Vaihinger provides here, I think, the clearest exposition of the thread that runs from the medieval nominalists, through Hume, Kant, and ultimately, Nietzsche. He shows how each of these thinkers contributes to the emergence of "the philosophy of as-if," which is a mode of philosophizing that seeks to face squarely the epistemic implications that emerge from the pervasiveness of illusion in human life. In this view, the fullest lucidity we can have access to as embodied existents is the lucidity to be found when we peer through the pervasive veneer of illusion that shrouds our lives, and gain thereby a liberating detachment from these by seeing them for the first time for what they really are, i.e., fictional constructs.
He argues, via a comparative historical analysis that is focused through the prism of his own synoptic interpretation, that these thinkers taken together show us how knowledge itself is best understood as an edifice of fictional constructs built atop the "optical illusions" and "aesthetic anthropomorpshisms" (as Nietzsche called them, in Beyond Good and Evil) created by our organismic embodiment in the world. In this view, the clearest view we can attain of the real is the negative, self-reflexive view afforded us when we see our organismic illusions for what they are. Reading back from Nietzsche, Vaihinger casts a new light on the true epistemic function, for organismic existents, of the laws of nature, of causality, of the lines, points, and of axioms of the mathematician, of the independent substances inevitably postulated by the logician, and of the very principle of parsimony posited by Occam as the regulative principle of science.
In a way, he shows how Nietzsche (following Kant's re-interpretation of the foundational concepts of ontology in terms of the perspective of the human subject) more seriously takes into account the epistemic implications of the purely organismic grounding of knowledge than do most optimistic, positivistically-inclined evolutionary epistemologists: namely, the fact that knowledge serves survival and organismic thriving, not the exigencies of objective truth. Knowledge is the means whereby we construct a human, cognizable, systematizable world atop the intractable otherness of the real world.
The "philosophy as-if" suspends belief in the foundational faith of any rational epistemology, namely, the belief that the pattern of the mind is adequate to grasp the pattern of the world, that the human part can grasp the form of the universal whole. Once you suspend this foundational act of faith and take a very clear look at the nature of the knowledge situation, as well as the human drives that power it, Vaihinger persuasively argues, "the philosophy of as-if" is what is left to our honest perusal.
Among many other things, he shows that, in order to rightly understand any of these thinkers, we must understand them as tributaries that flow into and contribute to the unfolding of this larger pattern of philosophizing. This, he argues persuasively, is especially true in the case of Kant and Nietzsche, neither of which you can understand unless you place them in relation to each other on this larger map of philosophical positions that converge around "the philosophy of as-if," which he also calls "fictionalism," or the view that whatever else our knowledge-constructs may happen to be, what we can most surely say about them, from the vantage point which we, in fact, occupy, is that they are postulates grounded solely in our organismic striving to progressively extend the pattern set by our organismic requirements by re-creating the world in a human form. Following Nietzsche, Vaihinger ruefully notes that we do not seek to know the world in itself; this is the foremost illusion of pre-critical epistemologies. Rather, we seek to know a world fully colonized by our own human reflection, a world rendered a home for the human spirit, a world that is no longer an inscrutable, alien other. Ultimately, all postulates that ground and direct the process of knowledge-acquisition spring from organismic values, from our striving to humanize the world and bring it into a humanly graspable and relatable form.
I cannot help but admire the way that he shows that Nietzsche takes up the Kantian critique of the instrument of all knowing, reason, only to radicalize it by showing that all our ontology, which is used, among other things, to ground our various disciplines (including those of science), is really a subset of aesthetics and axiology. It takes guts to take the critique of knowledge to such terrifying lengths. One wonders how sustainable this stance is in practice. "Animal faith" is a welcome anesthetizing antidote to such lucidity; it carries us ever on with the hope that through the mirage of the construct, we're establishing a real, substantive relation to the world in itself.
Ultimately, this thread in philosophy redefines wisdom as the insight born of our progressive detachment from our most nourishing illusions. We must not bank on finding a basis for any positive theoretical postulates once the process has run its course, for precisely the reasons that Kant offered in his first Critique. In this, Vaihinger's method seems to be a philosophical adaptation of the spiritual via negativa: all we can say is what the real is not. It is not precisely everything that we are. This is because we cannot assume that we are in any way "the measure of all things." As Vaihinger concludes though, one is still left with the question of how it is precisely that we stand in relation to the world. All depends on making the perhaps pre-theoretical decision as to whether we find the world as essentially being friend or foe to our human strivings for our progressive organismic realization.
Vaihinger's is an important history to tell because, I find, this particular side of our philosophical tradition is not often enough appreciated in the neo-positivist and happy-go-lucky (because unreflective) intellectual climate of today. His is a sobering, chilling look, but one that brings the beauty of clarity. And it's not "just" a re-telling of one under-remembered side of the history of philosophy, which holds a mere theoretical interest. I think the view of human life that emerges here, from this closer look at all our illusions about knowledge, is deeply poignant and transformative, if you let it sink in. Perhaps, if you expunge all faith and wishful thinking from epistemology, something like Vainhiger's view is what is left.