=The System of Identity.= Schelling published his _Transcendental Idealism_ in 1800. In the next year he published his _System of Identity_ in the hope of finding some common ground for his two preceding points of view. For Nature is not absolute, but is a limited objective Ego; and Mind is also not absolute, but is also limited, although subjective. The Self perceives the object as other than itself, and in subsequent reflection it sees the object as a form of its own deeper Self. Subject and object, mind and nature, are one in reality. The question then is, Does the absolute Self exist? Yes, but outside the conditions of existence and beyond all contradictions. It is itself the highest condition, the unconditioned condition. But what is the basis of these two antithetical aspects of life? The most suitable name that Schelling could give it was Identity or Indifference; for other names would imply conditions. In this attempt to construct an absolute Idealism, Schelling shows the influence of Spinoza. Identity reminds us of Spinoza’s substance,――a reality that is absolutely indifferent to both mental and nature phenomena, and yet is the reality of both. It is absolute reason undetermined in its content. It was this turning to Spinozism on the part of Schelling, that made Hegel break with him and call his Identity “the night, in which all cows are black.” Schelling even came so much under the influence of Spinoza as to imitate Spinoza’s form of presentation in the Ethics. But Schelling regarded the objective and subjective worlds not after the manner of Spinoza as independent of each other. On the contrary he looked upon every phenomenon as both ideal and real, and as having its logical place according to the degree in which the two elements are combined. Differences are what constitute phenomena; the Absolute is the Indifferent. Schelling illustrates this by the magnet, which is itself an indifference of opposite poles of varying intensity. In the nature series the objective factor predominates, and in the mental series the subjective factor. The universe is the most perfect work of art, the most perfect organism, and the best expression of God.