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What exactly is meant by transcendential idealism? Is it simply the idea that we can't possibly observe things-in-themselves directly (like idealism), so (unlike idealism) we know they exist, but not what they exist as?

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What exactly is meant by transcendential idealism?

Transcendental idealism, or critical idealism as Kant preferred to call it, is the view that our experience can only give us representations of things (i.e. how they appear to us; this is referred to as phenomenon), and that we can never know how these things are in themselves (this is what he referred to as noumenon or ding-an-sich). This does not mean that there is no real, objective world; it just means that this objective world is beyond the categories of human reason. We cannot know these things-in-themselves, only that they must exist in order to form the representations that we can experience.

Is it simply the idea that we can't possibly observe things-in-themselves directly (like idealism), so (unlike idealism) we know they exist, but not what they exist as?

This seems accurate, although I would say that idealism, without any further specification, does not mean anything more than the view that our thoughts make up fundamental reality. "The idea that we can't possibly observe things-in-themselves directly" is something Kant introduced; not all idealists make this distinction between things-in-themselves and things as they appear to us.

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+1, though I think the sentence "This does not necessarily mean that there is no real, objective world" is misleading - it's actually impossible, with Kant, that there's no real objective world, for we must be affected by something, as you point out the very next sentence. –  iphigenie Jan 29 '13 at 12:23
    
@iphigenie You're right. I removed the word 'necessarily' (I think that's were the confusion could come from) to make the answer more clear. –  Ben Jan 29 '13 at 12:27

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