Freud attended the lectures of Franz Brentano in Vienna in 1874. Brentano was committed to establishing psychology as an empirical science based on the analysis of intentionality as the defining feature of consciousness. Brentano’s approach excluded the possibility of an unconscious as a realm of intentions unknown to the subject.
The title statement echoes Freud’s celebrated slogan “Where id was, ego shall be!” Neither of these statements is an “either or” proposition. Freud did not propose to replace the id with the ego. It is not even clear what that could possibly mean. The idea is to expand the influence, control, and power of the second term over the first one. The ego expands its power; likewise, with empathy.