Prompted by the always-generous encouragement of Kahlil Chaar-Pérez, I will today try to provide some of the background theoretical discussion about “disavowal” that I cut from my paper on capitalism and greed. Here, I present some attempts at definitional business, followed by the establishment of some links between disavowal and the logic of capitalism.
Returning to Freud
What is “disavowal”? Jean Laplanche and Jean-Bertrand Pontalis describe “disavowal” as Freud’s term for a “mode of defense” that “consists in the subject’s refusing to recognize the irreality of a traumatic perception.” The classical form of this “traumatic perception” is the male child’s first encounter with incontrovertible evidence of sexual difference, and the “mode of defense” to which it is related is perversion or fetishism.
Freud describes “disavowal” as a creative response on the part of the child but a much more fraught operation for the adult––“a process which in the mental life of children seems neither uncommon nor very dangerous but which in an adult would mean the beginning of a psychosis.” Laplanche and Pontalis recall that, for Freud, adult disavowal is a “first stage of psychosis,” opposed, structurally, to repression: “whereas the neurotic starts by repressing the demands of the id, the psychotic’s first step is to disavow reality.”
Freud’s publication, in 1927 of Fetishism marked a maturation of his theorization of disavowal. As Laplanche and Pontalis write, Fetishism “shows how the fetishist perpetuates an infantile attitude by holding two incompatible positions at the same time: he simultaneously disavows and acknowledges the fact of feminine castration.” They point out that the unique form of disavowal of the fetishist is actually something of a hybrid psychic operation: as a strategy in relation to enjoyment or jouissance, ordinary fetishistic disavowal is halfway down the road to neurotic repression and its characteristic gesture of seeking a “compromise formation” between two conflicting forces. The more extreme forms of fetishistic disavowal, however, point toward a “splitting” of the ego (this analysis would be worked up in the late Freudian texts Splitting of the Ego in the Process of Defence (1938) and An Outline of Psycho-Analysis (1940).
“It is this notion of a splitting of the ego,” Laplanche and Pontalis write, building up to a key citation from Freud, “which serves to cast a clearer light on the concept of disavowal. The two attitudes of fetishists––their disavowal of the perception of the woman’s lack of a penis and their recognition of this absence and grasp of its consequences (anxiety)––’persist side by side throughout their lives without influencing each other. Here is what may rightly be called a splitting of the ego.’”
This kind of splitting is not to be confused with the sort of “division in the personality” characteristic of neurotic repression. The ambivalence of the neurotic is an internal drama, staged between the forces of the personality and the traces of memory. Disavowal, in contrast, describes a process of stimulus and response: objects in the world make themselves known to us, and, we defend ourselves against their capacity to harm or overwhelm us. Of the six German words which begin with the letters “V-E-R” that Freud uses to discuss the mechanisms of defense––(Verneinung (denial); Verdrängung (repression); Verwerfung (foreclosure); Verleugnung (disavowal); Verdichtung (condensation); and Verschiebung (displacement)––only Verwerfung (foreclosure) operates in a manner akin to disavowal. Foreclosure refuses certain bits of information as they appear on the perceptual scene, whereas disavowal simultaneously keeps them and denies them by splitting the screen.
Laplanche and Pontalis highlight this affinity between disavowal and foreclosure by pointing to Freud’s famous case history of the “Wolf Man” as a key moment in the adumbration of the mature theory of disavowal: “In the end there were to be found in him two contrary currents side by side, of which one abominated the idea of castration, while the other was prepared to accept it and console itself with femininity as a compensation. But beyond any doubt a third current, the oldest and deepest, [which had purely and simply repudiated (verworfen hatte) castration, and] which did not as yet even raise the question of the reality of castration, was still capable of coming into activity.”
The seeds planted in this passage from the “Wolf Man” would bloom in the later work of Freud, and in particular the essay “Splitting of the Ego in the Process of Defence” (1938).In “Splitting of the Ego,” childhood disavowal is linked to the etiology of adult fetishism and perversion. The origin of any sexual fetish, for Freud, can be traced back to a moment of the young child’s shocking confrontation with the traumatic reality of biological sexual difference (usually the visual apprehension of the genitals of an opposite-sex sibling or parent).
Whatever is seen immediately before this terrible encounter with reality––a foot, a piece of cloth, etc.–– becomes the source of a primitive fetish, which allows the child to simultaneously maintain their ignorance and integrate their new knowledge. This proto-fetish, then, allows the child to disavow what they have learned: to retain the pleasures of innocence, but still maintain contact with reality.
Within this traumatic scene, the disavowal and splitting of the fetish is a success the failure to establish a fetish (which Freud paints as an “artful” accomplishment of the panicking child) might be a straight path to psychosis. In the face of the danger of a frightening new reality, the child who forecloses—refuses, shuts out, disallows the creation of a category in which the shocking new information could be contextualized––is much more likely to move inexorably to a psychotic break.
We can summarize the argument thus far by recalling that, classically speaking, disavowal is the “future pervert’s” childhood strategy for maintaining a split between contradictory or incommensurable realities. In Freudian terms, “foreclosure” would name the corollary strategy adopted by the “future psychotic.” And “repression,” the absorption of traumatic reality, and the willful forgetting, at a later time, of this knowledge, leads the “future neurotic” to his or her destiny. We might say that repression works by first creating a mental file folder for the traumatic new knowledge, and then trying to bury the folder as far back in the drawer as possible. Foreclosure works, in contrast, on the model of a reflexive slamming-shut of the drawer before the new folder can even be taken out of its shrink-wrap, inscribed with a title, and filled in with preliminary papers and materials. Disavowal operates by splitting the screen, so that a new folder both is and at the same time is not created.
Or, to use the familiar Freudian analogy of the strawberry cake: whereas foreclosure leads to a smashing of the cake or deleting it out of existence as with a Photoshop “eraser” tool, repression registers the existence of the cake and then tries to forget about it or alter it in memory so that it begins to seem unappetizing, and one prefers crudité, in any event. Disavowal, in contrast, deals with the traumatic spectacle of the cake by “splitting” the scene, on the model of the “split-screen technique” popular in Hollywood films of the 1960s. If we are permitted to arrive at the clichéd conclusion: by means of this act of “splitting,” disavowal allows us to have our cake and eat it, too.
Disavowal and Capitalism
Having worked out some of the broad contours of disavowal as a psychoanalytic concept, we turn to the historical question of what any of this has to do with capitalism. Our wager is that it has quite a lot to do with capitalism.
We offer for your consideration the following three examples.
First, the economics textbook definitions of “market failure” and “external cost”:
The invisible hand usually leads markets to allocate resources efficiently. Nonetheless, for various reasons, the invisible hand sometimes does not work. Economists use the term market failure to refer to a situation in which the market on its own fails to allocate resources efficiently. One possible cause of market failure is an externality. An externality is the impact of one person’s actions on the well-being of a bystander. 
Here, the idea of an “invisible hand”––a notion that only makes sense if it is self-sufficient and beneficent––is retained by the authors by way of a splitting of the scene. The information from the outside world––for example, the rubbishing of lakes and rivers and the rise in all manner of industrial diseases––creates a cognitive crisis for the orthodox professional economist. The “invisible hand” must be rejected, in the face of this crisis, as a childish fantasy. The discursive tools of “externality” or “market failure” allow for its simultaneous retention and rejection.
Or, consider the phenomenological underpinnings of property rights in the fantasy of “the right to exclude” strangers from the enjoyment of one’s land. This arithmetic way of mapping property relations—each possessive individual owning his own body, and his own plot of land––denies or hides the most important dimensions of how property actually works—animated, as it is, by multiple and competing claims to the tangible and intangible world of things, with varying levels of sovereignty. Such a view of property hides the violence that keeps maps stable, and it denies what is special about capitalist property once getting a job becomes necessary for survival (a historical eventuality that requires as its precondition the elimination, achieved via the law, of a prior configuration of property held in common).
Perhaps most importantly, it hides the inevitable antagonisms and rivalries that results from the inevitable mismatch of owners and property and names and things. We return again to a favorite example. Joan Copjec writes: “Kant had, in the Critique of Practical Reason, quoted a satirical poem in which two halves of a couple each wish for the ruin of the other. The sentiment and phrasing of this poem recalls Francis I’s account of his battle against the Emperor Charles V: “Oh marvelous harmony; what I want, he wants, too. What my brother Charles wants (Milan), I want, too.” If Francis wants to possess Milan (in its material actuality as blood and soil), then his sharing of this desire with his brother Charles results not in “marvelous harmony” but, necessarily, in war. At the level of the Symbolic and the Imaginary––of language and fantasy––the shared desire of Francis and Charles really does register as “marvelous harmony.” It is only at the level of the Real that this mutual desire translates as a contradiction that must give way to struggle.
Or, consider the negation of reality implicit in capitalist economics’ signature analytic gesture—ceteris paribus. As the heterodox economist Steven Keen writes: “Economists… have been wedded to the notion of ceteris paribus (‘all other things remaining equal’) as a way of being able to impose some order on the apparent chaos of the market. Ceteris paribus is of course an illusion, but the illusion often seems preferable to reality when it appears that fully acknowledging reality forces one to abandon structure.”
In these examples what we see most prominently on display is disavowal. It is difficult to resist the conclusion that there is something uniquely pertinent about disavowal to contemporary modes of capitalist subjectivity.
 “Confronted by the absence of a penis in the girl,” Laplanche and Pontalis write, “children disavow (leugnen) the fact and believe that they do see a penis, all the same.” In Some Psychical Consequences of the Anatomical Distinction Between the Sexes (1925), disavowal is described as operating in the little girl just as much as in the boy.
 See Mladen Dolar, “Hegel and Freud.” http://www.e-flux.com/journal/hegel-and-freud/
 Thierry Bokanowski and Sergio Lewkowicz. On Freud’s “Splitting of the Ego in the Process of Defence.” London: Karnac, 2009.
 N. Gregory Mankiw, Principles of Economics, 2nd Ed. New York: Harcourt, 2012.
 James W. Ely Jr., The Guardian of Every Other Right: A Constitutional History of Property Rights. Ely observes: “Traditional property rights sometimes collide with other constitutionally protected rights, requiring the courts to strike a balance between competing values. The right of property owners to maintain exclusive possession of their property has long been deemed an essential element of private property. Yet this right to exclude persons may have the effect of hampering others in the exercise of their constitutional guarantees.”
Steve Keen. Debunking Economics––Revised and Expanded Edition.
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