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In the Preface of David Tuckett's book, Minding the Markets, he asks the question, can the financial crisis of 2008 be attributed to ‘greed, corruption, trade imbalances, regulatory laxity and panic’? He believes that none of those descriptions can offer a satisfactory explanation because what has been left out is any understanding of the role that emotions play in all human behaviour. With that thought in mind he sets out to explore the way in which a psychoanalytic understanding might bring about change in the way the money markets could regulate themselves. Tuckett draws upon interviews that he conducted during 2007 with asset managers around the globe. He brings this evidence to bear upon his thesis that unregulated financial trading brings in its wake emotional states of mind in the asset managers that are not conducive to prudential financial behaviour.
Tuckett introduces three psychological concepts, taken from Klein and Bion, the ‘phantastic object’, ‘groupfeel’ and the ‘divided state’. The ‘phantastic object’ is a mental representation of a much desired object, initially the mother and the mother's body. The ‘divided state’ derives from the Kleinian model of the earliest mental state of the infant in which there is a representation of the good mother who feeds it and the bad mother who frustrates it, or the paranoid-schizoid position. ‘Groupfeel’ is taken from Bion's theory about work groups and basic assumption groups in which the individual fears being questioned or criticized by the group.
To take an example from the tulip bulb frenzy in the 17th century; there is an excited desire for the tulip bulb which excludes any criticism of its real value and so desire becomes a ‘phantastic object’ that must be possessed. The desire is augmented by a ‘groupfeel’, an enormous group pressure to buy this ‘phantastic object’. In reality the emotional desire for the Tulip Bulb has little to do with value, for the asset managers are operating with a ‘divided state’ of mi