From No Subject - Encyclopedia of Psychoanalysis
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The problem for Lacan is how does one symbolically represent 'lack' - something that by definition is not there?

His solution is the idea of the 'veil'.

The presence of the veil suggests that there is an object behind it, which the veil covers over, although this is only a presumption on the part of the subject.

In this way the veil enables the perpetuation of the idea that the object exists.

Thus, both boys and girls can have a relationship to the phallus on the basis that it always remains veiled and out of reach.

The phallus provides the vital link between desire and signification.

It is desire that drives the process of symbolization.

The phallus is the ultimate object of desire that we have lost and always search for but never had in the first place.