Invorschule der Ästhetik (School for Aesthetics, 1804), Jean Paul also observes that in the mind of a genius the inner world frequently swallows up the external one. He then adds that there is a higher reflectiveness that divides that inner world into two parts: a self and its realm, or the creator and his world. While such statements are intended to describe the inner lives of Romantic geniuses, they are also indicative of an overall understanding of the life of the mind as it was discussed among the German Romantics. In Romantic literature and thought, the space of the imagination is said to encompass an entire universe unto itself, one that is then subdivided into what is proper to the self (the subject) and an imagined realm of objects that exists within the subject's purview. The Romantics placed all the responsibility for this division squarely within the mind of the perceiving self. An act of the mind was said to determine the difference between the individual and the objects that constituted his or her world. In philosophy as well as in the arts we find two related versions of this same single account. For idealists such as J. G. Fichte, who inspired much Romantic writing, the self and its realm are the subject and its objects, which he names the Ich (hereafter the ego) and the Nicht-Ich (hereafter the non-ego), respectively. For Romantic poets and artists, the subjective world is divided into the creator and the world that he or she creates.

Because so much activity takes place within the mind of the perceiving subject, the Romantic depiction of perception is little different from an understanding of what transpires when we dream. In this way, perception of the outside world is merely a convenient though necessary illusion. Our mind does us the favor of providing us with the impression that there is an outside world. Seen from this perspective, idealism and Romanticism are moments in the history of ideas that are directly connected to later moments, such as those from which psychoanalysis and even expressionism emerged, insofar as both schools of thought concerned themselves with the inevitability of the conscious or unconscious imposition of subjective will upon the world.