"Psychoanalysis & The Indian Property Boom"

Psychoanalysis & the Indian Property Boom
 

Psychoanalysis essentially bursts a bubble. There are mutterings in The Times of India today that home sales in the City are dropping by 50%, with the chairman of Knight Frank, global property consultants commenting that “Developers are in denial mode”. A friend shares with me that the interest on many of the property developer’s loans is in the region of 40%. Psychoanalysis is the voice of dissention. It speaks of what might otherwise remain hidden, out of sight, lingering in the corner of one’s mind, or in jokes or in dreams. Freud, a Jew, who died two weeks after the outbreak of the Second World War, in 1939, was naturally, if not by circumstance alone, fascinated by the workings of power. The belief that cool-headed reason could rule the world, it would seem, was revealed to be nothing more than a failure, a fantastic dream in itself, as the catastrophe gathered across Europe. Psychoanalysis offered something else. More than the simple workings of any single individual, he asked what leads to our collective delusions. How do otherwise competent individuals, seem to lose their ability to think rationally and critically when they form a group? How does a group fantasy, a grandiose story of itself take such a hold of its members?

One of the most powerful group fantasies to be found in every corner of the world has to be the collective belief that property and land prices will endlessly rise. Here in India, I am told that buying land is often preferred to laying money in untrustworthy Indian banks. I’m also told that in the Punjab region, there are some who still bury gold in their land as the safest depository.

But does psychoanalysis and the virtual collapse of the Irish economy have something to offer our thinking about property booms and the trajectory for India? In the lead up to the Irish spectacular downturn, Morgan Kelly, Professor of Economics, at University College Dublin, wrote an article for the Irish Times suggesting that the “it is not implausible that Irish real estate prices could fall, relative to income, by 40-50 percent”. He was ignored. The signal that concerned him, was that his young students, barely out of graduate school, suddenly became the ‘expert-voices’ making their pronouncements and predictions on the Irish economy. When he wrote a second article along the same lines for wider circulation with the Irish Independent, it was rejected on the grounds that the article was offensive and they would not publish it. They wrote, “You are either for us or against us”. Essentially, the moment you cease to believe that property prices will rise forever, that it has become terrible long-term investment the market will crash. On the 29^th September 2008 the value of stock of the three main Irish banks fell between a fifth and a half in a single trading session. A fifth of the Irish workforce was employed in building, nearly a quarter of the country’s GDP construction industry. His dissenting voice was only picked up later when the Irish crash he had predicted happened, throwing an economy, a community and its people into chaos. Twenty four property developers committed suicide.

What psychoanalysis offers us is a way to make sense of a collective withdrawal into fantasy which led to the crash of the Irish economy. Fantasies have a dissociative quality, a numbing, deadening way of taking oneself away from oneself and one’s true reality. This place of illusion, John Steiner referred to as a “psychic retreat”, medication against the invasion of reality into a comforting place of non-thought. Yet psychoanalysis heeds a cautionary word that our development of more critical consciousness, with clear distinctions, is a journey fraught with obstacles. These go by the name of “resistance.” Resistance hardens over time. To coin a popular phrase, we are “stuck in our ways”. Resistance defends both against something and for something else. Most of all Freud warns of our resistance to living fulfilled engaged lives as we “cling to our disease”.

The rather crude stereotype of the Irish is that they have the “Gift of the Gab”, a tendency to use very descriptive colourful, visionary, optimistic language, rather than the more factual, evidence-based style of speaking. As the psychoanalyst Adam Phillips points out, there is no magic cure, pointing out that “ideally it (psychoanalysis) enables you to realise why you’re prone to believe in magic and why you shouldn’t, because to believe in magic is to attack your own intelligence”.

Be cautious of believing in magic and Irish fairies. Here in Mumbai, there’s a real estate company called “Magic Bricks”.