The Serapion Brethren. – Vol. II by E. T. A. Hoffmann
In a multi-volume work titled The Serapion Brethren, friends gather at a pub to share drinks and tales in a narrative frame. Hoffmann also mentions an eccentric recluse by the name of Serapion, who created the Serapion principle, an eidetic notion of art, in that context. He maintained that whatever you see in your mind must be as real as reality or, if possible, more real than the fact if an artist is to devote himself to his writing.
The Serapion Brethren. - Vol. II by E. T. A. Hoffmann
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His fairy stories frequently begin in a very factual or realistic environment before luring you into an imagined world that is incredibly complex since it touches on a variety of issues, such as insanity or the politics of his day. He wrote during the Holy Alliance, which lasted from 1815 to 1825 and was a rather reactionary time. He challenged the archconservatives in Prussia, and in one of his final pieces, Master Flea, he subtly criticizes the Berlin police chief.
Because he held that there was no God and suggested that we are all creators of our own lives and that many of the myths about God are fairy tales, I believe he also laid the foundation for existentialism.