Freud’s well known concept was inspired by the Greek legends of Oedipus Rex, especially as they are expressed in Sophocles's play, who unknowingly marries his mother and kills his father. The Oedipus complex is way of talking about both the erotic and destructive components of the child’s (especially the male child’s) relation with its parents. Because the legend is about a figure who usurps the Father's role, both as family and state authority (husband and ruler) and suffers horrific mutilation and guilt as a result, the narrative is useful to Freud as a symbol of childhood rebellion and eventual conformity (or psychological "mutilation" for failure).
But the legend of Oedipus also has much in common with the ideas in Freud's essay, "The Family Romance." Oedipus is a figure who is on a quest to discover his parentage: he has been raised by surrogates, first a sheep herd and later the royal family of Corinth. It is in order to learn the truth of his birth that he embarks on the journey that leads to his tragic enlightenment. It is the universality suggested in the tale, signaled by the solution to the Sphinx's riddle: "mankind," that intrigues Freud, who writes in The Interpretation of Dreams,
"His destiny moves us only because it might have been ours---because the oracle laid the same curse upon us before our birth as upon him. It is the fate of all of us, perhaps, to direct our first sexual impulse towards our mother and our first hatred and our first murderous wish against our Father. Our dreams convince us that this is so...Here is one in whom these primaeval wishes of our childhood have been fulfilled, and we shrink back from him with the whole force of the repression by which those wishes have since that time been held down within us. While the poet, as he unravels the past, brings to light the guilt of Oedipus, he is at the same time compelling us to recognize our own inner minds, in which those same impulses, though suppressed, are still to be found...Like Oedipus we live in ignorance of these wishes, repugnant to morality, which have been forced upon us by Nature, and after their revelation we may all of us well seek to close our eyes to our childhood.
There is an unmistakable indication in the text of Sophocles's tragedy itself that the legend of Oedipus sprang from some primaeval dream-material which had as its content the distressing disturbance of a child's relation to his parents owing to the first stirrings of sexuality. At a point when Oedipus, though he is not yet enlightened, has begun to feel troubled by his recollection of the oracle, Jocasta consoles him be referring to a dream which many people dream, though, as she thinks, it has no meaning:
'Many a man ere now in dreams hath lain
With her who bare him. He hath least annoy
Who which such omens troubleth not his mind.'
Today, just as then, many men dream of having sexual relations with their mothers, and speak of the fact with indignation and astonishment. It is clearly the key to the tragedy and the complement to the dream of the dreamer's father being dead. The story of Oedipus is the reaction of the imagination to these two typical dreams."
(The Interpretation of Dreams, Avon Books: New York, 1965. 296-297)
I think its interesting to note the way Freud reads literature here: he looks at it as something which throws light on the other narrative components of our lives---our dreams and our retelling of our pasts. In other words, the overlap between "psychoanalysis" and "literature," illuminates what both domains share: an interest in signification, symbolic representation, narrative, interpretation, issues of reading.
Freud worked and re-worked his idea of Oedipal struggle over the course of his life, using it as a way to think about how individuated consciousness is produced, how "humans" are made. As you recall, Freud theorized the pre-Oedipal infant as boundary-less and unfocused mass of needs and desires, unable to distinguish between objects or understand their relation, as this image of an "infant's eye view" suggests:
Pre-Oedipal consciousness is unable to distinguish between self and other, yet dependent on the care of others to satisfy basic necessities. Freud emphasizes the powerful early role of the child's relation to the mother and the mother's breast (or as illustrated in this slightly de-sexualized photograph from 1947, the bottle) as the site of early sexual pleasure or desire:
The pre-Oedipal child's world is focused on the Mother (or a fusion between Self and Mother):
into which the Father intervenes, an unwelcome rival and threatening challenger:
to whose power the infant must eventually capitulate:
The child must concede power and centrality to adult authority, moreover his/her early polymorphous sexuality must be funneled into socially acceptable channels: no more self or incestuous pleasure and proper identification with properly gendered role models. The boy learns to accept and identify with male authority, the girl learns to identify with the mother and accede to this less powerful position (though perhaps always resentfully). Through negotiating the traumatic upheavals of the Oedipus struggle, a boundary-less nexus of libidinal pleasures learns to accept His of Her place in the vastly hierarchical scheme of things: gender roles reinforced, satisfactions postponed, authority accepted, the family and society reproduced.
I've sketched out a very simplified account of the Freudian Oedipal struggle because I want to highlight its narrative elements, its function as a story about the birth of individual consciousness through struggle and conflict with parental (and by extension, social) authority and power. But if the Oedipus narrative is a story about capitulation, the Family Romance is a tale of the child getting his own back, fighting for independence by rewriting the family narrative.
