"According to the view argued by Goethe and still dominant today, Hamlet represents the type of human being whose power of action is paralysed"


   A reference to German polymath Johann Wolfgang von Goethe's Wilhelm Meister's Apprenticeship (1795-96).  Several of Shakespeare's plays feature heavily in the novel, reflecting their huge popularity in Germany at the time.  The passage Freud refers to is from Book IV Chapter Thirteen, in which Wilhelm describes Hamlet as possessing a "most moral nature, without the strength of nerve which forms a hero", his indecision causing him to "all but lose his purpose from his thoughts".   


Online edition of 'Wilhelm Meister's Apprenticeship', as translated by Thomas Carlyle, (1824)