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


PART II: THE PSYCHOANALYTIC APPROACH



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PART II: THE PSYCHOANALYTIC APPROACH
4. The Basic Concepts..................................................................................................19

5. Further Developments...............................................................................................21

6. Psychoanalysis, Culture and Society......................................................................23
PART III: THE DEBATE AROUND SOME

KEY PSYCHOANALYTIC CONCEPTS
7. Psychoanalysis and Its Critics.................................................................................25

8. Some Controversial Problems..................................................................................26

9. Freud as a Social Reformer.......................................................................................29

10. A Summing-Up................................ ............................................................. ............31
CONCLUDING CHAPTER: HOW CAN INSTITUTIONAL

ECONOMICS AND PSYCHOANALYSIS INTERACT?....................................................34
Appendix: The Individual’s Decision-Making Process:

Preliminary Remarks.......................................................................................................39
References........................................................................................................................43

INTRODUCTORY ABSTRACT
The idea of carrying out this work stems from the observation that although institutional economics deals with the study of human actions and motivations in their historical evolution, there has been in many cases, as vividly expressed by Ayres (1936), a lack of scientific collaboration with other fields of the social sciences; in this regard, psychoanalysis is a case in point.

Indeed, examining the kind of collaboration realized so far between psychological theories and institutional economics, it becomes apparent that institutional economics — and also, as far as we know, economics at large — has established a fairly systematic link mainly with pragmatist and cognitive psychology; on the contrary, collaboration with psychoanalysis has until now assumed a scattered character, mostly in the form of fleeting remarks that have been unable to provide anything like an organized treatment.

The same holds true, apart from some notable exceptions, for collaboration between psychoanalysis and social and historical sciences.

Three groups of factors may have contributed to this situation: i) the difficulty for social scientists and psychoanalysts to go beyond the methodological scope of their complex disciplines; ii) a tendency among social scientists to interpret Freud’s work as being chiefly based on biological needs and thus, on these grounds, to be rather sceptical of its usefulness for analyzing social phenomena; iii) furthermore, the intrinsic multifariousness of psychoanalytic issues and the partly different views of psychoanalysts in this regard may have contributed to making it difficult for social scientists to feel at ease within the psychoanalytic field.


In this regard, our analysis may be synthesized as follows: institutional economics, especially through Veblen's and Commons's contributions, has highlighted a number of aspects that provide a better understanding of the inner nature of social and economic relations. This has been realized through the elaboration of concepts which characterize, in their continual development, the core of institutional economics: these include, among others, ceremonial/instrumental behaviour dichotomy, instincts, culture, evolution, habits, path-dependency, tacit knowledge, technology, collective action, going concerns, working rules and social valuing.

By employing these concepts, institutional economics points out that institutions, policies, culture, ethics and morality are nothing but different aspects of the evolutionary collective action out of which social and economic phenomena emerge.

Nevertheless, as previously noted, it has been difficult for social scientists to employ psychoanalysis in their studies of social phenomena. However, we deem this kind of collaboration useful, as psychoanalysis addresses many issues relevant to the study of individual-society dynamics. In this sense, psychoanalysis can contribute to a more complete understanding of the role played by psychological conflicts and motivations in determining economic and social structures.

One of the most important insights of psychoanalytic theory is that the intellectual, affective and biological aspects of personality are intertwined in the complexity of each person and unfold in every aspect of individual and collective behaviour. Even when the expression of one of these aspects is more pronounced, this does not mean that the other aspects cease to operate, but only that they operate in the background, in a partly unconscious and indirect way that may nonetheless heavily impinge upon those elements appearing in the foreground.

In the mutual working of these aspects, the role of symbolic meaning is of special importance for synthesizing and conveying the conflicts and the cultural and historical heritage associated with them. This implies that institutions are important for individuals not only with regard to their real functions but also for their symbolic meanings. Hence, the characteristics of every culture — including, of course, the family setting — are likely to play a pivotal role in determining the course that an individual life will take.

For instance, the act of feeding acquires importance for the child not only because it fulfils a biological need but also because it tends to be interpreted by the child as an expression of affection; and the child, through the elaboration of this and other symbolic connections, also expresses and develops its affective and intellectual potential.

The same complexity emerges if we follow how these early experiences spill over into their progressive socialization: in this instance, considering the different social contexts in which these experiences are rooted, the surprising element is that, whereas cultures vary widely in the characteristics of their eating habits, virtually all seem to attribute to them special importance in many family and social situations.

Eating habits — for instance, in the form of typical recipes and restaurants — often contribute to identifying the distinguishing features of many cultures.

In light of the complexity of the factors underlying collective life, in our work we wish to point out the mutual benefits of a more systematic collaboration between institutional economics and psychoanalysis in the study of economic and social issues: on one hand, institutional theory would benefit from considering psychoanalytic concepts, in order to help shed a deeper light on the psychological and more individual-based side of institutional dynamics; relatedly, on the other hand, psychoanalytic theory would benefit in its application to social issues from considering institutional concepts, in order to help clarify the institutional and more collective-based side of psychological dynamics. In this regard, the interaction between institutional economics and psychoanalysis may help us analyze the role of following interrelated issues in the formation of institutional, social and economic structures:

:


  • The evolutionary and conflicting role of individual and collective actions and motivations.

  • The evolutionary and conflicting nature of habits, routines, organizations, institutions and social valuing.

  • The evolutionary and conflicting nature of individual and collective decision-making processes.

  • The possibility of economic and social reforms, and the role of policies and social value in any given historical context.

This collaboration may greatly benefit from contributions provided by other disciplines as well. Indeed, we believe the issues of social sciences so complex and intertwined that co-operation between many disciplines becomes paramount for understanding their dynamics. In this respect, the fact that institutional economics shares important elements with historical analysis and with pragmatist and cognitive psychology constitutes an enriching element that can contribute to a more fruitful collaboration between these theories and psychoanalysis.


The work is organized as follows: in part 1 we will analyze some contributions provided by institutional economics by centring our attention on some aspects of Veblen's and Commons's theories; in part 2 we will outline some elements of the psychoanalytic approach and in part 3 we will focus our attention on the most debated aspects of Freud's theory; finally, we will analyze some ways in which the interaction between institutional economics and psychoanalysis could be realized.



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