Institutional economics and psychoanalysis: how can they collaborate for a better understanding of individual-society dynamics? Arturo hermann* may 2005

The link between psychology, institutions and policies

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The link between psychology, institutions and policies
In the analysis of these aspects, the central point we wish to stress is that the analysis of institutions is intrinsically linked to policy dynamics. This implies that collaboration between institutional economics and psychoanalysis could also be utilized for the analysis of all the manifold aspects of policy action with particular attention, as highlighted in a previous work, to the problem of co-ordination between different policies. Since, as first shown by Commons, policy action is not limited to governmental activity but involves all the institutions and individuals concerned in one way or another with policy measures, the problem of policy co-ordination goes at the heart of the problem of "institutional" or collective co-ordination. Indeed, collective action and policies can be regarded as two aspects of the same complex phenomena: on one hand, every institution (and also every person living in a collective context) carries in its action, more or less explicitly, a set of policy objectives; and, on the other hand, policy action does not unfold out of an automatic working of some "natural law" but needs a well defined ISEF, with all the related set of conflicting values and objectives, for its accomplishment.

This issue thus raises an interesting question which, of course, is related to every policy domain: should public policies be aimed at reducing psychological disturbances and, if so, what are the most suitable policies? With regard to the first question, we think favourably of policies addressed to reducing psychological disturbances. In fact, as we have seen, psychological disturbances, although occurring in the mind of the person, have an intrinsic social character, owing to the individual’s need to establish affective and intellectual relations with others. Also for these reasons, psychological disturbances tend to be a widespread feature of human beings; moreover, the most impairing forms46 tend to occur among the disadvantaged section of the population (Desjarlais and others, 1995). In this sense, psychological disturbances partly possess, as outlined before, an intrinsic social and evolutionary character. This implies that public policies can play an effective role in reducing psychological disturbances and, in virtually every industrialized country, there are examples of policies addressed to the therapy of these disturbances. Although the analysis of such policies is beyond the scope of this work, our general impression is that there may still be need for advancement especially in the area of prevention and diffusion of psychological and psychoanalytic knowledge47.

The analysis of policy issues would not be possible without a thorough process of social valuing which, as already seen, constitutes one of the leading concept of institutional economics. This process calls for an adequate involvement of the individuals and groups making up collective life in any given context48.

In order to attain a more complete understanding of the factors at play in determining the structure and evolution of social valuing, this analysis would also benefit from a consideration of psychoanalytic concepts.

In fact, as observed before, social value tends to take, at individual and collective level, a (partly) unconscious, symbolic and implicit character, being deeply embodied in the habits of thoughts and life typical of every society. Consequently, the nature of the problems and conflicts associated with these evaluations may render difficult the identification of all the aspects of these problems and their possible solutions49.

This kind of analysis would also lead to a deeper understanding of the multifarious aspects of such concepts as capitalism, socialism, market, democracy, participation, competition, which are at the heart of policy action and that tend, by embodying different values and visions of the world often having a strong emotional component, to constitute an important part of the individual and collective social value process.

We are aware of the difficulty of creating a stable collaboration of this kind but still believe that furthering this avenue of research may produce a fuller understanding of individual-society dynamics. In this regard, we wish to point out the mutual benefits of a more systematic collaboration between institutional economics and psychoanalysis in the study of social issues and the related policy options: on one hand, institutional theory would benefit from a consideration of psychoanalytic concepts, since it could help cast a fuller light on the psychological side of institutional dynamics; relatedly, on the other hand, psychoanalytic theory would benefit in its application to social issues from the consideration of institutional concepts since this can help cast a better light on the institutional side of psychological dynamics. The problems of social sciences are so complex, we believe, that the collaboration of many disciplines is necessary for understanding social phenomena. In this sense, the fact that institutional economics shares many elements with pragmatist and cognitive psychology constitutes an enriching element that can contribute to a more fruitful collaboration among these theories50 and psychoanalysis. Furthermore, significant exchange of ideas have already occurred among these disciplines and psychoanalysis. In conclusion, we can say that a great deal of work is necessary for a better understanding of the social, economic and psychological relations and conflicts upon which contemporary societies are based. Bringing together psychological and socio-economic analysis can help cast more light both on the role played by social and economic factors in shaping the individual’s course of life and, relatedly, on the role played by each person in influencing these factors.

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