Jung and markets In a brilliant piece “The Stock Market Scene today: A Jungian Perspective”, in a book “Market Analysis for the New Millennium” the author, Anne Crittenden, writes about a Jungian perspective to stock markets. “The mass participation and blind faith in the stock market that we see everywhere today is an astonishing spectacle. I believe that Jungian depth psychology can contribute to our understanding of the phenomenon. Carl Jung (Swiss psychotherapist, 1875-1961) believed that the psychological foundation we all share as human beings makes us susceptible to “psychic contagion” from those about us. Today, because of electronic communications and mass media, such contagion can rapidly become a full-scale epidemic. When this occurs, we are no longer responsible, sensible individuals, but a herd. This is the situation today in the stock market, particularly in the United States but virtually throughout the world. The following comments offer a broadly Jungian perspective on three aspects of this mania. Firstly, I outline the depth-psychological processes and events that are taking place, both in individuals and in the collectivity of people; then I look at some of the powerful archetypal symbols that are holding investors spellbound. Lastly, I discuss the psychological reversal that, on Jungian principles, is the mania’s inevitable outcome. The Depth-Psychological Processes Involved in a Mania According to Jung, the psyche of a human being has three levels or kinds of functioning. The most evident level is the conscious mental ego. This is the rational mind or self that, when it functions in a fully human way, labours to acquire knowledge and to think analytically and critically, both about the external world and about the self. A good education and habits of critical reflection are essential to the advanced development of this part of our mind. Ordinarily, Jung believed, consciousness functions only intermittently at a rational-critical level. People are mostly just processing sensory input in a routine way, and there is little analytical thinking about their own psychology or the outside world. Jung maintained that because of this, most people are largely “unconscious” most of the time. Clearly, he did not mean that they are literally out of their senses, asleep or comatose but that they are not really thinking. Just beneath the everyday half-conscious mind is what Jung following Freud – called the personal unconscious, comprising the individual’s personal history. Jung regarded this as only a superficial level of the unconscious; it plays little part in mass movements such as manias. What really drives a mania is the deepest level of the mind: the vast psychological powerhouse that we all share www.capitalideasonline.com Page - 1 Jung and markets as members of the same species; Jung called this the “collective unconscious.” Jung believed that even highly self-aware individuals are far more influenced by this collective psyche than they ever imagine. Our personal individuality, so precious to us (and valued very highly by Jung), floats rather insecurely on an underground psychic sea that is the same in all of us, though it fmds varying specific embodiments in different cultures. Most of the time, if we are lucky, this great sea is fairly calm, but if storms arise, the little boat of our individual consciousness can be heaved around like a cork. Formed over the aeons of our evolution, this collective unconscious comprises our instincts and what Jung called “archetypes” or species-typical patterns of thinking, feeling and reacting. They underlie all our typical life experiences, our typical human hopes and fears. They can be seen, externalized, in the form of mythological and religious motifs that occur throughout the world. I will say more about some particular archetypes relevant to the stock market shortly, but here it should be stressed how much patterns belonging to the collective unconscious influence our individual minds. As Jung warns, we are most liable to find ourselves at the mercy of the unconscious if we scorn the very idea of an “unconscious” mind. The unconscious, with its highly potent archetypes, needs to be watched carefully if it is not to take us by surprise. The classical world talked about these mysterious psychological forces that could erupt from time to time as deities who must be respected because of their power to suddenly strike us down. Jung, who greatly esteemed the psychological insight embodied in classical mythology, held the same attitude. For him, the supreme task of our inner life – both as individuals and as whole cultures – is to strive to stand in intelligent relation to the unconscious. We must always be aware of the fragility of our rational capacity and must treat the unconscious with great respect and caution. If this is not done, individually, our ego can be seized and enthralled by an archetypal unconscious influence. In the grip of an archetypal idea, our ego becomes charged up by a sense of power. In Jungian terms, the ego becomes “inflated.” This is bad enough in an individual, but if the collectivity identifies with an archetype, the result is mass psychic inflation, a populist mania. Such is the situation today in the stock market, throughout much of the world. There is, alas, nothing new in the phenomenon of mass mania. Throughout history there have been many manias: political, military, religious, financial. The effect is always to over-stimulate the group so that its sense of power and efficacy is abnormally revved up. Social mood becomes supercharged. The collectivity as a whole feels enlarged, energized and empowered. National self-esteem soars. It becomes extremely difficult for any individual to resist this marvellous feeling of elation and godlikeness. Jung never tired of pointing out that only a highly developed www.capitalideasonline.com Page - 2 Jung and markets consciousness of the power of the unconscious can enable an individual to withstand the power of the psychic flood sweeping everybody along. There is nothing more isolating than maintaining one’s individuality in a mass mania. When people succumb, however, they lose the capacity for independent thought and function almost solely as bearers of the prevailing psychological epidemic. Eventually, even previously responsible people can become a mindless herd governed by some collective fantasy. It is typical of such a situation that people think everything is wonderful, but actually their intoxication is highly regressive. It is a return to what the French anthropologist Levy-Bruhl called “participation mystique,” the group consciousness that prevails in tribal societies. Jung often warned of the danger of regressing to this state. Although he never wrote about the stock market (despite having numerous stockbroker patients!) he would, I am sure, have had no hesitation in assessing the stock market mania we see today as a collective psychic inflation. He could point to the giddy level of wish-fulfillment, the mass fantasy of unearned wealth for all, the rapturous state of “participation mystique” and its accompanying irresponsibility and euphoric elation. Archetypal Symbols Involved in the Mania The particular archetypal idea or image that enraptures people’s consciousness in the stock market today is ascension or magical flight. It is not hard to see why this should be so. The market graphs have been in an overall uptrend since the Great Depression. Then, since 1982, they have been accelerating upwards in a gravity-defying way. The human mind is very susceptible to the allure of this upwardly vaulting line. One of this century’s leading scholars of comparative religion, Mircea Eliade, discusses the archetype of ascension in his book Myths, Dreams and Mysteries (1957). He argues that the symbolism of ascension, especially ascent far up into the sky, expresses humanity’s deep-seated yearning for absolute freedom and for deliverance from the cares and sorrows of earthly life. We long to be able to rise up out of this world of work, suffering and death into a heavenly state of freedom, ease and bliss. World religions, from the most archaic to the most advanced, abound in stories of culture-heroes – spiritual leaders, or embodiments of the aspirations of the group – who ascend to a higher world. The earth, which is the symbol and embodiment of drudgery and hard necessity, is left far below. Incredible as it may seem, the soaring stock market graphs have activated (Jung would say “constellated”) this major archetype in people’s minds. The stock market is today’s magic stairway by which people imagine they will ascend into a heaven where all their dreams will be fulfilled, and they and their families will live happily ever after. www.capitalideasonline.com Page - 3 Jung and markets While the stock market as a whole promises magical ascension, the high-technology stocks embody the archetype of magical flight quite literally. Jung would have been fascinated by the magnetic appeal, to today’s investors, of the high-technology stocks. He always held that the presence of what he called the “cosmic element” was a sure sign of the activation of an archetype of the collective unconscious. By cosmic element he meant anything that suggested the attainment of infinity, such as extraordinary angles of flight, enormous speed, or vast extension. In today’s mania, the high-tech stocks obviously exhibit such “cosmic” qualities, embodying fantasies of unlimited power. The vast amount of money committed to these stocks certainly testifies to the power of this particular archetype. (A recent PBS television program interviewed a suburban lady who has put the family fortune into two technology stocks whose names she cannot quite recall. There can be little doubt that the collective unconscious is in the driver’s seat there!) The ego-inflation that causes the mass throwing-off of any and all caution, under the influence of the ravishing archetype, is most evident in people’s attitude toward mutual funds.