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There is no politics without fantasy." Such is the central message of Renata Salecl's remarkable book - the thread that weaves together a rich tapestry of observations on the state of contemporary politics in eastern Europe and beyond. Salecl draws on a psychoanalytic framework deriving from the work of Jacques Lacan. Central to Lacan's thought is the idea that, on the human subject's entry into language, there remains a kernel of enjoyment or desire that cannot be represented linguistically because it is the object of fundamental prohibition. This entails that in expressing our needs as linguistic demands to others, we always have the sense of something which cannot be articulated. We tend to experience this as a lack in the Other, although it signifies equally a lack in ourselves.

Salecl argues that the success of political discourses in legitimising social arrangements such as those of state socialism lies in their effective exploitation of a fantasy dimension that promises to assuage this sense of lack. There is always a hidden element in political discourse that equals or even outstrips the importance of its ideological meaning. Salecl locates this within the capacity of certain political ideas at particular times and in particular places to enable us to manage our disruptive and unspeakable desire by creating a space within which we can appear likable to ourselves. This insight is mobilised to analyse both the history of communism in the Soviet Union and eastern Europe and the development of post-socialist societies.

Of particular importance to Salecl's account are nationalism, racism and sexism, and their roles in underpinning subjects' sense of identity and in legitimising forms of political authority. For example, the hidden "surmise" of nationalist political rhetoric plays upon hatred and exclusion of an Other who stands in for our own enjoyment that cannot be acknowledged, and upon whose existence our own identity is premised. Amid the collapse of authority structures that characterises the post-revolutionary situation, the fantasy of the nation - that idea in us which is more than our individual selves, and which promises to bind us together as a unified whole - assumes a distinctive, and dangerous, power.

Salecl engages with many of the most influential theoretical discourses of our time, and casts her critical gaze across many of the most pressing contemporary social issues - human rights, democracy, abortion, crime and violence. The Spoils of Freedom is an uncomfortable book in the best sense. Its independent analysis constantly challenges received opinions. For example, Salecl draws some disturbing analogies between the structure of communist discourse and that of the "political correctness" movement: each engenders a kind of staged public performance that leaves the structure of private life untouched. She also traces links between racism and the "meta-racist" implications of culturally relativistic positions that have emerged in both western liberal and east European opposition politics. Her analysis of the democratic potential of the Cartesian cogito, and the Kantian notion of the subject underpinning human rights discourse, is as courageous in its resistance to what has almost become a feminist critical orthodoxy as her critique of John Rawls's Theory of Justice is insouciant in its psychoanalytic deconstruction of the philosophical premises of contemporary liberalism. Gently but persistently inserting references to her own experience and situation, Salecl deftly displaces the distance of "impartiality" and constantly demands the reader be self-critical.

The diversity of Salecl's theoretical and political resources ensures a fascinating, if sometimes hurried, journey through her text. Anyone with an interest in contemporary politics will come away with a refreshing sense not only of the explanatory power but also, and crucially, of the political relevance of its psychoanalytic framework. For the central message of Salecl's work is both realistic and constructive: that "the goal of democratic politics . . . should be to create a political space in which racist fantasies would not have any real effect". Only by understanding the role of political discourse in playing upon our most unspeakable fantasies (something about which, as Salecl argues, political theory has been peculiarly obtuse) can we see properly how to embark on the task of institutional reconstruction that faces contemporary societies in both Europe and elsewhere.

Nicola Lacey is a fellow, New College, Oxford.