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In the context of American thinking, the transcendentalism refers to the movement that flourished in New England, primarily Massachusetts, in the quarter century before the American Civil War. It never generated a definitive canon of beliefs, but a good explanation can be found in the pamphlet written by Charles Mayo Ellis, An Essay on Transcendentalism, which appeared in 1842:

Transcendentalism ... maintains that man has ideas, that come not through the five senses, or the powers of reason; but are either the result of direct revelation from God, his immediate inspiration, or his immanent presence in the spiritual world.

Transcendentalism was in part a reaction to the teachings of Unitarianism, which was widespread among New England intellectuals in the first decades of the nineteenth century, and which held that the only knowledge that was valid was knowledge that could be demonstrated to the sense. Reacting to this "cold intellectualism," a number of thinkers, including a fair representation from the Unitarian ministry, looked for inspiration to the teachings of Immanuel Kant and the German transcendentalists of the previous century.

To this intellectual core, the American transcendentalists added inspiration drawn from such diverse sources as the Hindu Bhagavad Gita and the sayings of Confucius.

Two of the best known transcendentalists were Ralph Waldo Emerson and Henry David Thoreau. On the occasion of Harvard's bicentennial festivities, Emerson and some of his fellow Harvard alumni began conversations, which eventually turned into regular gatherings that became known as the Hedge Club. Others, noting their frequent use of Kantian phrases, began to describe them as transcendentalists, not entirely as a compliment.

From 1840 to 1842, Margaret Fuller edited their periodical, The Dial, which resulted in 16 issues that set out the thinking of many members of the movement. Although it never exceeded a circulation of 1000, it exerted an influence beyond its size.

Although philosophically committed to the idea that reform originates within individuals, transcendentalists became engaged in various social reforms, including one of the best known of the utopian experiments, Brook-Farm. Located not far from Boston, it was frequented by the leading transcendentalist leaders during the period of its existence, 1841 to 1847.

Theodore Parker was a prominent Transcendentalist minister. In 1849, in an address to a teachers' institute in Syracuse, New York, he critiqued the moral position of the mainstream churches of his day:

The Churches have the same faults as the State. There is the same postponement of justice and preference of force, the same neglect of the law of God in their zeal for the statutes of men; the same crouching to dollars or to numbers. However, in the churches these faults appear negatively, rather than as an affirmation. The worldliness of the church is not open, self-conscious and avowed; it is not, as a general thing, that human injustice is openly defended, but rather justice goes by default. But if the churches do not positively support and teach injustice, as the state certainly does, they do not teach the opposite, and, so far as that goes, are allies of the state in its evil influence.

The fact that the churches, as such, did not oppose the war, and do not oppose slavery, its continuance, or its extension; nay, that they are often found its apologists and defenders, seldom its opponents; that they not only pervert the sacred books of the Christians to its defence, but wrest the doctrines of Christianity to justify it; the fact that they cannot, certainly do not, correct the particularism of the political parties, the love of wealth in one, of mere majorities in the other; that they know no patriotism not bounded by their country, none coextensive with mankind; that they cannot resist the vice of party spirit—these are real proofs that the church is but the ally of the state in this evil influence.

Although a major factor in American intellectual life until the Civil War, transcendentalism went into decline with the death of Thoreau, the retirement of Emerson, and the rise of materialism. A couple of minor attempts at revival took place in the postwar period, but they soon were dissipated.

Many political leaders around the world have attributed some degree of inspiration to the works of the transcendentalists, especially Thoreau. The originators of the British Labour Party, Mahatma Gandhi, and Martin Luther King Jr. all traced some of their philosophy to the transcendentalists.

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