Transcendental idealism is a philosophical system founded by German philosopher Immanuel Kant in the 18th century. Kant's epistemological program is found throughout his Critique of Pure Reason (1781). By transcendental (a term that deserves special clarification) Kant means that his philosophical approach to knowledge transcends mere consideration of sensory evidence and requires an understanding of the mind's innate modes of processing that sensory evidence.
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In the "Transcendental Aesthetic" section of the Critique of Pure Reason, Kant outlines how space and time are pure forms of human intuition contributed by our own faculty of sensibility. Space and time do not have an existence "outside" of us, but are the "subjective" forms of our sensibility and hence the necessary a priori conditions under which the objects we encounter in our experience can appear to us at all. Kant describes time and space as "empirically real" but transcendentally ideal.
Kant argues that the conscious subject cognizes the objects of experience not as they are in themselves, but only the way they appear to us under the conditions of our sensibility. Thus Kant's doctrine restricts the scope of our cognition to appearances given to our sensibility and denies that we can possess cognition of things as they are in themselves, i.e. things as they are independently of how we experience them through our cognitive faculties.