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In his 1927 paper on the etiology and structure of fetishism, Freud proclaimed, “Probably no male human being is spared the horror of castration at the sight of the female genitals” (154). Freud was employing this idea about “the horror of castration” to advance an argument he was having with Otto Rank. “An investigation of fetishism is strongly recommended to anyone who still doubts the existence of the castration complex or who can still believe that fright at the sight of the female genital has some other ground—for instance, that it is derived from a supposed recollection of the trauma of birth” (155).
Freud's fetishism paper is itself a fetishistic document. The psychoanalytic literature on the differences between the sexes is haunted by male fantasies about the female genitals, the very fantasies of female genital absence and mutilation that Freud brings to light in his fetishism paper. Unfortunately Freud never made entirely clear whether these fantasies were fantasies or whether they represented the reality of the female genitals as essentially mutilated, castrated and “absent.” More often than not, Freud would insist, that females suffered from “a castration that had been carried out” (1927, 257). “We can hardly speak with propriety of castration anxiety where castration has already taken place” (1926, 123). From this fundamental confusion of fantasy and actuality, came the next intractable psychoanalytic assumption—that penis envy must be the female equivalent of male castration anxiety.
As Freud was adumbrating the structural theory, he was constantly running into the vexing dilemma of female castration anxiety. For example, in Inhibitions, Symptoms and Anxiety,