Discussion of Henry Krystal's Article, A Psychoanalytic Contribution to the Theory of Cyclicity of the Financial Economy

As one who welcomes efforts to apply psychoanalytic insights to social and political problems, I read Dr. Krystal's article with great interest and, I think, a sympathetic feeling for the difficulties involved. Certainly he is correct in arguing that the psychological side of economic behavior has been neglected, or, rather, subsumed in the classical model of economic man as rational man. (Incidentally, prevailing behavioral models in political science also tend to be rationalistic.) And it is clear that all kinds of psychologies influence stock market behavior, including those characterizing relations between brokers and clients, economic consultants and corporate leaders, Johnson and DeGaulle, etc. No doubt much more needs to be known about these psychologies if we are to understand adequately why the economy is so sensitive to rumors that the President, for example, is in ill health, or that there are new troubles in Kashmir.

But an important question is whether substantial insight into stock market behavior can be gained from the case history presented by Dr. Krystal, or from any single case history. To what extent is his patient typical of investors and speculators, and even if typical, to what degree do such individuals significantly affect trends as against the influence of institutional investors, Federal Reserve Board, and so forth? What evidence is there for the “fact” that “many other people shared his need to lose money and to 'tighten their belts!”? While it is probably true that in America making and spending money arouses guilt as a consequence of the Puritan ethic, I should have thought that this factor in our national character

had considerably diminished in the last three decades as a consequence, at least in part, of rising affluence and the advertising insistence on the good life. Does anyone doubt that losing money arouses much more anxiety and guilt than making it, notwithstanding our absolute conviction as a religious nation that the poor en