'Money is Laughing Gas to Me' (Freud): A Critique of Pure Reason in Economics and Psychoanalysis

Abstract

In 1975, when the US economy was in the grip of stagflation, New York magazine published the findings of a psychological study of the sex-lives of thirty Wall Street brokers and investors, in which the psychologists showed that when the Dow Jones industrial average went up, so did their subjects' sex-drives (as measured by orgasmic frequency), and when the market fell, so did libido on Wall Street, sending brokers and investors in droves to their psychotherapists' couches, complaining of a welter of sexual dysfunctions. (1) The finding, of course, confirmed a traditional conceit of psychoanalytic literature, which has always invested heavily in the exchange-value of libido, its symbolic equivalence with money, tying compulsive saving to anality and spending to genitality. (2) If the 1975 study has any predictive plausibility, psychoanalysts today must be making a killing from the 2008-09 crash, the world's most acute financial crisis since the Great Depression, and one can only hope that the traders and investors who are paying their fees feel they are making a sound investment in rebuilding their libidinal economies. As for the bankers at the core of the crash, what can one say to them, except: Congratulations! Now that you've been reassured that capitalism is indeed communism for the rich and free enterprise for the poor (as Martin Luther King reputedly put it) and that the tax-payer will pick up the tab for even your most reckless gambling debts, your libidos must be popping! The aim of this gathering of essays, as of the Freud Museum conference in which most of them originated (Psychoanalysis, Money and the Economy, 1-4 July 2010), is to re-open a dialogue between two disciplines, psychoanalysis and economics, which for much of the past 100 years have been mutually indifferent and mutually opaque. The aim of this introductory essay, specifically, is to stage a confrontation between the subjects of these discourses, homo psychologicus and homo oeconomicus. The historical rift between these subjects has produced a cluster of simplistic distinctions--half-truths at best, or myths in the Barthesian sense--that this special issue is designed to discredit and to move debate beyond, such as the notion that psychoanalysis deals with the symbolic meanings of money whereas economics deals with 'real' money; that the subject of psychoanalysis is by definition unreasonable, neurotic or delusional whereas the subject of economics is a logical decision-maker; or that economics is a science of rational choice whereas psychoanalysis is a science (or pseudo-science) of the irrational. The psychoanalytic temptation to think money only in relation to obsessional neurotic syndromes risks reinforcing the idea that a global financial crisis must be understood as a dysfunction, sickness or pathology of the market, requiring psychological diagnosis and strong medicine to restore it to reason, whereas 'healthy' markets are transparently rational in determining the so-called 'true' price of everything through the logic of supply and demand. (3) Another way of seeing the 2008-9 crash, of course, is as business-as-usual--as one of those endemic crises by which capitalism accelerates the privatising of profits and the nationalising of debts, enabling the corporate state to produce a leaner, meaner capitalism by reversing labour-union gains with what it defends as regrettable but 'necessary' cuts to pensions, wages, public sector employment, state education and welfare, while ratcheting up the police and military power needed to quell social unrest and compel global discipline. (4) The failure of certain autocratic regimes in North Africa and the Middle East to suppress such potentially revolutionary unrest in 2011 is not, of course, to be confused with a failure of capitalism. When I first proposed 'psychoanalysis and the economy' as a conference theme to the Freud Museum in January 2009--a time when many governments were performing U-turns in fiscal policy, dropping their hard-line Friedmanism in favour of pseudo-Keynesianism--it wasn't because I hoped psychoanalysis might offer some diagnostic insights into a sickness of previously healthy financial markets, still less any 'cures' for economic neurosis. …