The true formula of atheism is not God is dead – even by basing the origin of the function of the father upon his murder, Freud protects the father – the true formula of atheism is God is unconscious 
In order to properly understand this passage, one has to read it together with another thesis of Lacan. These two dispersed statements should be treated as the pieces of a puzzle to be combined into one coherent proposition. It is only their interconnection (plus the reference to the Freudian dream of the father who doesn’t know that he is dead)  that enables us to deploy Lacan’s basic thesis in its entirety:
As you know, the father Karamazov’s son Ivan leads the latter into those audacious avenues taken by the thought of the cultivated man, and in particular, he says, if God doesn’t exist… – If God doesn’t exist, the father says, then everything is permitted. Quite evidently, a naïve notion, for we analysts know full well that if God doesn’t exist, then nothing at all is permitted any longer. Neurotics prove that to us every day. 
The modern atheist thinks he knows that God is dead; what he doesn’t know is that, unconsciously, he continues to believe in God. What characterizes modernity is no longer the standard figure of the believer who secretly harbors intimate doubts about his belief and engages in transgressive fantasies; today, we have, on the contrary, a subject who presents himself as a tolerant hedonist dedicated to the pursuit of happiness, and whose unconscious is the site of prohibitions: what is repressed are not illicit desires or pleasures, but prohibitions themselves. “If God doesn’t exist, then everything is prohibited” means that the more you perceive yourself as an atheist, the more your unconscious is dominated by prohibitions which sabotage your enjoyment. (One should not forget to supplement this thesis with its opposite: if God exists, then everything is permitted – is this not the most succinct definition of the religious fundamentalist’s predicament? For him, God fully exists, he perceives himself as His instrument, which is why he can do whatever he wants, his acts are in advance redeemed, since they express the divine will…)
Instead of bringing freedom, the fall of the oppressive authority thus gives rise to new and more severe prohibitions. How are we to account for this paradox? Think of the situation known to most of us from our youth: the unfortunate child who, on Sunday afternoon, has to visit his grandmother instead of being allowed to play with friends. The old-fashioned authoritarian father’s message to the reluctant boy would have been: “I don’t care how you feel. Just do your duty, go to grandmother and behave there properly!” In this case, the child’s predicament is not bad at all: although forced to do something he clearly doesn’t want to, he will retain his inner freedom and the ability to (later) rebel against the paternal authority. Much more tricky would have been the message of a “postmodern” non-authoritarian father: “You know how much your grandmother loves you! But, nonetheless, I do not want to force you to visit her – go there only if you really want to!” Every child who is not stupid (and as a rule they are definitely not stupid) will immediately recognize the trap of this permissive attitude: beneath the appearance of a free choice there is an even more oppressive demand than the one formulated by the traditional authoritarian father, namely an implicit injunction not only to visit the grandmother, but to do it voluntarily, out of the child’s own free will. Such a false free choice is the obscene superego injunction: it deprives the child even of his inner freedom, ordering him not only what to do, but what to want to do.
For decades, a classic joke has circulated among Lacanians to exemplify the key role of the Other’s knowledge: a man who believes himself to be a grain of seed is taken to the mental institution where the doctors do their best to finally convince him that he is not a grain but a man. When he is cured (convinced that he is not a grain of seed but a man) and allowed to leave the hospital, he immediately comes back trembling. There is a chicken outside the door and he is afraid that it will eat him. “Dear fellow,” says his doctor, “you know very well that you are not a grain of seed but a man”. “Of course I know that,” replies the patient, “but does the chicken know it?” Therein resides the true stake of psychoanalytic treatment: it is not enough to convince the patient about the unconscious truth of his symptoms, the unconscious itself must be brought to assume this truth. The same holds true for the Marxian theory of commodity fetishism:
A commodity appears at first sight an extremely obvious, trivial thing. But its analysis brings out that it is a very strange thing, abounding in metaphysical subtleties and theological niceties. 
Marx does not claim, in the usual way of Enlightenment critique, that critical analysis should demonstrate how a commodity – what appears a mysterious theological entity – emerged out of the “ordinary” real-life process; he claims, on the contrary, that the task of critical analysis is to unearth the “metaphysical subtleties and theological niceties” in what appears at first sight just an ordinary object. Commodity fetishism (our belief that commodities are magic objects, endowed with an inherent metaphysical power) is not located in our mind, in the way we (mis)perceive reality, but in our social reality itself. In other words, when a Marxist encounters a bourgeois subject immersed in commodity fetishism, the Marxist’s reproach to him is not “The commodity may seem to you to be a magical object endowed with special powers, but it really is just a reified expression of relations between people” but rather, “You may think that the commodity appears to you as a simple embodiment of social relations (that, for example, money is just a kind of voucher entitling you to a part of the social product), but this is not how things really seem to you. In your social reality, by means of your participation in social exchange, you bear witness to the uncanny fact that a commodity really appears to you as a magical object endowed with special powers.” We can imagine a bourgeois subject visiting a course of Marxism where he is taught about commodity fetishism. After the finished course, he comes back to his teacher, complaining that he is still the victim of commodity fetishism. The teacher tells him “But you know now how things stand, that commodities are only expressions of social relations, that there is nothing magic about them!”, to which the pupil replies: “Of course I know all that, but the commodities I am dealing with seem not to know it!” This is what Lacan aimed at in his claim that the true formula of materialism is not “God doesn’t exist,” but “God is unconscious.” Suffice it to recall what, in a letter to Max Brod, Milena Jesenska wrote about Kafka:
Above all, things like money, stock-exchange, the foreign currency administration, type-writer, are for him thoroughly mystical (what they effectively are, only not for us, the others). 
Jesenska touches here Kafka at his Marxist best: a bourgeois subject knows very well that there is nothing magic about money, that money is just an object which stands for a set of social relations, but he nevertheless acts in real life as if he were to believe that money is a magic thing. This, then, gives us a precise insight into Kafka’s universe: Kafka was able to experience directly these fantasmatic beliefs that we “normal” people disavow. Kafka’s “magic” is what Marx referred to as the “theological freakishness” of commodities. If once upon a time we publicly pretended to believe, while, in our intimacy, we were skeptics or even engaged in obscene mocking of our public beliefs, today we publicly tend to profess our skeptical/hedonist/relaxed attitude, while intimately we remain haunted by beliefs and severe prohibitions. And it is against this background that one can locate Dostoyevsky’s mistake. Dostoyevsky provided the most radical version of “If God doesn’t exist, then everything is permitted” idea in “Bobok,” his weirdest short story, which even today continues to perplex interpreters. Is this bizarre “morbid fantasy” simply a product of the author’s own mental disease? Is it as cynical sacrilege, an abominable attempt to parody the truth of the Revelation?  In “Bobok,” an alcoholic literary man named Ivan Ivanovich is suffering from auditory hallucinations:
I am beginning to see and hear strange things, not voices exactly, but as though someone beside me were muttering, ‘bobok, bobok, bobok!’
What’s the meaning of this bobok? I must divert my mind.
I went out in search of diversion, I hit upon a funeral.
So he attends the funeral of a distant relative; he remains in the cemetery where he unexpectedly overhears the cynical, frivolous conversations of the dead:
And how it happened I don’t know, but I began to hear things of all sorts being said. At first I did not pay attention to it, but treated it with contempt. But the conversation went on. I heard muffled sounds as though the speakers’ mouths were covered with a pillow, and at the same time they were distinct and very near. I came to myself, sat up and began listening attentively.
He discovers from these exchanges that human consciousness goes on for some time after the death of the physical body, lasting until total decomposition, which the deceased characters associate with the awful gurgling onomatopoeia “bobok.” One of them comments:
The great thing is that we have two or three months more of life and then – bobok! I propose to spend these two months as agreeably as possible, and so to arrange everything on a new basis. Gentlemen! I propose to cast aside all shame.
The dead, realizing their complete freedom from earthly conditions, decide to entertain themselves by telling tales of their existence during their lives:
‘/…/ meanwhile I don’t want us to be telling lies. That’s all I care about, for that is one thing that matters. One cannot exist on the surface without lying, for life and lying are synonymous, but here we will amuse ourselves by not lying. Hang it all, the grave has some value after all! We’ll all tell our stories aloud, and we won’t be ashamed of anything. First of all I’ll tell you about myself. I am one of the predatory kind, you know. All that was bound and held in check by rotten cords up there on the surface. Away with cords and let us spend these two months in shameless truthfulness! Let us strip and be naked!’
‘Let us be naked, let us be naked!’ cried all the voices.’
The terrible stench that Ivan Ivanovich smells is not the smell of the decaying corpses, but a moral stench. Then Ivan Ivanovich suddenly sneezes, and the dead fall silent; the spell is lost and we are back into ordinary reality:
And here I suddenly sneezed. It happened suddenly and unintentionally, but the effect was striking: all became as silent as one expects it to be in a churchyard, it all vanished like a dream. A real silence of the tomb set in. I don’t believe they were ashamed on account of my presence: they had made up their minds to cast off all shame! I waited five minutes – not a word, not a sound.
Mikhail Bakhtin saw in “Bobok” the quintessence of Dostoevsky’s art, a microcosm of his entire creative output which renders its central motif: the idea that “everything is permitted” if there is no God and no immortality of the soul. In the carnivalesque underworld of life “between the two deaths,” all rules and responsibilities are suspended, the undead can cast aside all shame, act insanely, and laugh at honesty and justice. The ethical horror of this vision is that it displays the limit of the “truth and reconciliation” idea: what if we have a perpetrator for whom the public confession of his crimes not only does not give rise to any ethical catharsis in him, but even generates an additional obscene pleasure?
The “undead” situation of the deceased is opposed to that of the father from one of the dreams reported by Freud, who goes on living (in the dreamer’s unconscious) because he doesn’t know that he is dead. The deceased in Dostoyevsky’s story are fully aware that they are dead – it is this awareness that allows them to cast away all shame. So what is the secret the deceased carefully conceal from every mortal? In “Bobok,” we do not hear any of the shameless truths – the specters of the dead withdraw at the very point at which they should finally “deliver their goods” to the listener and tell their dirty secrets. Maybe the solution is the same as that at the end of the parable of the Door of the Law from Kafka’s The Trial, when, at his deathbed, the man from the country who has spent years waiting to be admitted by the guardian, learns that the door was here only for him? What if, in “Bobok” also, the entire spectacle of the corpses promising to spill out their dirtiest secrets is staged only to attract and impress poor Ivan Ivanovich? In other words, what if the spectacle of the “shameless truthfulness” of the living corpses is only a fantasy of the listener – and of a religious listener, at that? We should not forget that the scene Dostoyevsky paints is not that of a godless universe. The talking corpses experience their life after (biological) death, which is in itself a proof of God’s existence – God is here, keeping them alive after death, which is why they can say everything.
What Dostoyevsky stages is a religious fantasy which has nothing whatsoever to do with a truly atheist position – although he stages it to illustrate the terrifying godless universe in which “everything is permitted.” So what is the compulsion that pushes the corpses to engage in the obscene sincerity of “saying it all”? The Lacanian answer is clear: superego – not as the ethical agency, but as the obscene injunction to enjoy. This provides the insight into what is perhaps the ultimate secret that the deceased want to keep from the narrator: their impulse to shamelessly tell all the truth is not free, the situation is not “now, we can finally say (and do) all that we wanted, but were prevented by the rules and constraints of our normal lives.” Instead, their impulse is sustained by a cruel superego imperative: the specters have to do it. If, however, what the undead hide from the narrator is the compulsive nature of their obscene enjoyment, and if we are dealing with a religious fantasy, then there is one more conclusion to be made: that the undead are under the compulsive spell of an evil God. Therein resides Dostoyevsky’s ultimate lie: what he presents as a terrifying fantasy of a godless universe is effectively a Gnostic fantasy of evil obscene God. A more general lesson should be drawn from this case: when religious authors condemn atheism, they all too often construct a vision of the “godless universe” which is a projection of the repressed underside of religion itself.
I have used here the term “gnosticism” in its precise meaning, as the rejection of a key feature of the Judeo-Christian universe: the externality of truth. There is an overwhelming argument for the intimate link between Judaism and psychoanalysis: in both cases, the focus is on the traumatic encounter with the abyss of the desiring Other, with the terrifying figure of an impenetrable Other who wants something from us, without making it clear what this something is – the Jewish people’s encounter of their God whose impenetrable Call throws off the rails the routine of human daily existence; the child’s encounter of the enigma of the Other’s (in this case, parental) enjoyment. In clear contrast to this Jewish-Christian notion of truth as relying on an external traumatic encounter (the divine Call to the Jewish people, God’s call to Abraham, the inscrutable Grace – all totally incompatible with our inherent qualities, even with our innate ethics), both paganism and Gnosticism (the reinscription of the Jewish-Christian stance back into paganism) conceive the path to truth as the “inner journey” of spiritual self-purification, as the return to one’s true Inner Self, the self’s “rediscovery.” Kierkegaard was right when he pointed out that the central opposition of the Western spirituality is Socrates versus Christ: the inner journey of remembrance versus the rebirth through the shock of the external encounter. Within the Jewish-Christian field, God Himself is the ultimate harasser, the intruder who is brutally disturbing the harmony of our lives.
Traces of Gnosticism are clearly discernible even in today’s cyberspace ideology. The cyberspace dream of the Self, liberated from the attachment to its natural body by turning itself into a virtual entity floating from one to another contingent and temporary embodiment, is the scientific-technological realization of the Gnostic dream of the Self getting rid of the decay and inertia of material reality. No wonder that the philosophy of Leibniz is one of the predominant philosophical references of the cyberspace theorists: Leibniz conceived the universe as composed of “monads”, microscopic substances each of which lives in its own self-enclosed inner space, with no windows onto its environs. One cannot miss the uncanny resemblance between Leibniz’s “monadology” and the emerging cyberspace community in which global harmony and solipsism strangely coexist. That is to say, does our immersion into cyberspace not go hand in hand with our reduction to a Leibnizean monad which, although “without windows” that would directly open up to external reality, mirrors in itself the entire universe? More and more, we are monads with no direct windows onto reality, interacting alone with the PC screen, encountering only the virtual simulacra, and yet immersed more than ever into the global network, synchronously communicating with the entire globe.
The space in which the (un)dead can talk without moral constraints, as imagined by Dostoyevsky, prefigures this gnostic-cyberspace dream. The attraction of cybersex is that, since we are dealing only with virtual partners, there is no harassment. This aspect of cyberspace – the idea of a space in which, because we are not directly interacting with real people, nobody is harassed and we are free to let go our dirtiest fantasies – found its ultimate expression in a proposal which recently resurfaced in some circles in the US, a proposal to “rethink” the rights of necrophiliacs (those who desire to have sex with dead bodies). Why should they be deprived of it? The idea was formulated that, in the same way people sign permission for their organs to be use for medical purposes in the case of their sudden death, one should also allow them to sign permission for their bodies to be given to necrophiliacs. This proposal is the perfect exemplification of how the Politically Correct anti-harassment stance realizes Kierkegaard’s old insight into how the only good neighbor is a dead neighbor. A dead neighbor – a corpse – is the ideal sexual partner of a “tolerant” subject trying to avoid any harassment: by definition, a corpse cannot be harassed; at the same time, a dead body does not enjoy, so the disturbing threat of the excess-enjoyment to the subject playing with the corpse is also eliminated.
“Harassment” is another of those words which, although it seems to refer to a clearly defined fact, functions in a deeply ambiguous way and perpetrates an ideological mystification. At its most elementary, the term designates brutal facts of rape, beating, and other modes of social violence which, of course, should be ruthlessly condemned. However, in the predominant use of the term “harassment,” this elementary meaning imperceptibly slips into the condemnation of any excessive proximity of another real human being, with his or her desires, fears and pleasures. Two topics determine today’s liberal tolerant attitude towards others: the respect of otherness, openness towards it, and the obsessive fear of harassment. The other is OK insofar as his presence is not intrusive, insofar as the other is not really other. Tolerance coincides with its opposite: my duty to be tolerant towards the other effectively means that I should not get too close to him, not to intrude into his/her space – in short, that I should respect his/her intolerance towards my over-proximity. This is what is more and more emerging as the central ‘human right’ in late-capitalist society: the right not to be harassed, i.e., to be kept at a safe distance from the others.
The courts in most of the Western societies now impose a restraining order when someone sues another person for harassing him or her (stalking him or her or making unwarranted sexual advances). The harasser can be legally prohibited from knowingly approaching the victim, and must remain at a distance of more than 100 yards. Necessary as this measure is, there is nonetheless in it something of the defense against the traumatic Real of the other’s desire: is it not obvious that there is something dreadfully violent about openly displaying one’s passion for and to another human? Passion by definition hurts its object, and even if its addressee gladly agrees to occupy this place, he or she cannot ever do it without a moment of awe and surprise. Or, to vary yet another time Hegel’s dictum “Evil resides in the very gaze which perceives Evil all around itself”: intolerance towards the Other resides in the very gaze which perceives all around itself intolerant intruding Others. One should especially be suspect about the obsession with sexual harassment of women when it is voiced by men: after barely scratching the “pro-feminist” PC surface, one soon encounters the old male-chauvinist myth about how women are helpless creatures who should be protected not only from the intruding men, but ultimately also from themselves. The problem is not that they will not be able to protect themselves, but that they may start to enjoy being sexually harassed – that the male intrusion will set free in them a self-destructive explosion of excessive sexual enjoyment. In short, what one should focus on is what kind of the notion of subjectivity is implied in the obsession with the different modes of harassment: the “Narcissistic” subjectivity for which everything others do (address me, look at me…) is potentially a threat, so that, as Sartre put it long ago, l’enfer, c’est les autres (hell are the others). With regard to woman as an object of disturbance, the more she is covered, the more our (male) attention focuses on her and on what lies beneath the veil. The Taliban not only forced women to walk in public completely veiled, they also prohibited them wearing shoes with too solid (metal or wooden) heels, and ordered them to walk without making too loud a clicking noise which may distract men, disturbing their inner peace and dedication. This is the paradox of surplus-enjoyment at its purest: the more the object is veiled, the more intensely disturbing is the minimal trace of its remainder.
This is the case even with the growing prohibition of smoking. First, all offices were declared “smoke-free,” then flights, then restaurants, then airports, then bars, then private clubs, then, in some campuses, 50 yards around the entrances to the buildings, then – in a unique case of pedagogical censorship, reminding us of the famous Stalinist practice of retouching the photos of nomenklatura – the US Postal Service removed the cigarette from the stamps with the photo-portrait of blues guitarist Robert Johnson and of Jackson Pollock. These prohibitions target the other’s excessive and risky enjoyment, embodied in the act of “irresponsibly” lighting a cigarette and inhaling deeply with an unabashed pleasure (in contrast to Clintonite yuppies who do it without inhaling, or who have sex without actual penetration, or food without fat) – indeed, as Lacan put it, after God is dead, nothing is anymore permitted.
One of the standard topics of today’s conservative cultural critique is that, in our permissive era, children lack firm limits or prohibitions. This lack frustrates them, driving them from one to another excess. It is only a firm limit set up by some symbolic authority that can guarantee stability and satisfaction – satisfaction brought about by way of violating the prohibition, of transgressing the limit. To render clear the way denegation functions in the unconscious, Freud evoked a reaction of one of his patients to a dream of his centred around an unknown woman: ‘Whoever this woman in my dream is, I know it is not my mother.’ A clear negative proof, for Freud, that the woman was his mother. What better way to characterize today’s typical patient than to imagine his opposite reaction to the same dream: ‘Whoever this woman in my dream was, I am sure it has something to do with my mother!’
Traditionally, psychoanalysis was expected to allow the patient to overcome the obstacles which prevented him/her the access to normal sexual satisfaction: if you are not able to “get it,” go to the analyst who will enable you to get rid of your inhibitions. Today, however, we are bombarded from all sides by different versions of the injunction “Enjoy!”, from direct enjoyment in sexual performance to enjoyment in professional achievement or in spiritual awakening. Jouissance today effectively functions as a strange ethical duty: individuals feel guilty not for violating moral inhibitions by way of engaging in illicit pleasures, but for not being able to enjoy. In this situation, psychoanalysis is the only discourse in which you are allowed not to enjoy – not prohibited to enjoy, but just relieved of the pressure to enjoy.
 Jacques Lacan, The Four Fundamental Concepts, p. 59.
 So that, combining this dream with the dream we interpreted in Chapter 3 about the dead son who appears to the father with the terrible approach “Father, can’t you see I’m burning?”, Lacan’s statement can also be paraphrased as the reproach to the God-Father: “Father, can’t you see you are dead?”.
 Jacques Lacan, The Ego in Freud’s Theory and in the Technique of Psychoanalysis, New York: Norton 1988, p. 128.
 Karl Marx, Capital, Volume One, Harmondsworth: Penguin Books 1990, p. 163.
 Quoted from Jana Cerna, Kafka’s Milena, Evanston: Northwestern University Press 1993, p. 174.
 The very beginning of the story involves a strange denial of Rimbaud’s je est un autre (I is an other).