This chapter describes the most important respects in which Sigmund Freud’s dissection of the group mind throws light on the normal and pathological psychology of the individual. Freud disposes of the idea, automatically assumed by other writers on the subject, that group psychological phenomena take place only in a ‘group’, that is, in the presence of a large number of individuals. Freud, points out that it is in fact group phenomena and their historical development which help to explain what occurs between two individuals in the process of suggestion. The transference neuroses, which were the original point of departure of psycho-analysis and for a long time its only subject-matter, of course enabled Freud to make a practically complete reconstruction of the phases of development of the sexual instinct. Psychoanalysts can see that the exploitation of the new phase of ego and libido development has made a promising beginning in psychiatry.