Keeping Your Soul in Times of Economic Anxiety

These are anxious days in suburbia, and in fact throughout North America and the rest of the developed world.

As I write, the subprime mortgage crisis in the United States has mushroomed into a full-blown crisis.  Many of my American readers live in areas like Los Angeles County, where fully one third of house sales are now foreclosures, and there is fear that number is only going to escalate.  Having absorbed the news that, incredibly, the U.S. House of Representatives has refused to pass the $700 billion Bush-Bernanke-Paulson bailout legislation for financial institutions, the world waits, holding its breath, to see if the bill can somehow be amended into a form that the House will accept.  There is a perception on the part of many that, without some legislation of this kind of magnitude to shore up the financial sector, a disaster could ensue that would result in a credit freeze, strangling business and the economy.

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Things which a little while ago appeared so solid have seemingly come apart very quickly.  A survey of the media reveals that there is an atmosphere of panic or desperation that is just underneath the surface of daily affairs at the present time.  Fear is rampant.

I have no credentials as a commentator on the economy or the financial sector, and I could add nothing to the discussion of these issues from that point of view.  However, there are observations that I would like to make about the psychology of a time like this.

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The first of these concerns the power of mass psychology and the psychology of crowds.  Jung was very concerned lest people abdicate their individuality and be swept along by mass attitudes in times when strong emotions flow through societies — times like the present.  He warns of the dangers of this in “On the Nature of the Psyche”, CW 8 para 425:

 

If the subjective consciousness prefers the ideas and opinions of collective consciousness and identifies with them, then the contents of the collective unconscious are repressed.  The repression has typical consequences: the energy charge of the repressed contents adds itself, in some measure, to that of the repressing factor, whose effectiveness is increased accordingly.  The higher its charge mounts, the more the repressive attitude acquires a fanatical character and the nearer it comes to conversion into its opposite….  And the more highly charged the collective unconsciousness, the more the ego forfeits its practical importance.  It is, as it were, absorbed by the opinions and tendencies of collective consciousness, and the result of that is the mass man, the ever-ready victim of some wretched “ism.”  The ego keeps its integrity only if it does not identify with one of the opposites, and it understands how to hold the balance between them [italics mine].  This is possible only if it remains conscious of both at once.  However, the necessary insight is made exceedingly difficult … by one’s social and political leaders….  They all want decisions in favour of one thing, and therefore the utter identification of the individual with a necessarily one-side “truth.” [italics mine]….  Instead of knowledge one then has only belief, and sometimes that is more convenient and more attractive.

This is quite a dense paragraph, but I understand it to mean the following for our present time.

“The ego keeps its integrity only if it does not identify with one of the opposites, and it understands how to hold the balance between them.”  In our present situation, there seem to be two particular collective attitudes out there in our society that are truly divergent.

Firstly, there is the sense of panic.  What makes this particularly difficult to deal with, is the fact that, at times, this panic doesn’t come from the financially uninformed, but rather from some of those who are the best informed.  In a recent New York Times article which documents the events of Wednesday, Sept. 17 and Thursday, Sept. 18, Joe Nocera recounts the meltdown of the credit markets, and tells us that, with only a few exceptions,

 

Panic was spreading on two of the scariest days ever in financial markets, and the biggest investors — not small investors — were panicking the most. Nobody was sure how much damage it would cause before it ended.

 

It would seem that it was only through the steadfastness of a few cooler heads that panic itself was prevented from grinding the economy to a halt.  Human beings are social animals, and when an emotion like panic starts to spread through a social group, it is only with the greatest effort that we can avoid getting swept up in it.

Panic then, is one of the opposite attitudes to be avoided in the present situation, if you or I want to hang on to ourselves, to our soul, and not be swept away.  The other attitude to be avoided is a kind of nostalgic complacency that assures itself that everything is fine, and that things are the same as they always were.  This attitude can often be combined with a scapegoating of those whom we think of as creating the problem or crisis.  Depending on one’s political or social views, the target can vary from “Wall Street rich fat cats” to “those stupid people who live beyond their means” — or any of many other possibilities.  It’s then tempting to look at what is happening in the markets smugly, and interpret events as “it’s just the people who deserve it getting theirs” — and of course, it won’t really affect us, and we can just basically keep on doing what we’ve always done.

From Jung’s point of view, either of these two attitudes would be a true psychological disaster.  Somehow, without panic or complacent self-righteousness, we have to make a sober assessment about how to conduct our lives in the midst of rapidly shifting and changing conditions.  Just how we decide to do that will differ greatly from individual to individual.  The days ahead are definitely not going to be easy for any of us.  But if we can avoid the extremes, keep a balanced and open attitude, and not get swept into a herd mentality, we might just all get through this while still hanging on to our true selves.