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This paper describes the utility of the theory of mental economics (Freud, 1900) in explaining the phenomena that occur in the functional and organic psychoses. Wish (grandiose) delusions and thought disorders are the phenomena selected as illustrative. The paper also gives an account of how the pleasure principle provides the basis for a theory of psychopathogenesis. The viability of the economic theory is discussed. It is contrasted with the psychopathological theories of Klein, Fairbairn, and Kohut.