Viennese Zeitgeist and the Economics of Sigmund Freud and the Psychology of Austrian Economics

In 1915 Sigmund Freud labeled one of his metapsychological points of view the “economic” (okonomischen) standpoint (Freud, 1915A). He had earlier identified the term “economic” with the quantitative aspects of his developing theory (Freud, 1887-1902), and he periodically used it in a variety of contexts. It is not clear why Freud chose this term to characterize an aspect of his theory. Freud never offered an explanation nor is there any definitive one in the psychoanalytic literature. That the question has never seriously been raised probably reflects the fact that psychoanalysts and economists no longer read one another's literature.

Suggestions have been made by Riesman (1950), Rieff (1959), and Erikson (1955) that Freud was influenced in some Zeitgeist manner by the economics of the time which emphasized the maximization of pleasure or profits in a world of scarcity. There are striking similarities and a fundamental consistency between the early ideas of Freud that developed into his economic viewpoint and the highly distinctive model of individual economic behavior that emerged from the Austrian universities about the same time. It is as if Freud wished to recognize the consistency and make use of the original and unique contributions of the “new” Austrian economists of his day.