Iqbal was confronted with the dominating influence of the philosophy of Pantheistic Idealism that was exercising the minds of both the West and East, in some form or other, from the time of Plato. The western philosophers held that the Absolute Idea is the only reality. The inevitable corollary of this view is that man is also unreal and that he disappears into nothingness as soon as he dies.

The independent existence or immortality of the Soul was thus denied. In the East the Hindu and Buddhist philosophies also held identical views on human life and the world. Self-annihilation or absorption into God was their motto. A section of Muslim spiritualist caught in the grip of Sufistic Pantheism, called "Wahdatul-Wujud" which, too, denied individuality of the Soul and maintained the absorption unto God was the ultimate end of human life. It encouraged men to run away from the battle of life and evoked in them a spirit of passivity and other-worldliness. The recognition of ego was nowhere to be found.

Iqbal assailed these soul-killing doctrines and propounded a new philosophy. He said: God is not a mere "Idea", He is a living personality; a man is not a mere emanation from God, he has an independent identity; and this world is not an illusion, it has also a reality. Of course, this world, he said, is not the only reality; beyond this phenomenal world there is another world-the world of transcendent reality, which, no doubt, corresponds to physical reality. In short Iqbal assigned the right place to man vis-a-vis God and Universe and exalted his status and position by emphasizing his independent entity and the immortality of the human soul. He further said that the ego or Self, far from. Being a mere illusion, is the center of all reality because to know one's self is to know God and the Universe.

"I-am-ness" is thus the keynote of Iqbal's philosophy. He says: "Though alone art the Reality, All the rest is a mirage."

Again he says: "Only that truly exists which can say 'I am'. It is the degree of intuition of 'I-am-ness' that determines the place of a thing in the sale of being."

But Iqbal independence of the Ego does not mean any separation or revolt from God. He recognizes God as the Creator and Sustainer of the Universe and admits that He is the Ultimate Reality; but at the same time he proclaims the immorality of the Soul. This gives a permanent value to human life and provides an incentive to work for the progress and development of the world. In this connection Iqbal says that the ego has tremendous powers and potentialities and, if properly strengthened and developed, it can attain the exalted position of the Vicegerent of God. The ego can achieve the power and strength through vital communion with God as He is the supreme source of all life and strength. But this communion with God must not be misconstrued as absorption unto Him. Man must communicate with God; rather he must absorb God unto himself. Says Iqbal:
"Abandon thyself and flee to God
Being strengthened by God,
Return to thyself".