Current psychoanalytic thinking reflects important differences concerning external reality. It is absent from the theories of the hermeneuticists, and it is excessively present in self psychology. Those treating victims of “real” trauma frequently believe that psychoanalysis is not appropriate for their patients. This has led to the unacceptable separation of individuals: those who are traumatized and those who are neurotic. I believe that a review of the role of external reality in psychic functioning is overdue, and the present work is an attempt to reassess our knowledge of this important dimension and to find its proper place in psychoanalysis.