Novalis's personal worldview—informed by his education, philosophy, professional knowledge, and pietistic background—has become known as magical idealism, a name derived from Novalis's reference in his 1798 notebooks to a type of literary prophet, the magischer Idealist (magical idealist).[52] In this worldview, philosophy and poetry are united.[25] Magical idealism is Novalis's synthesis of the German idealism of Fichte and Schelling with the creative imagination.[53] The goal of the creative imagination is to break down the barriers between language and world, as well as the subject and object.[52] The magic is the enlivening of nature as it responds to our will.[25]

Another element of Novalis's magical idealism is his concept of love. In Novalis's view, love is a sense of relationship and sympathy between all beings in the world,[53] which is considered both the basis of magic and its goal.[25] From one perspective, Novalis's emphasis on the term magic represents a challenge to what he perceived as the disenchantment that came with modern rationalistic thinking.[54]: 88  From another perspective, however, Novalis's use of magic and love in his writing is a performative act that enacts a key aspect of his philosophical and literary goals. These words are meant to startle readers into attentiveness, making them aware of his use of the arts, particularly poetry with its metaphor and symbolism, to explore and unify various understandings of nature in his all-embracing investigations.[55]

Magical idealism also addresses the idea of health.[53] Novalis derived his theory of health from the Scottish physician John Brown's system of medicine, which sees illness as a mismatch between sensory stimulation and internal state.[56] Novalis extends this idea by suggesting that illness arises from a disharmony between the self and the world of nature.[53] This understanding of health is immanent: the "magic" is not otherworldly, it is based on the body and mind's relationship to the environment.[57] According to Novalis, health is maintained when we use our bodies as means to sensitively perceive the world rather than to control the world: the ideal is where the individual and the world interplay harmoniously.[33] It has been argued that there is an anxiety in Novalis's sense of magical idealism that denies actual touch, which leads inevitably to death, and replaces it with an idea of "distant touch".[58]