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1 Introduction
Burkard Sievers and Susan Long
As the disastrous consequences of the collapse of Lehman Brothers emerged, so did the illusionary belief that the United States was suffering a crisis comparable to a hurricane, tsunami or a hundred-year flood or earthquake; catastrophes that periodically recall to mankind âits precariousness, of its land frailtyâ (Miller 2008: 4). The reality that this crisis was, however, âhuman-madeâ appeared for some time unthinkable. Perceiving the crisis as an unavoidable stroke of fate avoided dealing with it from a state of mind (the depressive state) accepting of the human failures and frailties involved. Resigning to the crisis as âfateâ meant that further thought about collective responsibilities and/or guilt was avoided. Blame was projected outward onto market forces or failures in economic models of risk.
What triggered our decision to edit a book on this subject was the experience of the current financial crisis and its aftermath up to 2010. A call for papers was sent out on 2 August 2009. While the consequences of the crisis were unpredictable at that point in time, when the world appeared almost irrevocably changed, it now (December 2010) appears as if the crisis is regarded as a past episode. Take our home countries, for instance. In Germany, a new economic upturn is hailed in the media and claimed as a success by the current government. In Australia, where the economic crisis was perhaps weathered more favourably than elsewhere, government has also claimed credit for saving the country from vast unemployment through its stimulus packages. The US economy is weak but showing uncertain signs of recovery.
It appears that the euro crisis of 2010 and its unforeseeable worldwide implications have pushed the experience of the previous crisis into the background. While several European (the English, French and German) governments are contemplating severe reductions of their national budgets, the United States is primarily concerned with increasing consumption in order to reduce the enormous amount of state debts and fiscal deficit. European governments are reproached by the United States for their lack of solidarity in fiscal policy, and Germany in particular is accused of living on the costs of other countries, owing to its main emphasis of (and dependency on) exports. Greece and Ireland appear to be suffering their own âcrisesâ requiring support from the European Union.
It is unpredictable how the world economy will look when this book is published. Times and economic destinies change rapidly. Whereas optimism about future economic development appears to prevail, there are voices that express concern that an even bigger catastrophe may soon happen; the present economic recovery may well be but a âridge of high pressureâ to be followed by gloomy times.
While (academic) publications on the financial crisis were small in number during the middle of 2009 at the time of our call for papers, they have now increased, along with seminars, conferences and special journal issues.
Our intentions with the book
Our call for papers emphasized the need for a socioanalytic perspective on the financial industry because âsince the earliest part of the twentieth century, anything psychoanalytic with regard to economic or financial studies remains banishedâ (Shaw 2005: 293).
Although it is too early to produce a general socioanalytic theory of money, finance and capital(ism), our aim for this book is to deepen the psycho- and socioanalytic study of the world of finance, the financial industry and the meaning and unconscious function of money and capital as fundamental concerns of contemporary societies.
Rationale
The present global financial crisis and its aftermath have made us alarmingly aware of the impact and dominance that the world of finance has on the economy, the future of democracy and the world at large. Not only does the financial crisis put into question recently taken-for-granted paradigms such as economic rationality and the notion of a free market, but also it has proven that the strategies and actions of many role-holders in the financial system have to a large extent been based on ignorance and flawed understanding. Moreover, both economists and politicians are struggling to adequately perceive and understand the current crisis. Given that academic debate on the causes of the Great Depression continues, it is also likely that an adequate understanding of the unconscious dynamics that led to the current financial crisis â not to mention its aftermath â will also continue to be sought.
The discourse about the financial crisis and its outcome has been broadly restricted to financial-economic facts and explanations, apportioning of blame towards apparently responsible parties and the consideration of appropriate measures to prevent the very worst. The insight that the financial crisis â like all bubbles and busts of financial markets â âwas essentially psychological in originâ (Shiller 2008: 24) is not broadly shared, either in the media or in much of the literature. The attempt at a deeper understanding of immediate crises and the world of finance from a socioanalytic perspective thus appears to be âhandicapped . . . by economistsâ understanding of human beingsâ (Bain 2009: 1).
While attention to and about the financial industry is primarily restricted to the trading of financial instruments for distribution and accumulation of money and capital, the thinking behind it and the state of mind on which it is based favour a supposed rationality and objectivity of fact and figures, instruments, strategies, risk calculation and management derived from superficially sophisticated mathematical models. Further-reaching attempts at understanding the world of finance and the ârules of its gamesâ from a social science perspective are in a state of early adolescence. Although the present boom in behavioural economics as a supposed promising new discipline with the intent to âincrease the explanatory power of economics by providing it with more realistic psychological foundationsâ (Camerer and Loewenstein 2002) has meanwhile led to behavioural finance as a subdiscipline, it appears to be restricted to theoretical and rational explanations of behaviour in situations of decision, uncertainty and time pressure. Financial markets, in particular, have to date ânot been paid much attention by sociologistsâ (Knorr Cetina and Preda 2005: 3; cf. Hessling and Pahl 2006).
In addition, there are some few further attempts to reconceptualize finance and public finance. Critical finance studies, for example, is based on the mission of âputting philosophy and art to work on financial ideas, theories and practices, in order to create concepts that will make it possible to think and use finance altogether differentlyâ (Critical Finance Studies), and social studies of finance is âthe application to financial markets of social-science disciplines such as sociology, anthropology, and social studies of scienceâ (Social Studies of Science). From a psychoanalytic perspective, Tuckett and Taffler (2005, 2008) and Taffler and Tuckett (2007) propose âan interdisciplinary set of theories presently labelled emotional financeâ (Tavistock Policy Seminars 2008).
Moreover, publications that explicitly deal with money or the world of finance from a psychodynamic or socioanalytic perspective seem to be scarce so far (e.g. Arnaud 2003; Kirsner 1990; Levine 2008; Shafer 2001; Sievers 2003, 2009a, b; Stein 2000, 2003, 2004, 2007; Wolfenstein 1993; Young 1998). However, there is, as Sievers (Chapter 7) elaborates, quite a body of theory, for example, on corruption and perversion (Chapman 1999; Chapman and Long 2009; Levine 2005; Long 2008), on narcissistic process and corporate decay (Schwartz 1990a, b), and on toxicity and miasma (Gabriel 2008; Stein 2008) that may be of further help in developing an understanding of some of the unconscious dynamics of the financial world and the present financial crisis in particular.
The attempt at a deeper understanding of the unconscious dynamics of the financial industry and fiscal world will make us face gaps in our field of study. In addition to viewing money, finance, and capital in depth, such an attempt may raise further reaching questions such as the broadly unconscious implications of risk and risk management (e.g. Hirschhorn 1999; Pelzer 2007, 2009; Pelzer and Case 2007; Stein 2003); whether and, if so, to what extent the financial system as a societal or global subsystem is at present serving as a kind of container (and a âscapegoatâ or cover story) for various other virulent issues and broadly neglected problems, both on the level of societies and on that of the world at large; and the range and deeper meaning of discontents with capitalism in its present form, which often seems to be equated with civilization itself.
What is socioanalysis?
Socioanalysis is a social science discipline in the making. The notion of applied psychoanalysis seems to suggest the application of insights gained in clinical research. Socioanalysis, however, with its emphasis on the study of the social, i.e. of social, cultural and political phenomena and dynamics, yet with recourse to clinical concepts and theories from psychoanalysis, aims at the development of specific means of observation, research and hypotheses, concepts and theories that contribute to a deeper understanding of the âsocial fabricâ of organizations and society.
Compared to the more common term of organizational psychodynamics (e.g. Cilliers and Koortzen 2000; Czander 1993; Diamond 2009; Diamond and Allcorn 2009; Hirschhorn 1990; Hirschhorn and Barnett 1993; Kets de Vries and Balazs 1998) or psychoanalytic study of organizations â as offered by the International Society for the Psychoanalytic Study of Organizations (ISPSO) (e.g. Gould 1988/2009; Sievers 2009c) â socioanalysis provides a more extensive frame that goes beyond the perception of social systems as organizations and/or groups in so far as it perceives these as embedded in a social, cultural and global environment and investigates issues at the global level, for instance the economy, the financial industry, âthe marketâ or politics or society at large.
Socioanalysis, as an approach to study, emerged in the late 1990s. In 1999 the first edition of the journal Socio-Analysis was published in Melbourne, co-edited by Susan Long and Allan Shafer. It is at the confluence of certain disciplines, theories and approaches of experiential learning: psychoanalysis, group relations, social systems thinking, social dreaming and organizational behaviour (Bain 1999). While authors like Melanie Klein, Donald W. Winnicott, Wilfred R. Bion or those formerly affiliated with the Tavistock Institute of Human Relations in London, such as W. Gordon Lawrence, Eric Miller, Isabel E. P. Menzies, A.K. Rice or Pierre Turquet, have either directly or indirectly laid much of the ground for this new discipline, various others, not least several members of ISPSO, of which each of us in the past has been president, have meanwhile contributed further leading research, writings and insights. While rooted in psycho-analysis, socioanalysis aims to go beyond its traditional focus of the individual and its narrower frame of object relations. In a sense, socioanalysis adds a further dimension to Freud's (1917) statement that the ego is no longer the master of its own house, in so far as it inverts the relation between master and house. Using Freud's metaphoric frame, it might be stated that socioanalysis regards the master as being like a tenant who has rented his house, while the house itself is owned either by a landlord or a bank.
Bain (1999) sees the origin of socioanalysis in the work of Bion, Rickman and Foulkes at the Hollymoor Hospital, Northfield, Birmingham, in 1943 (Harrison 2000; Harrison and Clarke 1992; Main 1946). The broadening of the psychoanalytic perspective to groups and institutions is mainly attributed to Wilfred R. Bion and the learnings he derived from his experience of the Northfield Experiments (Bion 1946, 1948a, b, 1961). Even though the respective theory was not yet available at the time, Bion first contributed a âsystemicâ perspective to psychoanalytic thinking. His work with groups was based on the hypothesis that groups are led in general by âprimitiveâ phantasies of an unconscious nature, which are an expression of psychotic anxieties. This led him to the assumption that the traditional emphasis on the individual or triadic part of the Greek myth of Oedipus, termed by Freud and most of his successors the âOedipus complexâ, could be extended to the social and political dimension. Emphasizing the other part of the myth, i.e. the Sphinx and its riddle â âWhat is the creature that walks on four legs in the morning, two legs at noon and three in the evening?â â Bion (1961: 8; cf. Kernberg and Ahumada 2000; Lawrence 1999) suggested a âbinocularâ vision as an indispensable prerequisite for the psychoanalytic study of groups â and thus the social. While âthe project of Oedipusâ stands for the classical domain of psychoanalysis in the dyadic setting of analyst and analysand, âthe project of the Sphinxâ refers to the social context, which constitutes consciousness and meaning in organizations (Lawrence 1999: 104; cf. Sievers 1999). The Sphinx represents the capacity to illuminate and question the predominant (unconscious) fantasies and the psychotic thinking in groups in order to allow reality-testing required for the âwork groupâ. Socioanalysis âcoheres around the centering of Sphinx, with Oedipus as a secondary but linked consideration. In short, Sphinx is âfigureâ in the study of organizations and Oedipus is âgroundâ â (Lawrence 1999: 106).
The primary focus of socioanalysis is the impact of âthe socialâ on individuals and their inner world. This becomes evident, for example, in the hypothesis that the thinking (and behaviour) of role-holders in organizations and other social systems is understood as socially induced by the system and/or its environment and influences them to (re)act in, for example, a neurotic, psychotic or perverse manner more than they would in other (systemic) contexts (Lawrence 1995, 1998)....
