When Heinz Kohut broke with the Freudian tradition in which he had become a leader, he opened a new world for future generations. In the 1940s, Kohut had become a prominent member of the Chicago Institute for Psychoanalysis, having become such a strong proponent of the traditional psychoanalytic perspective that was then dominant that he jokingly called himself, “Mr. Psychoanalysis.”

As a bit of background, here is a generalized summary of the development of his Self Psychology model, via Wikipedia:

Though he initially tried to remain true to the traditional analytic viewpoint with which he had become associated and viewed the self as separate but coexistent to the ego, Kohut later rejected Freud's structural theory of the id, ego, and superego. He then developed his ideas around what he called the tripartite (three-part) self.[7]

According to Kohut, this three-part self can only develop when the needs of one's “self states”, including one's sense of worth and well-being, are met in relationships with others. In contrast to traditional psychoanalysis, which focuses on drives (instinctual motivations of sex and aggression), internal conflicts, and fantasies, self psychology thus placed a great deal of emphasis on the vicissitudes of relationships.

Kohut demonstrated his interest in how we develop our “sense of self” using narcissism as a model. If a person is narcissistic, it will allow him to suppress feelings of low self-esteem. By talking highly of himself, the person can eliminate his sense of worthlessness.
 

Historical Context

Kohut expanded on his theory during the 1970s, a time in which aggressive individuality, overindulgence, greed, and restlessness left many people feeling empty, fragile, and fragmented.[7]

Perhaps because of its positive, open, and empathic stance on human nature as a whole as well as the individual, self psychology is considered one of the “four psychologies” (the others being drive theory, ego psychology, and object relations); that is, one of the primary theories on which modern dynamic therapists and theorists rely. According to biographer Charles Strozier, “Kohut...may well have saved psychoanalysis from itself”.[2] Without his focus on empathic relationships, dynamic theory might well have faded in comparison to one of the other major psychology orientations (which include humanism and cognitive behavioral therapy) that were being developed around the same time.

Also according to Strozier, Kohut's book, The Analysis of the Self: A Systematic Analysis of the Treatment of the Narcissistic Personality Disorders,[3] “had a significant impact on the field by extending Freud's theory of narcissism and introducing what Kohut called the 'selfobject transferences' of mirroring and idealization”. In other words, children need to idealize and emotionally “sink into” and identify with the idealized competence of admired figures. They also need to have their self-worth reflected back (“mirrored” Note : This term isn't a synonym of "mirroring") by empathic and care-giving others. These experiences allow them to thereby learn the self-soothing and other skills that are necessary for the development of a healthy (cohesive, vigorous) sense of self. For example, therapists become the idealized parent and through transference the patient begins to get the things he has missed. The patient also has the opportunity to reflect on how early the troubling relationship led to personality problems. Narcissism arises from poor attachment at an early age. Freud also believed that narcissism hides low self-esteem, and that therapy will re-parent them through transference and they begin to get the things they missed. Later, Kohut added the third major selfobject theme (and he dropped the hyphen in selfobject) of alter-ego/twinship, the theme of being part of a larger human identification with others.

Though dynamic theory tends to place emphasis on childhood development, Kohut believed that the need for such selfobject relationships does not end at childhood but continues throughout all stages of a person's life.[8]

With that background, here is a brief video of Kohut talking about empathy in his final public speech.

Heinz Kohut - Reflections on Empathy

Uploaded on Jan 9, 2009

Kohut's final speech, "Reflections on Empathy", was given at the 1981 Self Psychology conference in Berkeley, California. He was aware he was dying, and at the conclusion of his speech he announced his final farewell. This is a Lifespan Learning Institute video.