The OED indicates that the first known use of the word “psychological” is from 1812, but de Grazia says that “Coleridge had been using the term in his lectures since 1800.”  He used it mainly to describe Shakespeare’s ability to characterize “habits of mind.”

Coleridge’s interest in psychological interpretation of Shakespeare was inspired in part by his reading of Kant.  Only after reading the first Critique did he come to see “Shakespeare’s deep and accurate science in mental philosophy,” his “psychological genius.”

Kant to Coleridge, and then back to Germany, to Hegel.   Hamlet is an example of the third stage of the development of art toward absolute Geist since in Hamlet the conflict is entirely inward.  In contrast to Electra , with which Hamlet was often compared, Shakespeare’s play captured what for Hegel was the “true content of romantic art,” its “absolute inwardness,” its “beautiful inwardness.”  In the same vein Goethe described Hamlet as a beautiful soul too fragile to handle the hard demands of the outside world.