Biological
Considering that dreams incorporate cellular processes, and that the regulation of cellular processes are taking place at the very basic level of our body, we can say that dreams arise from our core self. The point being made is that underlying cellular processes is the basis of life – the Life process. This can be checked by reading Kasatkin and also the entry on Levels of Mind.
Hadfield emphasises a slightly different aspect of the compensatory process in dreams than Jung, although there is great similarity. He writes in Dreams and Nightmares, ‘If a branch of a tree is cut, new shoots spring out; if you injure your hand, all the forces of the blood are mobilised until that wound is healed and you are made whole. It is a law of nature. So it is psychologically: every individual has potentialities in his nature, all of which are not merely seeking their own individual ends, but each and all of which serve the functions of the personality as a whole. Our personality as a whole, like every organism, is working towards its own fulfilment.’
He connects this even more directly with the overall self-regulatory physical processes in saying ‘There is in the psyche an automatic movement toward readjustment, towards an equilibrium, toward a restoration of the balance of our personality. This automatic adaptation of the organism is one of the main functions of the dream as indeed it is of bodily functions and of the personality as a whole. This idea need not cause us much concern for this automatic self-regulating process is a well known phenomenon in Physics and Physiology. The function of compensation which Jung has emphasised appears to be one of the means by which this automatic adaptation takes place, for the expression of repressed tendencies has the effect of getting rid of conflict in the personality. For the time being, it is true, the release may make the conflict more acute as the repressed emotions emerge, and we have violent dreams from which we wake with a start. But by this means, the balance of our personality is restored.’
The difference between Jung and Hadfield is that Hadfield is saying the dream is not merely ‘compensating’ for something the conscious personality is doing but is being purposive in pushing toward healing or growth. As with the physical process of self-regulation, which overall supports growth and stability, this psychological process in dreams appears to have much the same function.