It seems obvious that thought cannot conjure up appearances out of thin air. Yet many people assume that the mind generates the appearances of the world we are conscious of. Examples of optical illusions and dreams are given to back this assumption up. I dream I am flying, but in reality, I am lying in my bed. I think I am seeing movement, but in reality it is a succession of still images rapidly flashing before my eye on the TV screen. So from such examples it is concluded that the human mind generates reality for itself without the corresponding sense inputs necessarily conveying any reality at all.
In response to such ideas about perception and the mind, one has to be very clear to avoid getting tangled in a web of abstraction. For example, whether an appearance, that is, whether a particular "percept" is the content of a dream or whether it is something revealed in waking consciousness cannot be established based only on whether it originates from sense-inputs, for these are not sufficient for producing any percepts (if they were there would be no hard problem of consciousness). In reality, only a thinking contemplation will reveal what a particular percept is and what its origin is. Only thinking can render the true reality of a percept. But my own act of thinking cannot generate a percept, far less can it declare that all percepts are the product of my subjective mind. Whether a percept corresponds to the objective world, or whether it is the product of mere fancy can only be established by a thoughtful contemplation of that particular percept.
Thought is thus inescapable at all levels of reality, and it transcends the subject/object duality. It follows that thinking can no longer be imagined as just being in our own heads - for when we look at the very fabric of the world, in any field of study, there we find thinking too.
This is a brief outline of one of the central observations Rudolf Steiner makes on the subject of thinking in his book The Philosophy of Freedom