Sigmund Freud's theory of conflict posits that mental illnesses like neuroses are caused by irreconcilable internal conflicts between parts of the psyche, like the id, ego, and superego. A psychoanalytic treatment aims to help patients become aware of these underlying conflicts by analyzing their symptoms and how the conflicts are expressed and repeated in the transference relationship with their analyst. Identifying and working through these psychic conflicts in treatment can help resolve patients' neuroses by allowing them to metabolize and integrate the repressed traumatic experiences and libidinal desires that were at the root of their symptoms.

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CLINICAL NOTES SERIES
ON THE PSYCHOANALYSIS OF CONFLICT
for
Governor Mark Carney, Bank of England
Humberto Nagera and Alice Colonna (1970). ‘Freud’s Theory of Conflict,’ Basic
Concepts of Metapsychology, edited by Humberto Nagera (London: George Allen and
Unwin), Hampstead Clinic Library, pp. 97-112.
Keywords: Bank of England; Ben Bernanke; Mark Carney; Conflict; Federal Reserve; Financial
Crisis; Sigmund Freud; Post-Traumatic Disorder; Psychoneuroses; Stability; Stabilization; Stanley
Fischer; Macro-economy of the Symptom; Transference Neurosis; War Neuroses; Janet Yellen.
INTRODUCTION
What is conflict? And, why did Sigmund Freud argue that it could serve as the cause
of the neuroses? This conceptual essay by Humberto Nagera and Alice Colonna is
an attempt to delineate the different uses of the term ‘conflict’ in Freudian meta-
psychology.1 It is important to remember that before Freudian psychoanalysis came
along, the neuroses were thought to be determined by somatic factors like ‘heredity
and degeneration.’ In other words, the search for natural causes for all illnesses in
the history of medicine made it difficult to recognize that nurture played as
important a role as nature in mental illness. That is why the neuroses cannot be cured
with medication. The division of labour between psychiatry and psychoanalysis can
also be understood as sorting patients into those whose illness has or does not have a
somatic cause. Those illnesses which have a somatic cause are usually taken up in
neurology and psychiatry. The rest require an understanding of the part played by
repressed conflicts in the subject’s psyche. This conceptual essay then is an attempt
1 See also Ernest Jones (1948, 1977). ‘Repression and Conflict,’ What is Psychoanalysis?
(Westport, CT: Greenwood Press), pp. 34-40. Jones enumerates the most commonly used ego
defenses to manage conflict within the psyche.

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to explicate the causative function of libidinal conflicts in the theory and practice of
psychoanalysis. It is important to remember that conflicts are not inherently bad.
Every individual is subject to conflicts. What Freud focuses on are situations in
which the subject is not able to metabolize the conflicts without the production of
symptoms. If the individual is able to work-through conflicts without seeking
recourse to medical help, then, he is for all practical purposes deemed to be
‘functional.’ So, in that sense, the difference between the ‘neurotic’ subject and the
‘normative’ subject is a difference of degree and not a difference of kind. Anybody
can go through a neurotic phase or throw up neurotic symptoms every now and
then depending on the levels of stress that he or she is subject to in his personal or
professional life. The main takeaway in Freud’s approach to the neuroses is that the
psyche is not static; it is a ‘dynamic’ entity that is always working-through conflicts
of which it may not be fully conscious. The main task of analysis then is to acquaint
the patient with these psychic conflicts by interpreting the ‘presenting symptoms’ in
the first instance; and the ‘transference neurosis’ that emerges subsequently in the
attempt to interpret the presenting symptoms in the analysis. What this means is
that the psychoneurosis cannot be accessed directly. Instead, the analyst and the
patient infer the structure of the underlying neuroses from an examination of the
transference neurosis onto which the patient ‘displaces’ affects and signifiers from
his childhood. The mnemonic barrier that makes it difficult to recuperate the original
form of the neurosis is known as ‘infantile amnesia.’ The reconstruction of the
neurosis proceeds then by correlating the history of each individual symptom within the
contexts of the transference neurosis. If there is a ‘mutation’ or ‘modification’ in the
structure of the symptom; then, it probably means that the analytic reconstruction is
valid. This clinical determination of validity is a consequence of the fact that the
analyst’s interpretation resonates in the unconscious of the patient. If the interpretation
does not resonate; or produce fresh material for analysis, it probably means that the
interpretation is wrong.2
‘STABILIZING’ THE PATIENT
What all interpretations have in common however is the need to delineate conflict.
The main reason for conflicts is the fact that the psyche is split between different
agencies like ‘the id, the ego, and the super-ego.’ Each of these agencies has a
different agenda. The id, for instance, seeks the immediate gratification of the
instincts; the ego however is more concerned with the need for self-preservation. The
2 See Sigmund Freud (1937, 1963). ‘Constructions in Analysis,’ Psychoanalytic Clinical
Interpretation, edited by Louis Paul (London: The Free Press of Glencoe), pp. 65-78. See also
Bruce Fink (2014). ‘Interview: A Psychoanalyst Has to Speak Like an Oracle,’ Against
Understanding: Commentary and Critique in a Lacanian Key (London and New York:
Routledge), Vol. 1, pp. 217-225.

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reckless pursuit of instinctual gratification will lead to danger in the external world;
the task of the ego then is to moderate the expression of the libidinal instincts. This
moderation is shaped by the cultural norms and mores of a given society. The locus
in which these norms and mores are represented in the psyche is the super-ego.
Neuroses then represent irresolvable conflicts between the id and the ego; or the ego
and the super-ego. The psychoses however represent conflicts between the ego and
the external world. All conflicts represent danger beyond a point because it could
spin out of control and activate the death instincts of the patient. The defences of the
ego attempt to manage the neuroses and the psychoses in such a way that by partial,
temporary, or permanent withdrawal of libidinal cathexes, they make it easier for
the patient to cope with the demands of the inner world and the outer world.
Needless to say, the activation of the unconscious is in the structural ‘gap’ between
the inner world and the outer world; and in the gaps between the three agencies that
constitute the structure of the psyche. When a patient is described as ‘stable,’ it
means that he is able to manage the activation of the unconscious on his own. When a
patient has to be ‘stabilized,’ it means that he needs an ‘intervention’ from the locus
of the clinical Other when the constitutive gap in his psyche makes itself known to
his consciousness. The main difference between psychiatry and psychoanalysis then
is this. Psychiatry uses tranquilizers to calm the patient when he encounters the gap
in his psyche; it is therefore known as ‘suppression’ therapy. Psychoanalysis allows
the patient to talk about the gap; it is, then, to put it simply, a form of ‘expression’
therapy. But, in both cases, what is intolerable to the patient is the existence of
endemic conflicts which he cannot resolve on his own. The persistence of the conflict
then becomes a source of internal trauma that the patient cannot escape from except
through forms of repression. Suppression therapies bury the trauma even deeper
into the patient’s psyche. Expression therapies however try to dig out the trauma in
order to talk it away.3 That is why analysis has been compared to ‘chimney
sweeping’ or described as the ‘talking cure.’4 The mutations that occur in the
structure of the symptom when the patient talks about it is proof that they have a
3 See, for instance, Karl Menninger (1966). ‘Treatment,’ The Human Mind (New York: Alfred
A. Knopf), pp. 363-416. See also the papers in H. Tristam Engelhardt, Jr. and Stuart F.
Spicker (1978). Mental Health: Philosophical Perspectives (Dordrecht-Holland and Boston, USA:
D. Reidel Publishing Company), passim.
4 The reference to ‘chimney sweeping’ as a figure of speech for psychoanalysis occurs twice
in Sigmund Freud and Joseph Breuer (1893-95,1974). Studies on Hysteria, translated by James
and Alix Strachey, edited by Angela Richards (London: Pelican Books), Vol. 3, Pelican Freud
Library, p. 83 and p. 348; and Joseph Schwartz (1999). ‘Hysteria and the Origins of the
Analytic Hour,’ Cassandra’s Daughter: A History of Psychoanalysis (New York and London:
Penguin Books), pp. 40-62. See also Colin McCabe (1981). The Talking Cure (London:
Macmillan).

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meaning in the unconscious which must be surfaced and worked-through for
therapeutic relief. The three aspects of this clinical process are known as
‘remembering, repeating, and working-through.’5
HISTORY OF THE SYMPTOM
The patient must try to identify the origins of the symptom and work-through its
ideational content and affects on the couch. If he doesn’t do so, then, there is a
possibility that he will repeat the trauma within the transference neurosis; or act it out
in everyday life without a conscious awareness of what he is doing.6 That is why the
Freudian theory of conflict is important. The analysis will not make headway merely
by identifying the symptoms or simply in the recollection of traumatic moments
within the anamnesis of the patient. What is really at stake in terms of clinical
intervention is to be able to identify the underlying conflict that the symptom seeks
to mask from the patient’s conscious awareness. In other words, a neurosis is
basically a defence against ‘incompatible’ ideas in the psyche; these ideas invariably
have some libidinal content. That is why the patient puts up a lot of ‘resistance’
when asked to say whatever comes to his mind in the act of ‘free-association.’
Instead the patient finds that his reluctance to speak up has something to do with the
personality of the analyst. This is because the patient has transferred signifiers and
affects pertaining to the repressed onto the analyst. Once this is done, the patient
justifies his reluctance to speak up by telling himself that it might spoil relations with
the analyst.7 It is important to remember that it is not necessary for the patient to tell
the analyst all the details of his life. This would make the period of analysis longer
than the total lived experience from which the patient draws his material. What is
really required is to identify the signifiers and affects that instigate the animating
conflict, the repressed content in the unconscious, and the primal phantasies that
constitute the neurosis. Nagera and Colonna point out that many neurotics might
have been in good health until the actual advent of the neurosis. In other words,
there is usually a traumatic encounter that resists metabolic incorporation into the psyche.
Furthermore, the trauma does not emerge immediately. The activation of the trauma
depends on encountering another ‘event’ that bears a significant resemblance to the
5 See Jean Laplanche and Jean-Bertrand Pontalis (1973, 1988). ‘Working-Through,’ The
Language of Psychoanalysis, translated by Donald Nicholson-Smith, introduction by Daniel
Lagache (London: Karnac Books), pp. 488-489.
6 See Charles Rycroft (1968, 1995). ‘Acting Out,’ A Critical Dictionary of Psychoanalysis
(London: Penguin Books), pp. 1-2.
7 For the origins and the role played by free-association in the history of psychoanalysis, see
Paul Schimmel (2014). ‘Through Suggestion to Free Association,’ Sigmund Freud’s Discovery
of Psychoanalysis: Conquistador and Thinker (London: Routledge), pp. 45-60.

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earlier event. The trauma that leads to a neurosis then is constructed retroactively due
to the ‘diphasic advent of sexuality’ in the human subject that is mediated by a
period of latency (which serves as a necessary form of gestation).8 During the long
period of gestation, the conflict is either forgotten; or not pathological enough on its
own to bother the patient. The ‘retroactive construction of the trauma’ however
threatens to bring the patient to libidinal awareness of what is unconsciously
bothering him. This activates the mechanisms of secondary repression; which, if
ineffective, can plunge the patient into a full-fledged neurosis that prompts him to
seek a clinical analysis. Nagera and Colonna explain the different forms in which the
return of the repressed trauma can generate symptoms in ailments like hysteria,
obsessional neurosis, and paranoia. Each of the any number of symptoms in these
mental afflictions is a disguised representation of the traumatic repressed. The clinician
therefore needs to be aware of the main forms of distortions by doing a frequency
analysis of symptoms; and also learn to relate symptoms to clinical structures. It is
not uncommon for hysterics to have obsessional symptoms and vice versa.
THE WAR NEUROSES
It is also important to remember that symptoms usually affect the vital functions of the
subject. They are mainly animated by the existential concerns of ‘life, sexuality, and
death’ insofar as they are mediated by the oedipal matrix within any given kinship
system. In other words, sexual reproduction in humans (unlike asexual reproduction
of unicellular organisms) is invariably the locus of the neurotic conflict. That is why,
for Freud, psychosomatic impotence in men, frigidity in women, and neurasthenic
forms of masturbation are the important libidinal prototypes of psychoneurotic
symptoms.9 A clinical practitioner therefore needs to be acquainted with a range of
symptoms for each of the main neuroses; but, remember not to conflate the
symptoms with the neurosis. The presenting symptom may become less important
as the analysis proceeds further; it is not necessarily the same as the neurosis.
Furthermore, in order to identify the underlying neurotic conflict, the clinician must
be on the lookout for the fantasy that accompanies the symptom. As previously
mentioned, the conflict can be with an internal authority or with an external
8 Sigmund Freud (1905, 1910, 1991). ‘The Period of Sexual Latency in Childhood and its
Interruptions,’ On Sexuality, translated by James Strachey, edited by Angela Richards
(London: Penguin Books), Vol. 7, Penguin Freud Library, pp. 92-95.
9 See Bruce Fink (2014). ‘Freud and Lacan on Love: A Preliminary Exploration,’ Against
Understanding:Casesand Commentary in a Lacanian Key (London and New York: Routledge),
Vol. 2, pp. 131-147. See also Sigmund Freud (1991).‘Contributions to the Psychology of Love
I, II, and III,’ On Sexuality, translated by James Strachey,edited by Angela Richards (London:
Penguin Books), Vol. 7, Penguin Freud Library, pp. 227-283.

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authority. In either case, the way the patient relates to his parents and early
caregivers is an important clue to whether or not they were able to successfully
interpellate him within the kinship system that they represent.10 Adolescent rebellions
amongst the young constitute failures of interpellation on the part of parents. They
are instances when the young refuse to identify with the values of their parents.
Failures of oedipal interpellation; or the inability to resolve the Oedipus complex,
might also lead to forms of ‘neurotic exogamy’ in order to prevent an open conflict
on the part of the patient with his parents in matters pertaining to object choice.11
Freud identifies an element of conflict in both the psychoneuroses and in the war
neuroses (that are caused by shell-shock). In the war neuroses, the patient’s psyche is
split between two forms of the ego ideal. In Freudian meta-psychology, neurotic conflicts
have both a clinical and an existential dimension. So, for instance, what is at stake is
the endemic conflict between ‘the forces of life’ and ‘the forces of death.’ This
becomes obvious in the ‘war neuroses’ because the exposure to all the killing and the
blood-shed activates the aggressive instincts which the forces of civilization repress
in everyday life.12 In contemporary parlance, these forms of neuroses are referred to
as ‘posttraumatic stress disorder.’13 A common theme in films made in the wake of
the American involvement in the two world wars and Vietnam show the difficulties
experienced by veterans in adjusting to civilian life. These are all cinematic instances
of the trauma induced by the war neuroses. The best known of the symptoms in
contention in these war neuroses include ‘flashbacks’ (at night from the scene of
battle) leading to chronic insomnia and acute attacks of anxiety. War neuroses only
make ‘explicit’ the element of conflict that has to be searched for carefully in the
psychoneuroses. An examination of the war neuroses reveals, once again, that inside
every veteran there is an internal conflict which symbolizes the external conflict that
10 See Anne Dunand (1996). ‘Lacan and Lévi-Strauss,’ Reading Seminars I and II: Lacan’s
Return to Freud, edited by Richard Feldstein et al (Albany: SUNY Press), The Paris Seminars
in English, SUNY Series in Psychoanalysis and Culture, pp. 98-108.
11 See Klaus Theweleit (1990, 1994). Object-Choice: On Mating Strategies and a Fragment of Freud
Biography (London and New York, Verso).
12 For more on this theme, see Laura Sokolowsky (2013).‘The First Center for Psychoanalytic
Consultation,’ We’re all Mad Here, edited by Jacques-Alain Miller and Maire Jaanus,
Culture/Clinic, Vol. 1, Applied Lacanian Psychoanalysis (Minneapolis and London:
University of Minnesota Press), pp. 169-182. For Freud’s comments on war and civilization,
see Sigmund Freud (1991). Civilization, Society and Religion, translated by James Strachey,
edited by Albert Dickson (London: Penguin), Vol. 12, Penguin Freud Library, passim.
13 For a psychiatric description, see ‘Posttraumatic Stress Disorder,’ Diagnostic and Statistical
Manual of Mental Disorders (DSM-IV),Fourth Edition (New Delhi: Jaypee Brothers, 1994-95),
American Psychiatric Association, pp. 424-429.

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he previously encountered in the battle field. The preoccupation with ‘conflict,’ then,
is what psychoanalysis shares in common with military psychiatry.
MACROECONOMY OF THE SYMPTOM
It could also be the case that while the psychoneuroses have a greater libidinal
element than the war neuroses, those patients who would have remained normal
come down with a psychoneurosis in the libidinal sense because of the stress
induced by the trauma of war. So, to conclude, we might want to say that the
psychoneuroses are to the life instincts what the war neuroses are to the death instincts. That
however does not mean that a patient can experience the death instincts only by
going to battle. A number of clinical phenomena like ‘resistance, sadism, masochism,
and the negative therapeutic reaction’ give clinicians reason to believe that the war
which wages in the psyche of the patient is as ferocious as that which he encounters in the
battle-field. The range of posttraumatic neuroses in contemporary military psychiatry
then constitute the ‘return of the repressed’ – i.e. the death instinct from the theory
and practice of American ego psychology. It is important to remember that questions
of individual stability that have moved into the mainstream of the financial system
from the work of central bankers like Ben Bernanke and Mark Carney have an
internal history within military psychiatry. The main presenting symptom in the war
neuroses is instability. What is clinically at stake really is whether suppression or
expression therapies will be most responsive in these cases. These cases of instability
in the war neuroses or posttraumatic stress disorder are also accompanied by panic
attacks; therefore, much like the forms of the negative ‘contagion effect’ that is
studied by stabilizers, what is needed are therapeutic strategies to both calm and
stabilize the patient. We must however differentiate between the terms ‘stability’ and
‘stabilization.’ The former term can be divided into inherent and acquired forms of
stability. Those who are ‘inherently stable’ are less vulnerable to splitting processes in the
psyche and therefore less prone to shock in the battlefields of life and in those of
war.14 Stabilization, on the other hand, refers to interventional mechanisms associated
with the work of analysts, regulators, and policymakers. In macroeconomic theory,
stabilization policies involve the re-capitalization of the banking sector whenever
there is fear of contagion in the wake of a ‘run on a bank’ or following the failure of a
systemically important financial institution.15 The best known instance of
14 See Sigmund Freud (1938, 1940,1991). ‘Splitting of the Ego in the Process of Defence,’ On
Metapsychology: The Theory of Psychoanalysis, translated by James Strachey, edited by Angela
Richards (London: Penguin Books), Vol. 11, Penguin Freud Library, pp. 457-464. See also
Richard Boothby (2001). Freud as Philosopher: Metapsychology after Lacan (New York and
London: Routledge) for a Lacanian interpretation of meta-psychology.
15 See R. W. Hafer (2005). ‘Stabilization Policy,’ The Federal Reserve System: An Encyclopaedia
(Westport, CT: Greenwood Press), pp. 355-357. See also Robert J. Shiller (2012). ‘Policy

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stabilization policies are those associated with the interventions made by multi-
lateral lending institutions like the IMF; a recent example in financial history is
represented by Stanley Fischer’s forays in stabilization in South-east Asia in 1997;
and by the theoretical and policy discussions that led to the three Basel Accords.16 In
both these cases, what was required for stabilization was a numerical measure of capital
adequacy ratios along with the political will to implement it without fear of
‘regulatory arbitrage’ on the part of participating banks and financial institutions. 17
CONCLUSION
The main advantage in thinking through the Freudian theory of conflict is that it will
make it possible to ask what inter-disciplinary connections can be discerned between
the use of terms like ‘stability’ and ‘stabilization’ in areas like psychoanalysis,
military psychiatry, and in macroeconomics. What all these areas need is a formal
theory of the subject. It is the task of Freudian psychoanalysis to provide precisely that.18
That is why I have invoked the work of stabilizers and contemporary central bankers
like Ben Bernanke, Janet Yellen, Stanley Fischer, and Mark Carney in what is
ostensibly a genre of clinical notes aimed at psychoanalysts of a Freudian or a Lacanian
persuasion.19 In other words, a macro-economy of the symptom that engages with
Makers in Charge of Stabilizing the Economy,’ Finance and the Good Society (Princeton and
Oxford: Princeton University Press), pp. 111-118.
16 See Arthur J. Ronick (1999). ‘Interview with Stanley Fischer,’ The Region, December,
Federal Reserve Bank of Minneapolis, available at:
http://www.minneapolisfed.org/pubs/region/99-12/fischer.cfm
17 See, for instance, Joseph Stiglitz (2010). ‘The Financial Crisis of 2007-8 and its
Macroeconomic Consequences,’ Time for a Visible Hand: Lessons from the 2008 World Financial
Crisis, edited by Stephanie Griffith-Jones et al (Oxford: Oxford University Press), The
Initiative for Policy Dialogue Series, pp. 19-49; Gary B. Gorton (2012). Misunderstanding
Financial Crises: Why We Don’t See Them Coming (Oxford and New York: Oxford University
Press); and Ben S. Bernanke (2013). The Federal Reserve and the Financial Crisis: Lectures by Ben
S. Bernanke (Princeton and Oxford: Princeton University Press).
18 The growing interest in the behavioural dimensions of economics in recent years is related
to the need for a theory of the subject. See Robert J. Shiller (2001). ‘Human Behaviour and
the Efficiency of the Financial System,’ Cowles Foundation Paper Number 1025, Cowles
Foundation for Research in Economics, Yale University, available at: http://cowles.econ.yale.edu
These behavioural themes are developed further in Robert J. Shiller (2005). ‘Psychological
Factors,’ Irrational Exuberance (New York and London: Currency Doubleday), Second
Edition, pp. 145-173.
19 Psychoanalysts who want to read up on monetary policy should consult David A. Moss
(2007). ‘A ShortHistory of Money and Monetary Policy in the United States,’ A Concise Guide
to Macroeconomics: What Managers, Executives, and Students Need to Know (Boston: Harvard

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theories of stability in central banking, as articulated by the Federal Reserve and the
Bank of England, is a necessary supplement to what psychoanalysts designate by the
libidinal economy of the symptom.20 Such an interdisciplinary approach to stability and
stabilization will make it possible for financial analysts and psychoanalysts to not
only learn from each other; but, most importantly, situate the role of endemic
conflict within the human psyche in their attempts ‘to fight threats to stability’ in the
G20.
Needless to say, then, like Mark Carney and the Bank of England, psychoanalysts
are ‘friends of those that are stable,’ and ‘enemies of those that are unstable.’
Incorporating the Freudian theory of conflict will make it possible to formally
represent not just the fact that a systemically important stakeholder or financial
institution is unstable, but explain why that should be the case. Likewise clinicians,
who see unstable patients in their clinic in the wake of the financial crisis of 2007-08
in the City of London and elsewhere, will have a better understanding of the financial
equivalent of the war neuroses that afflicted the first generation of Freudian
psychoanalysts.
SHIVA KUMAR SRINIVASAN
Shiva Kumar Srinivasan has a Ph.D. in English Literature and Psychoanalysis from
the University of Wales at Cardiff (1990-1996). He has served as faculty at IIT
Kanpur, IIT Delhi, IIM Ahmedabad, IIM Kozhikode, XLRI Jamshedpur, and IIPM
Chennai. His research interests include the communications policy of central banks,
literature and psychoanalysis, and human capital theory.
Business School Press), pp. 87-97; and Andrew B. Abel, Ben S. Bernanke, and Dean
Croushore (2011,2013). ‘Monetary Policy and the Federal Reserve System,’ Macroeconomics
(New Delhi: Dorling Kindersley), The Pearson Series in Economics, pp. 525-570.
20 For the libidinal economy of money, see Manfred F. R. Kets de Vries (2009). ‘Meditations
on Money,’ Sex, Money, Happiness, and Death: The Quest for Authenticity (London: Palgrave
Macmillan), INSEAD Business Press, pp. 71-106.