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The construction of sexual identity is far from straightforward, as Freud has already pointed out:
observation shows that in human beings pure masculinity or femininity is not to be found either in a psychological or a biological sense. Every individual on the contrary displays a mixture of the character-traits belonging to his own and to the opposite sex; and he shows a combination of activity and passivity whether or not these last character-traits tally with his biological ones.
The construction of sexual identity can only however be understood within the more general context of the construction of identity. As McDougall put it: “The inherent difficulty facing the infant in his task of becoming an individual is of a more global, more ‘psychosomatic’ nature than the problems encountered in coming to terms with sexual realities” (McDougall, 1974, p. 436).
Psychoanalytically speaking, the individual is fundamentally divided, whether it is between conscious and unconscious, between id, ego and super-ego, between internal objects and conflicting identifications, between true and false self. “The poor ego,” writes Freud, “serves three severe masters and does what it can to bring their claims and demands into harmony with one another” (Freud, 1933, p. 77).
Psychoanalysis addresses the more pathological ways in which the attempt at harmony is established, and is concerned with limiting the disharmony by increasing knowledge and, in Freud's terminology, modifying the ‘economy’. Insofar as, from a psychoanalytic perspective, the individual is fundamentally split and misrepresenting himself due to processes of repression, denial, disavowal and projection, the notion of identity itself can fall outside the domain of psychoanalysis and, indeed, has no meta-psychological status. Identity has some connections with other more specifically psychoanalytic notions such as identific