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Keynes and Freud: Psychoanalysis and Keynes's Account of The "Animal Spirits" of Capitalism
Keynes and Freud: Psychoanalysis and Keynes's Account of The "Animal Spirits" of Capitalism
Author(s): E. G. WINSLOW
Source: Social Research, Vol. 53, No. 4 (WINTER 1986), pp. 549-578
Published by: The New School
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Keynesand Freud:
and
Psychoanalysis
Keynes'sAccount
ofthe
"AnimalSpirits" /
ofCapitalism* / BY E. G. WINSLOW
In the preface,Keynes describesthe compositionof the
as "a longstruggleof escape . . . fromhabitual
GeneralTheory
modesof thoughtand expression."This paper examinesthe
that this included a struggleof escape fromthe
possibility
oforthodoxeconomics.In
motivational
utilitarian
assumptions
is
that
its
central
thesis
his
economicsis based on the
particular,
assumptionthat,to quote Keynes,"theessentialcharacteristic
of capitalism"is "the dependenceupon an intenseappeal to
and money-loving
instincts
ofindividualsas
themoney-making
the main motive force of the economic machine."1This
assumptionabout motivationis part of an approach to
economicswhich emphasizesthe role of the irrationalin
economiclife.I shallattemptto showthatKeynes'saccountof
bears a
capitalistmotivationand of the role of irrationality
close resemblanceto what he himselfcalled "the Freudian
theoryof thelove of money."2
1
30 vols.
John Maynard Keynes,Essaysin Persuasion(1931), in The CollectedWritings,
(London:Macmillan,1971-80),9: 292.
2
6: 258-259.The consistency
Collected
of Keynes'spsychological
Writings,
premiseswith
SOCIAL RESEARCH, Vol. 53, No. 4 (Winter1986)
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550
SOCIAL RESEARCH
392-393.
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551
As R. B. Braithwaite
has pointedout,5Keynes'sautobiographical memoir,"My EarlyBeliefs,"reportshis abandonmentof
the beliefthat"human natureis reasonable."Keynesclaims
thisbelief"was flimsily
based . . . on an a prioriviewof what
humannatureis like,bothotherpeople'sand our own,which
was disastrouslymistaken."In particular,it ignored the
"deeperand blinderpassions,"the "vulgarpassions."6Rejecting thisearlybelief,he now claimsthatthereare "insaneand
irrational
springsof wickednessin mostmen."7
I believethischange had an importanteffecton Keynes's
economics.In particular,it led to an emphasison the role
in economicbehavior.Accordingto
played by irrationality8
has two sources,one subjectiveand
Keynes,thisirrationality
one objective.The subjectivesourceis personalincapacityfor
rationality.
Keynesassumesthatmostpeople have littleinnate
for
capacity reason.This is thebasisof his supportfora wide
economic,political,and socialarrangerangeof authoritarian
5 R. B.
Braithwaite,"Keynes as a Philosopher," in Milo Keynes, ed., EssaysonJohn
Mamar Keynes(Cambridge: Cambridge UniversityPress, 1975), p. 245.
6
10: 449-450.
(1933), in CollectedWritings,
John Maynard Keynes,Essaysin Biography
1
Ibid.,p. 447.
8 I willfollow
Keynes in using the term"irrational"to describebeliefswhichare held
forinadequatereasons. "If a man believessomethingfora reason whichis preposterous
or for no reason at all, and what he believes turnsout to be true for some reason not
knownto him,he cannot be said to believe it rationally,
although he believes it and it is
in fact true. On the other hand, a man may rationallybelieve a proposition to be
when it is in factfalse.The distinctionbetweenrationalbeliefand mere belief,
probable,
therefore,is not the same as the distinctionbetween true and false beliefs" (John
8: 10). According
[1921], in CollectedWritings,
Maynard Keynes,A Treatiseon Probability
to psychoanalysis,conscious ideas which are irrational in this sense are often the
outcome of what Keynes, in the Treatiseon Probability
(ibid., p. 15), calls "irrational
associationsof ideas"- irrationalassociationsbetween the conscious ideas, on the one
hand, and the unconscious ideas which theysymbolize,on the other.
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SOCIAL
552
RESEARCH
merits,fromcorporatism,9to elitistpoliticalpartystructures,10
to eugenics.11Keynes once said of Marxism: "How can I adopt
a creed which, preferringthe mud to the fish, exalts the
boorish proletariatabove the bourgeois and the intelligentsia
who, with whatever faults,are the quality in life and surely
carrythe seeds of all human advancement?"12
In Keynes's economics, the assumption that most people
have littlecapacityforreason is mostin evidence in his analysis
of behavior in stock markets. In the Treatiseon Money,for
example, he claims thatthe "mob," the "vast majority"of those
who participatein such markets,
knowalmostnothingwhateveraboutwhattheyare doing.They
ofwhatis requiredfora valid
do notpossesseventherudiments
of
and fearseasilyaroused
the
and
are
hopes
prey
judgement,
eventsand as easilydispelled.This is one of theodd
bytransient
of the CapitalistSystemunder whichwe live,
characteristics
which,when we are dealing withthe real worldis not to be
overlooked.13
The objective source of irrationalityis the impossibility,
given the nature of the social world, of finding rational
decision criteriain manyareas, notjust of economic life,but of
life in general. In a 1938 letter to H. Townshend, Keynes
writes:
I thinkit importantto emphasisethe pointthatall thisis not
an economic
problem,but affectsevery rational
particularly
choiceconcerningconductwhereconsequencesenterinto the
rationalcalculation.Generallyspeaking,in makinga decisionwe
none of whichis
havebeforeus a largenumberof alternatives,
in
the sense that
than
the
'rational'
more
others,
demonstrably
we can arrangein order of meritthe sum aggregateof the
obtainablefromthecompleteconsequencesof each. To
benefits
avoid being in the positionof Buridan's ass, we fall back,
9
10Ibid., 295-296.
pp.
"Ibid.. D. 292.
12Ibid., 258.
p.
13
p. 323.
Keynes, Treatiseon Money:TheAppliedTheory,
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553
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SOCIAL
554
RESEARCH
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555
ofthe'newpsychology',
were"important
as it
laydisseminators
was called,in England."21
In a June 18, 1925 letterto hiswife,whowas thenin Berlin
in analysiswithKarlAbraham,JamesStracheyreports,rather
thatin a recentconversation
dismissively,
Maynard said he was engrossed in the Case Histories [Volume 3
of Freud's CollectedPapers which the Stracheys had recently
translated and published], & made complimentaryremarks
about the translation.According to him he's going through the
whole of the Dr.'s works,so as to get a real grasp of the subject.
Ahem . . . But I see a dim possibilityof using him (or Lydia) as
a means of screwing5000 out of Sam Courtauld for a clinic.22
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556
SOCIAL
RESEARCH
The FreudianTheoryoftheCapitalistSpirit
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557
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558
SOCIAL RESEARCH
Sigmund Freud, Characterand Culture,ed. Philip Rieff (New York: CrowellCollier, 1963), pp. 27, 29, 30, 31.
26
Analysis,pp. 533-534.
Jones, Paperson Psycho-
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559
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560
SOCIAL
RESEARCH
interest
in moneygets
theadult'ssymbolic
oflogicality,
direction
but
extendednotonlyto objectswithsimilarphysicalattributes,
value or possession
to all sortsof thingsthatin anywaysignify
(paper money,shares,bankbook,etc). But whateverformmay
be assumed by money,the enjoymentat possessingit has its
and
deepestand amplestsourcein coprophilia.Everysociologist
whoexaminesthefactswithoutprejudicehas
nationaleconomist
to reckonwiththisirrationalelement.Social problemscan be
of humanbeings;
thereal psychology
solvedonlybydiscovering
speculationsabout economicconditionsalone willneverreach
thegoal.31
The third of the traitsemphasized by Keynes is a sadistic
love of power. Freud explains this as the outcome of the
repressionand sublimationof what he calls the death instinct.
According to Abraham, it is particularly prominent in
character types associated with the anal-sadistic phase of
libidinal development. It enters into each of the three anal
traits.For example, "compulsiveorderlinessis at the same time
an expressionof the patient'sdesire fordomination. He exerts
power over things. He forces them into a rigid and pedantic
system. And it not seldom happens that he makes people
themselvesenter into a systemof this kind."32All systemsof
authoritarianrules "not onlytestifyto an obsession fororder in
its inventor,but also to his love of power which is of sadistic
origin. . . . Allusion may be made here to the pleasure these
neurotics take in indexing and registering everything,in
making up tabular summaries,and in dealing withstatisticsof
everykind."33
Both Ferenczi and Jones make a particular point of
connecting anal interests with capitalist motivation and
irrationality.Ferenczi claims that it is
not improbablethat the capitalisticinterest,increasingin
standsnotonlyat thedisposalof
withdevelopment,
correlation
31Ibid.,DD. 276-277.
32 Karl Abraham,Selected
(London: Hogarth Press, 1927), p.
Paperson Psycho-Analysis
430.
33Ibid., 377.
p.
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561
therefore-but
practical,egoisticaims- of the reality-principle,
also thatthe delightin gold and in the possessionof money
representsthe symbolicreplacementof, and the reactioni.e. thatitalso satisfies
the
formation
to,repressedanal-erotism,
pleasure-principle.
The capitalisticinstinctthus contains,according to our
an egoisticand an anal-erotic
component.34
conception,
to
Jones,in a passagecitedbyKeynesin hisfootnotereference
the theory,makesthe same claim withspecificreferenceto
moneyillusionand themoderninfluenceof "aurisacrafames":
knowthattheidea ofwealthmeanssimply'a
Moderneconomists
lien on futurelabour',and thatanycounteron earthcould be
used as a convenientemblem for it just as well as a 'gold
standard'.Metal coins, however,and particularlygold, are
unconscioussymbolsfor excrement,the materialfromwhich
mostof our sense of possession,in infantiletimes,is derived.
The ideas of possessionand wealth,therefore,obstinately
adhereto theidea of 'money'and goldfordefinitepsychological
reasons,and people simplywill not give up the 'economist's
fallacy'of confoundingmoneywithwealth.This superstitious
afterthe
attitudewillcostEnglandin particularmanysacrifices
War, when effortswill probablybe made at all costs to
a gold standard.35
re-introduce
In his footnotereferenceKeynessaysthis"prophecy,written
byDr. Jonesin 1917,maybe reckoned,perhaps,a successfor
method."36
thepsycho-analytic
34 Ferenczi,Sex in
PsychoAnalysis,p. 279.
35
pp. 171-172.
Jones, Paperson Psycho-Analysis,
JO
Keyness quotation does not include the tirsttwo sentences or this passage. In
addition, it omits,withoutindication,the followingassertion from the part which is
quoted: "and people simplywill not give up the 'economist'sfallacy'of confounding
money withwealth." Elsewhere, Keynes claims that,although it is a "barbarous relic"
4: 138), "the gold standard,withitsdependence on pure chance, its
(CollectedWritings,
faithin 'automatic adjustments,'and its general regardlessnessof social detail, is an
essentialemblem and idol of those who sitin the top tierof the machine" (ibid.,9: 224).
In pointingto superstitionas part of the explanation for this,he says that "gold still
enjoys the prestigeof its smell and colour" (ibid.,4: 132). Pecunia nonlet.
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562
SOCIAL RESEARCH
Keyneson Capitalist"AnimalSpirits"
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563
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564
SOCIAL RESEARCH
of the species in a
centurywas able to forgetthe fertility
of the dizzyvirtuesof compoundinterest."41
contemplation
The thesisof psychoanalysis
is, of course,thatthe interestin
at compoundinterestis partlyderivedfromthe
accumulation
and the sublimationof sexual
repression(the "forgetting")
ofthespecies").This associationbetween
instincts
("thefertility
and
fertility compoundinterestpointsto a deeper parallelism
between"sexuallove"and the "loveof money":
and Darwinism
The parallelism between economic laissez-faire
to be very close indeed. Just as Darwin
... is now seen ...
invoked sexual love, acting through sexual selection, as an
adjutant to natural selectionby competition,to direct evolution
along lines which should be desirable as well as effective,so the
individualistinvokes love of money, acting through the pursuit
of profit,as an adjutant to natural selection,to bring about the
productionon the greatestpossible scale of what is moststrongly
measured by exchange value.42
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565
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SOCIAL RESEARCH
566
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567
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568
SOCIAL
RESEARCH
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569
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570
SOCIAL
RESEARCH
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571
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572
SOCIAL
RESEARCH
or profit.Whyshould
formofstoringwealthyieldssomeinterest
wish
to
use
a
lunatic
outside
asylum
moneyas a storeof
anyone
wealth?
Because, partly on reasonable and partly on instinctive
grounds,our desire to hold moneyas a storeof wealthis a
of our own calculations
barometerof thedegreeof our distrust
thefuture.Eventhoughthisfeeling
and conventions
concerning
or instinctive,
itoperates,so to
aboutmoneyis itselfconventional
It
of
our
motivation.
takes
a
level
at
chargeat the
speak,
deeper
momentswhen the higher,more precariousconventionshave
weakened.The possessionofactualmoneylullsour disquietude;
and thepremiumwhichwe requireto makeus partwithmoney
is themeasureof thedegreeof our disquietude.64
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573
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SOCIAL
574
RESEARCH
1973),p. 384.
72
Analysis,p. 183.
Jones,Paperson Psycho-
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575
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576
SOCIAL RESEARCH
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577
indicate
As I have pointedout, Keynesdoes not explicitly
of
his
economics
are
connected
thatthepsychological
premises
to psychoanalysis.
itself,however,pointsto a
Psychoanalysis
reason whyhe would have wished,had he made use of the
character,to keep suchuse hidden.
theoryof theanal-sadistic
interests
is accompaniedbywhatFreud
of
Repression primary
calls "resistance."Individuals resist the making of the
repressed unconsciousconscious. In the articlescited by
that"itis the
ErnestJonesclaims,first,
Keynesin hisfootnote,
which
calls
forth
the
'resistance'
of
greatest
interpreting symbols
work" and which is "the centre of the
in psycho-analytic
strongestopposition to psychoanalysisin general"74and,
of anal-erotictraitswhich
second, that it is interpretations
of
resistance.75
Freudclaims
storms
such
the
greatest
produce
forpersuasive
has important
thefactof resistance
implications
in
Romersholm
could
makeno
In
Ibsen
writing. explainingwhy
explicitreferenceto an incestuousrelationbetweena central
character,Rebecca,and her father,he pointsto whathe calls
"lawsof poeticaleconomy":
thiswayof presenting
the
Laws of poeticaleconomynecessitate
setforth,
forthisdeepermotivecould notbe explicitly
situation,
ithad to be dissimulated,
keptfromthedirectperceptionof the
suchseriousresistances,
otherwise
based
or
the
reader;
spectator
on mostpainfulemotions,wouldhave arisenthatthe effectof
thetragedymighthavebeen imperilled.76
In an unsigned
polemicist.77
Keyneswas a self-conscious
to the programfora season of fourIbsen plays
introduction
presentedby the CambridgeArtsTheatreon the occasionof
itsopeningin February1936, Keyneshimselfpointsto what
Freudcalls"poeticaleconomy."Havingsaid of the playsthat,
at one level, they can be seen "as tragediesof character,
74Ernest
5th ed. (Boston: Beacon Press, 1961), p. 87.
Jones,Paperson Psychoanalysis,
75Ibid., 413.
p.
/o
Sigmund Freud, Some Character-Types Met with in Psycho-Analytic Work"
(1915), in CollectedPapers,vol. 4 (London: Hogarth Press, 1925), p. 339.
" See, for
example, Keynes,Essaysin Biography,
p. xvn.
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578
SOCIAL RESEARCH
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