E.T.A. Hoffmann's stories are often self-conscious manipulations of the relationship between the projective unconscious world previously developed in the fairy-tale and the world of conscious everyday reality later developed in realistic fiction. Like Bertha in Tieck's tale, "Fair Eckbert," Nathanael in Hoffman's "The Sandman" is caught between the dual world of fantasy and reality. However, the difference is that whereas Bertha is the projection or objectification of Eckbert, Nathanael seems to exist in the "as if" real world, albeit as a "madman" disengaged from that real world. Hoffman makes this dichotomy between the world of everyday reality and the fantastic world of imagination, dream, and the art work much more explicit than does Tieck or Goethe.
"The Sandman," although still aligned with the marchen conventions of its predecessors, moves us closer to the realistic conventions of its heirs. The opening letters between Nathanael and Klara make the dichotomy clear. Nathanael becomes so convinced of the reality of the sandman (about which his mother has told him as a child to metaphorically signify the coming of sleep) that he does not accept the metaphoric explanation but must attach the sandman to a real person in the world, the old lawyer Coppelius, on whom he blames the death of his father.
Klara's letter to Nathanael expresses the common-sense explanation that all the terrible things Nathanael has described as events in the world have happened in his mind only, that "the outer world had very little part in them." The tension here is clearly between the poetic imagination of Nathanael and the prosaic imagination of Klara. Nathanael seems to transform himself and all those around him into characters of his own hallucinatory fiction in which he proclaims there is no freedom, that all are the playthings of dark and cruel powers against which they are powerless to rebel.
And in fact, Nathanael begins to compose stories in which Coppelius becomes the shadow that lies between him and his happiness with Klara. When he reads one of his stories to her, she cries, "Throw the mad, senseless, insane fairy tale into the fire," and he in turn calls her a "lifeless damned automaton" for not taking his tales as truth. The automaton motif is, of course, embodied later by the figure of Olympia; the irony of the reference to Klara as automaton is that whereas in terms of Nathanael's imaginary world, the real but prosaic Klara is lacking in life, the actual automaton Olympia is imbued with life by the power of his imagination.
Although Nathanael attributes a poetic imagination to Olympia, she is like the lifeless figure of a fiction somehow propelled into the context of the everyday world. The prosaic Siegmund says he finds Olympia uncanny, as if she "were only acting the part of a living being," much as a character in a fiction does. Nathanael notes that although Olympia only utters a few words, "those few words are true hieroglyphs that express the inner world filled with love and higher knowledge of the spiritual life as seen from the viewpoint of the world beyond." Olympia is thus made to represent the paradoxical nature of fictional character itself--not a human being, but acting the part of one and uttering words that may seem lifeless and meaningless to the prosaic world, but which are received by the poetic imagination as true reality.
The implication of a fictional figure living "as if" she were a real person in the world is carried to its absurd extreme by Hoffman in what becomes a self-reflexive parody of such an aesthetic conceit. When Olympia's imposture is discovered in the farcical scene of Professor Spallanzani and Coppelius fighting over the doll, Nathanael is taken to the madhouse, and the people are so disturbed at the pretense that they develop a horrible distrust of human figures and take many steps to assure themselves that their friends and loved ones are real; it is inevitable that a professor of poetry and rhetoric knows the truth of the matter--that the "whole thing is an allegory--an extended metaphor."
And indeed, the whole story is an extended metaphor for the basic nature of the art work itself, for Nathanael takes his inner fantasies to be external reality and projects them on to the external world, just as, in a reverse way, he responds to an artificial construct as if it were real. Nathanael's death is predetermined, for he has entered into the "madness" that underlies the art work--madness manifested as the ultimate metaphoric projection in which the only true life and reality is the life and reality of the imagination. However, the grotesque nature of the events and characters in the story conveys an ironic rather than a romantic acceptance of such an aesthetic notion of reality.
The advance of Hoffman's tale over that of Tieck lies precisely in this ironic tone, a tone that parodies the romantic view, for even as we lament the death of Nathanael, we realize that he has been sacrificed to the irony of the story. This ironic distancing created by the tone of the narrator, which transforms what is basically a romantic fairy tale into a gothic tragedy is a new element in the novella developed and expanded in the works of Poe, Hawthorne, and Melville. By presenting a romantic tale tempered by a distanced point of view, Hoffman makes the tone of the teller more important to the novella than ever before.
Later in the 19th-century development of short fiction, the supernatural is more emphatically rejected and the strangeness of life is seen to be solely a function of psychology. With the 19th-century romantics, the two separate worlds become united in such a way that the sacred is secularized and the profane is elevated to the divine. Moreover, the mechanism for this turning point increasingly becomes the self-conscious subjectivity of the story teller.