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Consider that the Id is the source of instinctual drives and desires. This is where the libido comes from. Cathexis is kind of a broad term, but is essentially another way of describing the libido or of describing the process of directing psychic energy to some representation of something else. As broadly defined as a process of directing psychic energies (and/or of passive or active impulses and drives), cathexis can refer to the mind's organization of symptoms, impulses, regression, and other phenomena or behavior that result from the manifestation of psychic energy. Consider this example. A subject associates a teddy bear with perseverance because, as a child, he used the teddy bear for strength and a feeling of security (also denoted as a fetish in broad Freudian thinking). The subject felt as though the bear helped him through his sickness, but what made the bear more significant was that he ascribed psychic energy towards it. The bear is the representation for perseverance. The boy used cathexis, ascribing psychic energy, to associate the bear with that feeling (perseverance).
Cathexis can also be used to describe the organization of many representations and if they are interconnected with other representations and feelings, these can be described as a complex: a group of cathected representations. When something is cathected, especially with a strong feeling or emotion, it is more likely to form a memory. The goal of psychoanalysis as a talking cure is sometimes to uncover what some of these representations mean, how they are related to other representations. And in deeper repression, sometimes the cathected object representing a feeling might have been replaced over the years and therefore the psychoanalyst must prompt the subject to retrace the series; i. e., animal - bear - teddy bear - perseverance.
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