ScienceDaily (Apr. 30, 2008) — Investors get carried away with excitement and wishful ‘phantasies’ as the stock market soars, suppressing negative emotions which would otherwise warn them of the high risk of what they are doing, according to a new study led by UCL (University College London). Economic models fail to factor in the emotions and unconscious mental life that drive human behaviour in conditions where the future is uncertain says the study, which argues that banks and financial institutions should be as wary of ‘emotional inflation’ as they are fiscal inflation.

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See also:

Mind & Brain

• Consumer Behavior
• Psychiatry
• Anxiety
• Disorders and Syndromes
• Relationships
• Psychology

Reference

• Inferiority complex
• Illusion of control
• Ego psychology
• Anger management

The paper, published in this month’s issue of the International Journal of Psychoanalysis, explores how unconscious mental life should be integrated into economic decision-making models, where emotions and ‘phantasies’ – unconscious desires, drives and motives – are among the driving forces behind market bubbles and bursts.

Visiting Professor David Tuckett, UCL Psychoanalysis Unit, says: “Feelings and unconscious ‘phantasies’ are important; it is not simply a question of being rational when trading. The market is dominated by rational and intelligent professionals, but the most attractive investments involve guesses about an uncertain future and uncertainty creates feelings. When there are exciting new investments whose outcome is unsure, the most professional investors can get caught up in the ‘everybody else is doing it, so should I’ wave which leads first to underestimating, and then after panic and the burst of a bubble, to overestimating the risks of an investment.

“Market investors’ relationships to their assets and shares are akin to love-hate relationships with our partners. Just as in a relationship where the future is unexpected, as the market fluctuates you have to be prepared to suffer uncertainty and anxiety and go through good times and bad times with your shares. You can adopt one of two frames of mind. In one, the depressive, individuals can be aware of their love and hate and gradually learn to trust and bear anxiety. In the other, the paranoid schizoid, the anxiety is not tolerated and has to be detached, so the object of love is idealised while its potential for disappointment is ‘split’ off and made unconscious.

“What happens in a bubble is that investors detach themselves from anxiety and lose touch with being cautious. More or less rationalised wishful thinking then allows them to take on much more risk than they actually realise, something about which they feel ashamed and persecuted, but rarely genuinely guilty, when a bubble bursts. Again, like falling in idealised love, at first you notice only the best qualities of your beloved, but when everything becomes real you become deflated and it is the flaws and problems that persecute you and which you blame.

“Lack of understanding of the vital role of emotion in decision-making, and the typical practices of financial institutions, make it difficult to contain emotional inflation and excessive risk-taking, particularly if it is innovative. Those who join a new and growing venture are rewarded and those who stay out are punished. Institutions and individuals don’t want to miss out and regulators are wary of stifling innovation. If other investors are doing it, clients might say ‘why aren’t you doing it too, because they’re making more money than we are’.”

‘Phantastic objects and the financial market’s sense of reality: A psychoanalytic contribution to the understanding of stock market instability’ by David Tuckett (UCL) and Richard Taffler (University of Edinburgh) is published in the April issue of the International Journal of Psychoanalysis.

This research was supported by the Leverhulme Trust. The Leverhulme Trust is one of the largest all-subject providers of research funding in the UK, distributing funds of some £40 million every year. For the full list of award recipients and further information about all the schemes that the Leverhulme Trust offers please visit their website at http://www.leverhulme.ac.uk.

Koro and the Castration Complex

Here is an in-depth analysis of a case of Koro in a Jordanian man (this is strange, because arabian societies do not generally experience penis panics)

http://www.emro.who.int/Publications/EMHJ/0503/21.htm

A 24-year-old single, male, Jordanian farmer was brought by his elder brother to the psychiatric outpatient clinic. He complained of a two-week history of difficulty in getting to sleep, apprehension, isolation, fearfulness and one night of strange behaviour. He asked for help to stop the shrinking of his penis and anxiously asked to have his genitalia checked. He was pulling at his penis to prevent it from being sucked into his pelvis. He had been kept awake the whole night with this condition.

The patient was the third of four brothers and had completed seventh grade education. His only medical history was surgery (orchidopexy) for torsion in the left testicle at the age of 19 years, after which he had become preoccupied by the idea that he might be infertile and that his manhood was defective. He had not sought medical advice about his fears.

A review of his sexual history revealed that the patient had heterosexual masturbational fantasies, had had no homosexual experience and his one sexual experience was with a prostitute 1 month prior to the onset of his symptoms, after which he was left feeling guilty and embarrassed. His brother described him as shy, sensitive and dependent, with a small social circle. The family had no history of psychiatric illnesses.

Physical examination, including the genitalia, was unremarkable and showed no clinical signs of organicities. The patient was bewildered, sweating, tremulous and caught restlessly at his crotch. He was convinced that his penis was gradually shrinking and would disappear into his abdomen. In great fear he stated that he preferred death to such a fate. There were no psychotic features. He was of average intelligence and brain magnetic resonance imaging was normal.

He was diagnosed as having a generalized anxiety disorder and panic. He was treated as an outpatient with the following medications:

• imipramine: 25 mg/day gradually increased to 75 mg/day over 3 weeks;

• alprazolam: 1 mg/day taken as 0.5 mg tablet twice daily.

In addition, he was given supportive psychotherapy and behavioural therapy.

He was asymptomatic in 3 months and at a 10-month follow-up he was completely back to normal and had ceased taking medication.

Discussion

Sporadic cases of Koro-like syndrome have been reported in non-Chinese cultures and countries other than China and South-East Asia (European, African, North American, Middle Eastern countries and India) [2,6].

These cases were usually part of, or accompanied by, variant disorders [2,7,8,9] and almost all were a non-classical, incomplete form of the syndrome (as in the case of this patient, because rather than being in fear of impending death, he preferred death to the disappearance of his genitals).

Despite a cultural heritage in Jordan that believes in ghosts and demons, and in their power to manipulate and influence behaviour (occasionally including sexual potency and the ability to inflict harm), these ghosts are not believed capable of taking away a person's genitals. Generally, Arab culture has little relation to Chinese and South-East Asian cultures, particularly in this type of belief.

In this case the patient was preoccupied with a misconception about his fertility and sexual potency after his testicular operation. Added to this were his feelings of guilt after a sexual contact with a prostitute. It is presumed that the symptoms were an expression of his premorbid sexual status and experience [3,5].

Koro seems to be an obvious manifestation of castration anxiety, perhaps the most obvious one. Although castration anxiety is the end of the Oedipus complex, it can bring powerful neuroses of its own. High neuroticism and anxiety are complementary, hence the curative effects of anti-anxiety medication for Koro. Guilt also relates to the anxiety-neurosis matrix. Neurosis is fed by a sort of libidinal horse-trading between the id and superego - in cases like this where strongly taboo id drives are gratified, they might have to pay recompense in the form of intense castration anxiety. Penis panic may have been the first thing that Freud really nailed - Schreber certainly seemed to suffer. The shift from the 19th to the 20th century in the west marked the end of evident, out in the open penis panic. Now, as the Baraboo editorial suggests, we handle our penis panic by voting and being assholes.

Crews at it again

Here's a marvelous piece of abject dishonesty from everyone's favorite Freud-denier Fred Crews:

"One rational way of judging whether Freudian propositions have found empirical support might be to bypass the print wars between Freudians and anti-Freudians and simply look at the research being done in academic psychology departments. A recent citation study (by Robbins et al.) found that, for several decades now, the major journals of the field have completely ignored all psychoanalytic claims. Nor, I believe, can you find a single course, in the psychology department of any reputable American university, that treats Freudianism as anything other than a historical curiosity."

First, let's note that he adds the bizarre and parochial qualifier 'American'. This should not be read as an assertion that serious psychology is only done in America (at least, I hope not) but rather as an attempt to add a grain of plausibility to an otherwise preposterous statement. After all, British universities like London, Sheffield, Essex and so forth all have specifically Psychoanalytic clinical certification programs and, in the case of U. London an endowed Sigmund Freud professorship.

Second, let's assume that by 'American' he means 'in the United States of America'. Canadian and Argentine Universities, for two, are frequently psychoanalytically oriented. Mariano Ben Plotkin has written a book about the reception of Psychoanalysis in Argentina which concludes that not only clinical psychiatric practice but all aspects of Argentine life have been given a deep-seated psychoanalytic bent.

Third, even giving him this, we find that he is utterly incorrect. Not only do several US schools actively promote Psychoanalysis, but about a quarter of the teaching faculty in Psychology at UC Berkeley (where Crews is a prof. Emeritus) identify as Psychoanalysts.

As for the citation study, since Crews neglects to identify it with anything other than the lead author's name, I can't find it, but I would like to know exactly which 'psychoanalytic claims' he is talking about, and the extent to which they actually are 'ignored'. In any case, this is question-begging. Empirically-minded psychodynamically-oriented scholars are quick to acknowledge that their claims are not widely credited by the heavily CBT dominated Psychological establishment, but they argue (in some cases convincingly) that the latter has actually validated their claims through studies that don't make any refernce to psychoanalysis whatsoever (like the construct validity of Rorschach tests compared to the MMPI)

Crews makes another obnoxious and patently false assertion with regards to the neuro-Psychoanalyst Mark Solms:

"What Mr. Guterl neglected to mention was that Solms is a psychoanalyst, an editor of Freud's writings, an official of the Anna Freud Centre, and an ardent public advocate whose views about psychoanalysis-&-dreaming are by no means shared by his scientific colleagues, who find them amusing at best. On a deeper level, Mr. Guterl failed to understand the point I have made above: that resemblances between a given phenomenon--e.g., dreaming--and a given theory in no way constitute a triumph for the theory. (Guterl and I had a civil correspondence about this.)"

Since Crews carefully and typically provides no documentation for the claim that Solms' colleagues find his Psychoanalytic bent 'amusing at best', I am not sure precisely what he is referring to. However, I do know that Solms is a founder of NeuroPsychoanalysis, a journal whose editorial board includes Eric Kandel, Antonio Damasio and various other luminaries. One is left to wonder whether such figures would waste their time and energy to support a project they regard with bemused detachment.

And More

http://www.wz.nrw.de/Neuro2005/Dokumentationen/TURNBULL%20FORMATIERT.pdf

Dreams
A final, rather striking, example of the re-discovered role of emotion is in the field
of sleep and dream research. When REM sleep and its near-perfect correlation with
dreaming were discovered in the 1950s, and the related brain-stem mechanism
discovered in the 1970s (Hobson and McCarley, 1977), Freud’s (1900) dream theory
appeared to lose all scientific credibility. However, more recent research has revealed
that dreaming and REM sleep are doubly dissociable states, controlled by distinct (but
interactive) brain mechanisms (Solms, 1997). Dreaming turns out to be generated by a
network of forebrain structures centered principally around ascending dopamine
systems (see Solms 1997, 2000 for review).

Importantly, dreaming stops completely when fibers in the ventromesial frontal lobes
are severed, after lesion to exactly the same brain region as that targetted in pre-frontal
leucotomy. This is, of course, the same system that mediates powerful positive
emotions (Panksepp, 1998), and is also centrally implicated in hallucinations and
delusions that share many formal features with dreams (Silbersweig et al, 1995). The
landscape of dreaming research, especially as regards emotion, has radically changed,
and it would appear, based on modern findings, that Freud’s classical has much to
recommend it.

This opens the fascinating possibility that emotion may play a generative role in all
classes of false belief states: from dreaming in the neurologically-healthy, to changes
seen after focal brain lesions, and also encompassing the pharmacologically-sensitive
disorders that are central to the several psychiatric states with delusional features. The
empirical foundation for such a grand claim remains limited, but it offers the prospect
of a tempting unification of findings across wide domains.

Ask and it Shall be Given

Critics of psychoanalysis often ask for one, just one prediction made by Freud that has received confirming empirical evidence.

B13 1992: There is a parallel of the CCRTs about the therapist with the CCRTs about other people.

A necessary and expected parallel is based on Freud's (1912) central clinical observation about the transference template: the patterns that become expressed to the therapist have parallels with the pattern that is expressed to other people. Now, for the very first time, this parallel has been empirically shown for 35 patients from the Penn Psychotherapy Project between the CCRT for relationships with others and the CCRT for relationships with the therapist (Fried, Crits-Christoph, & Luborsky (1992).

The broader issue of the consistency of themes across different types of people, such as father versus mother, has been examined by Frevert et al (1995). This broader topic is basic to the CCRT because of the partly research-supported clinical expectation that narratives about different types of people will show some common themes across the different types of people.

They can feel free to thank me (and google, which actually turns this piece up on the first page for a search of empirical + transference) later.