom. But whether all free beings shall, or shall not, confine their action within such limits as leave free play to the freedom of each other is not left to chance. but is safeguarded by the higher law of justice. Justice rules in the interests of freedom with all the inviolability of a law of nature. All attempts to supplant the reign of absolute justice by an arbitrary, artificial statute code have ever proved futile and abortive. The guarantee of a good constitution in each state must lie, in the last resort, in the subordination of all states to the common law of absolute righteousness. The gradual approach towards a realization of righteousness is the substance of history. History, as a whole, is a progressive realization and manifestation of the Absolute. It is only through history as a whole that the full proof of God's existence can become manifest. All single intelligences may be regarded as integrant parts of (God or the moral order of the world. This divine order will fully exist as soon as individual intelligences establish it. Towards this consummation history is constantly advancing in consequence of a preestablished harmony between the objective necessary and the subjective free. This harmony is conceivable only on the supposition of the existence of a higher element, superior to both, as being the ground of the identity of the absolutely subjective and the absolutely objective, the conscious and the unconscious, whose original separation took place simply in order to the phenomenal manifestation of free action. If the phenomenal manifestation of freedom is necessarily unending, then history itself is a never completed revelation of the Absolute, which disrupts itself, in view of this manifestation, into the conscious and the unconscious; but which is, in the inaccessible light in which it dwells, the eternal identity of both and the eternal ground of their harmony. To this higher element of identity no predicates can be given. Hence it cannot be an object of knowledge, but only of practical postulation — that is, of faith or religion. If we turn our attention exclusively to the orderliness of the objective world, we fall into a system of fatalism. If, on the contrary, we regard only the subjective, we land in irreligion or anarchy. But if we rise to the thought of that higher identity of both we attain to a system of providence — that is, of religion in the true sense of the word. It is true, Schelling leaves here untouched the very pertinent question how this higher Absolute to which no predicates can be assigned can be described as provident. How he would have met the question we leave undecided.
The transcendental idealism of Schelling had grown under his hands into a complete system of philosophy. It was therefore not only coordinate with his philosophy of nature, but also superordinate. But with this twofold presentation of his system from the two poles of the finite (Nature and the Ego) Schelling was not satisfied. He now felt that what he had found as the goal of his highest previous effort — to wit, the principle of absolute identity — should be laid as the beginning at the foundation. This brings us to the third stage of his philosophizing.
(3.) The epoch of his System of Identity. In this system everything is derived from the absolute reason, taken in the sense of the absolute identity of subject and object. The highest law of this principle is its identity with itself (A = A). It is absolutely infinite and one. Whatever is, is this absolute itself. Single finite things exist only in reflection. As this absolute identity is everything, it is at the same time the totality of everything. It is not the source or the cause of everything, but it is itself everything. In his conception of this absolute identity, Schelling seems to involve himself in a shadow of self contradiction. He makes it, on the one hand, an absolute indifference; as such it is purely negative, and hence cannot be made the basis of a positive universe. On the other hand, he makes it the identify of everything — that is, he makes it the most positive of all things. In this absolute identity, Schelling distinguishes essence and form. In respect to form. it is an infinite self knowing; it can know itself, however, only as subject and object. But as this subject and object spring from identity, their only difference must be quantitative, not qualitative; that is, the absolute identity can differentiate and posit itself under a preponderance of the subjective or of the objective, but not under a form from which one of the elements is entirely absent. Any equation that can be contrasted with A = A must be simply equivalent to A = B. The whole conception may therefore be expressed under the form of an unending magnetic line with one indifference point and two poles, at the one of which A preponderates, and at the other B, thus: