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Can democratic institutions contain conflict, division, and uncanny emotions with cultures of management that are frequently undemocratic? What distinguishes those institutions and organizations capable of containment from others? And, what are the psychodynamics at work in the perversion of democratic processes inside organizations? In this paper, we explore the psychodynamics of democracy in the workplace with a particular focus on unconscious and collusive forms of perverting democratic processes at work. We suggest that interpersonally and collectively the dialectical interplay between (1) autistic-contiguous, (2) paranoid-schizoid, and (3) depressive modes of experience and organized perceptions, which are necessary to the containment of divisions and conflicts in democratic organizations, is vulnerable to stress, anxiety, and psychological defenses that foster regression and collapse into more oppressive, authoritarian, and sadistic political cultures. With the objective of understanding perversions to democracy in the workplace, we find that a contemporary psychoanalytic view of organizations is more instructive than mainstream organization theory or that found in Foucault's writings on power and institutions.