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Diogo Gonçalves
Diogo Gonçalves

Neoliberalism Viewed From the Couch

Insights about economics gathered from a psychoanalyst’s couch

Economics viewed from the couch.

Paul Verhaeghe is a psychoanalyst and writer. That wouldn’t make him exceptionally different from other psychotherapists if his last book wasn’t about Economics, but it is.

Economics? Well, to be more precise, the book is about the current western socio-economic system—Neo-liberalism—and the effect it is having on our minds and bodies. Thirty years of neo-liberalism, free-market forces, privatisation, and the resulting impact in individual identity are carefully discussed and analysed within.

What about me? It's a delightful book that gives us unique insights about economies and societies, gathered through the most unlikely research method—a psychoanalyst’s couch.

Q: Why did you write this book?

A: That is a long story... It goes back to the late nineties, when I realised that there had been a huge shift in our clinical praxis. Instead of just the classic neuroses, we were confronted with huge numbers of depression and anxiety problems. The nature of these problems was also different; I understood them as actual pathology, as opposed to psychoneurotic problems. In the same period, we saw, in psychiatry, the rise of personality disorders—meaning disorders of identity. I combined these two things, and asked myself what the reasons were for this shift. It took me a number of years and lots of studying before I understood that our identity had changed because of a shift in our society; and that this change caused different disorders. Our society has become a neoliberal one, with lots of psychological fall-out. The more I studied, the more that became obvious. This book is the result.

Q: Interesting... that reminds me a bit of the work of the sociologist Émile Durkheim, who showed that the rates of suicide depend on the way societies are structured. What is it about neoliberal societies that can prevent us from leading meaningful lives, and can cause identity disorders?

A: First of all, an important remark: there are many psychosocial health indicators (teenage pregnancy, domestic violence, anxiety and depression, drug abuse, school drop out rates, etc.) that correlate with neoliberalism, but suicide rate is not one of them—at least not convincingly. To answer your question, I can refer you to the studies of Wilkinson and Pickett. They discovered that the rise in income inequality in a country, a region, or even a city correlates significantly with most psychosocial health indicators. The rise of income inequality is a typical feature of a neoliberal society.

If we consider the consequences of neoliberalism on a more psychological level, it is not too far fetched to say that neoliberalism turns us into competitive individualists. If you combine that with an economic meritocracy, you create a system of winners and losers, on an individual level. The step towards loneliness, anxiety, and depression is very small in such a binary system. Generally speaking, such a system makes us unhappy because we are social animals, we need one another, and we thrive in groups. This economic system goes against that crucial aspect.

Q: In your book you give us a good introduction to the origins of neoliberalism, before building the argument that neoliberalism acceptance had a very negative impact in our societies and institutions. Can you tell us upon which foundations this ideology stands up, and why it's still so appealing to governments and countries all over the world?

A: If you want to study the history of neoliberalism, there are a number of good books on the subject. Basically, it goes back to Ayn Rand and her followers (amongst them: A. Greenspan) and the so-called ‘Chicago boys’ of Milton Freeman. For me, the most important thing about its foundation is the obvious link to social Darwinism. In this pseudoscientific ideology, ‘survival of the fittest’ is interpreted as survival of the strongest, giving the strongest individuals a supposedly scientific endorsement for their unethical behaviour. The second foundation sounds more positive, i.e. the idea that a human being's life is not totally predetermined and that he or she can make choices. Unfortunately, this idea has been translated into a moral obligation: everyone has to make those choices that turn his life into a professional success; moreover, these choices depend solely on his or her personal efforts. This is the neoliberal version of the American Dream. An American colleague asked me once if I knew why they call it the American dream. The answer is that you have to be asleep to believe in it. As an ideology, neo-liberalism is very seductive for governments, because it permits them to get away with a number of undemocratic decisions. Their justification combines a pseudo-scientific reasoning with the idea that “there is no alternative”. Obviously, there are alternatives. Iceland is a political example; Semco (a Brazilian multinational) and Mondragon (Spanish) are very successful economic examples.

Q: In one of the chapters of your book—The Enron Society—you assert that our identities have always been embedded in religious, ethical, and social structures. You argue, however, that this is no longer the case with neo-liberalism, where even the state subordinates to the supposedly “free” market. What are the distinctive features of the alternatives (or any individual alternative) that you mention? And why would they benefit individuals and societies?

A: Neoliberalism has all the characteristics of a totalitarian discourse without being a political regime. It is so totalitarian that it has even consumed politics—our politicians are obeying the dictates coming from the financial world. As a totalitarian discourse, it has taken over education, health care, art—it is very hard to escape from it. It's ‘The Invasion of the Body Snatchers’ (an old movie) all over. But it contains a basic flaw, and today, that flaw is causing a turn towards new discourse. The result of neoliberalism is that it sets us apart; it obliges us to become competitive individuals and only competitive individuals. Of course, humans are competitive, but we should not forget that we are also social. We need a group to feel good. The mantra of neoliberalism, put forward by Thatcher, says exactly the opposite: ‘There is no such thing as a society, there are only individuals’. Well, that idea has reached its limit; people are looking for new ways to set up groups. These groups are organizing themselves in a more cooperative way, meaning that both the individual and the community thrive. Think of the transition movement, think of deliberative democracy (Fishkin).

Q: What do you think about the name of this blog ("There are Free Lunches")?

A: I am not familiar with the blog, so it is hard to give an opinion on something that you do not know. I am familiar with the original expression (there are NO etc). In my experience the best lunches are the ones that we share with other people, and at that point, money doesn’t matter.

About the Author
Diogo Gonçalves

Diogo Gonçalves is a Ph.D. candidate in Economic Psychology, Judgment and Decision Making at the Tilburg Institute for Behavioral Economics Research at Tilburg University.

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