Next Merlin arranges the whole theme of the sword in the stone; the sword of destiny.  One of the great powers recognized in early times was that of the smith to draw steel from a stone – iron and charcoal combined to create something stronger than either – and this steel of the sword represents the virtue and triumph of whatever people were talking about.  So there’s this legend of the stone with the sword in it that could be drawn only by the one for whom it was destined.  Merlin produces Arthur, who draws the sword.  There’s the beginning of a whole context of the imperial story and its development.     RG 133

In general, as a cutting weapon, the sword refers to the discerning, discriminating function of consciousness, and a function of this kind has, according to the mythological testimony of the unconscious, robbed Christian man of his shadow.  This must certainly allude to the cutting off of the natural, primitive man which has been brought about by Christian thinkers with their doctrine of the privatio boni.  TGL 241