We thus formulate for ourselves the concept of a libido-quantum whose psychic representative we designate as the ego-libido; the production, increase, distribution and displacement of this ego-libido will offer the possible explanation for the observed psycho-sexual phenomena.
But this ego-libido becomes conveniently accessible to psychoanalytic study only when the psychic energy is employed on sexual objects, that is when it becomes object libido.
The task of a theory of libido of neurotic and psychotic disturbances would have for its object to express in terms of the libido-economy all observed phenomena and disclosed processes. It is easy to divine that the greater significance would attach thereby to the destinies of the ego-libido, especially where it would be the question of explaining the deeper psychotic disturbances.
The narcissistic or ego-libido appears to us as the great reservoir from which the energy for the investment of the object is sent out and into which it is drawn back again, while the narcissistic libido investment of the ego appears to us as the realized primitive state in the first childhood, which only becomes hidden by the later emissions of the libido, and is retained at the bottom behind them.
The difficulty then lies in the fact that the means of our investigation, psychoanalysis, at present gives us definite information only concerning the transformation of the object-libido, but cannot distinguish without further study the ego-libido from the other effective energies in the ego.
Concerning the fates of the object libido we also state that it is withdrawn from the object, that it is preserved floating in special states of tension and is finally taken back into the ego, so that it again becomes ego-libido. In contradistinction to the object-libido we also call the ego-libido narcissistic libido.