[Epistemic status: Sharing current impressions in a quick, simplified way in case others have details to add or have a more illuminating account. Medium-confidence that this is one of the most important parts of the story.]
Here's my current sense of how we ended up in this weird world where:
- I still intermittently run into people who claim that there's no such thing as reality or truth;
- a lot of 20th-century psychologists made a habit of saying things like 'minds don't exist, only behaviors';
- a lot of 20th-century physicists made a habit of saying things like 'quarks don't exist, only minds';
- there's a big academic split between continental thinkers saying (or being rounded off to saying) some variant of "everything is culture / perception / discourse / power" and Anglophone thinkers saying (or being rounded off to saying) "no".
1. The ancient Greeks wrote down a whole lot of arguments. In many cases, we're missing enough textual fragments or context that we don't really know why they were arguing — what exact propositions were in dispute, or what the stakes were.
2. In any case, most of this is screened off by the fact that Europe's memetic winners were Christianity plus normal unphilosophical beliefs like "the sky is, in fact, blue".
3. Then, in 1521, the Protestant Reformation began.
4. In 1562, the Catholics found a giant list of arguments against everything by the minor Greek skeptic Sextus Empiricus, got very excited, and immediately weaponized them to show that the Protestant arguments fail (because all arguments fail).
5. These soon spread and became a sensation, and not just for being a useful superweapon. Plenty of intellectuals were earnest humanists used to taking arguments at face value, and found Sextus' arguments genuinely upsetting and fascinating.
I trace continental thinkers' "everything is subjective/relative" arguments back to a single 1710 error in George Berkeley:
[...] I am content to put the whole upon this Issue; if you can but conceive it possible for one extended moveable Substance, or in general, for any one Idea or any thing like an Idea, to exist otherwise than in a Mind perceiving it, I shall readily give up the Cause[....]
But say you, surely there is nothing easier than to imagine Trees, for instance, in a Park, or Books existing in a Closet, and no Body by to perceive them. I answer, you may so, there is no difficulty in it: But what is all this, I beseech you, more than framing in your Mind certain Ideas which you call Books and Trees, and the same time omitting to frame the Idea of any one that may perceive them? But do not you your self perceive or think of them all the while? This therefore is nothing to the purpose: It only shews you have the Power of imagining or forming Ideas in your Mind; but it doth not shew that you can conceive it possible, the Objects of your Thought may exist without the Mind: To make out this, it is necessary that you conceive them existing unconceived or unthought of, which is a manifest Repugnancy.
If I can imagine a tree that exists outside of any mind, then I can imagine a tree that is not being imagined. But "an imagined X that is not being imagined" is a contradiction. Therefore everything I can imagine or conceive of must be a mental object.
Berkeley ran with this argument to claim that there could be no unexperienced objects, therefore everything must exist in some mind — if nothing else, the mind of God.
The error here is mixing up what falls inside vs. outside of quotation marks. "I'm conceiving of a not-conceivable object" is a formal contradiction, but "I'm conceiving of the concept 'a not-conceivable object'" isn't, and human brains and natural language make it easy to mix up levels like those.
(I can immediately think of another major milestone in the history of European thought, Anselm's ontological argument for God, that shows the same brain bug.)
Berkeley's view was able to find fertile soil in an environment rife with non-naturalism, skeptical arguments, and competition between epistemic criteria and authorities. Via Kant and Kant's successors (Hegel chief among them), he successfully convinced the main current of 19th-century European philosophy to treat the idea of a "mind-independent world" as something ineffable or mysterious, and to treat experiences or perspectives as fundamental.
(Edit: G.E. Moore seems to think that everyone in the 19th century was making an error along these lines, but I now suspect Kant himself wasn't making this mistake; I think his main error was trying too hard to defeat skepticism.
I also don't think Berkeley's writing would have been sufficient to confuse Europe on its own; it's too lucid and well-articulated. The transition to Kantian and Hegelian versions of these arguments is important because they were much more elaborate and poorly expressed, requiring a lot of intellectual effort in order to spot the inconsistencies.)
My unscholarly surface impression of the turn of the 20th century is that these memes ("the territory is fundamentally mysterious" and "maps are sort of magical and cosmically important") allowed a lot of mysticism and weird metaphysics to creep into intellectual life, but that ideas like those are actually hard to justify in dry academic prose, such that the more memetically fit descendants of idealism in the 20th century ended up being quietist ("let's just run experiments and not talk about all this weird 'world' stuff") or instrumentalist / phenomenalist / skeptic / relativist ("you can't know 'world' stuff, so let's retreat to just discussing impressions; and maybe you can't even know those, so really what's left is power struggles").
Today, the pendulum has long since swung back again in most areas of intellectual life, perhaps because we've more solidly settled around our new central authority (science) and the threats to centralized epistemic authority (religious and philosophical controversy) are more distant memories. Metaphysics and weird arguments are fashionable again in analytic philosophy; behaviorism is long-dead in psychology; and quietism, non-realism, and non-naturalism at least no longer dominate the discussion in QM, though a lot of Copenhagen slogans remain popular.
The above is a very simple picture featuring uneven scholarship, and history tends to be messier than all that. (Ideas get independently rediscovered, movements go one step forward only to retreat two steps back, etc.) Also, I'm not claiming that everyone endorsed the master argument as stated, just that the master argument happened to shift intellectual fashions in this direction in a durable way.