Our work on the development and treatment of sadomasochism and its organizing omnipotent beliefs has led us to suggest that there are two distinct kinds of conflict resolution and self-regulation. One, the open system, is attuned to reality and is characterized by joy, competence, and creativity. The other, the closed system, avoids reality and is characterized by sadomasochism, omnipotent beliefs, and stasis. This article places the two-systems model in the framework of single- and dual-track psychoanalytic descriptions of development. We suggest that a dual-track, two-systems model is consistent with Freud's vision of psychoanalysis as a general psychology, as it can encompass both pathological and normal choices throughout development and oscillations between them. Some technical implications of a two-systems model are discussed in relation to the therapeutic alliance. Applications to work with patients of all ages and the parents of child and adolescent patients are included.