This article attempts to invalidate the arguments that have been used to dismiss the concept of psychic energy. The author reviews the scientific and philosophic developments that influenced Freud. Although Freud's concepts were a natural outgrowth of "vitalism" and "naturphilosophie," this does not in any way invalidate his theories. The paradigm of a physicalistic physiology that included the universal principle of energy conservation had a marked influence on Freud's thinking. Goethe's influence on Freud is also discussed. Freud's views regarding psychic energy did not have an empirical origin as is so often claimed. To compare the concept of physical energy today with psychic energy is a fallacious exercise. Although there may be gaps in the theory of psychic energy, this is insufficient justification for dismissing the concept.