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Corporate Narcissists and Fraud

Uploaded 5/25/2011, approx. 16 minute read

My name is Sam Vaknin, I am the author of Malignant Self-Love, Narcissism Revisited.

The perpetrators of the recent spate of financial frauds in the United States acted with colors disregard for their employees and shareholders, not to mention other stakeholders. Psychologists have often remote diagnosed them as malignant, pathological narcissists.

Narcissists are driven by the need to uphold and maintain a forced self, a concocted grandiose and demanding psychological construct typical of the Narcissistic Personality Disorder. The forced self is projected to the world in order to garner narcissistic supply, adulation, admiration, or even notoriety and infamy.

Any kind of attention is usually deemed by narcissists to be preferable to being ignored or to obscurity. The forced self is suffused with fantasies of perfection, grandeur, brilliance, infallibility, immunity, significant omnipotence of omnipresence and omniscience.

To be a narcissist is to be convinced of a great, inevitable personal destiny. The narcissist is preoccupied with ideal love, the construction of a brilliant revolutionary scientific theory, the compositional authoring or painting of the greatest work of art, the founding of a new school of thought, the attainment of fabulous wealth, the reshaping of a nation, a conglomerate, all the entire world, and so on.

The narcissist never sets realistic goals to himself. He is forever preoccupied with fantasies of uniqueness, record-breaking or breathtaking achievements. His verbosity reflects this inner propensity. Reality is naturally quite different and this gives rise to what I call the grandiosity gap.

The demands of the forced self are never satisfied by the narcissist's accomplishments, standing, wealth, clout, sexual prowess, or knowledge. The narcissist's grandiosity and sense of entitlement are equally incommensurate with his achievements.

To bridge this discrepancy between reality and fantasy, this grandiosity gap, the malignant pathological narcissist results to shortcuts.

These very often lead to fraud.

The narcissist cares only about appearances. What matters to the narcissist are the facade of wealth and its attendant social status and narcissistic supply.

Witness the travesty extravagance of Tycho Brahe's Dennis Kozlowski, for instance. Media attention only exacerbates the narcissist's addiction and makes it incumbent on him to go ever wilder to ever wilder extremes to secure uninterrupted supply from this source.

The narcissist lacks empathy, the ability to put himself in other people's shoes. He does not recognize boundaries, personal, corporate, or legal. Everything and everyone are to him mere instruments, extensions, objects unconditionally and uncomplainingly available in his pursuit of narcissistic gratification.

This makes the narcissist perniciously exploitative. He uses, abuses, devalues and discards even his nearest and dearest and he does it in the most chilling and offhanded manner.

The narcissist is utility driven, obsessed with his overwhelming need to reduce his anxiety, regulate his libidinal sense of self-worth. This he does by securing a constant supply of his drug, attention.

American executives acted without compunction when they raided their employees pension funds, as did Robert Maxwell, a generation earlier in Britain.

The narcissist is convinced of his superiority, cerebral or physical. To his mind, he is a giant, a hamstrung by a horde of narrow-minded and envious lilypusians, midgets, intellectual dwarves.

The dot-com new economy was infested with such visionaries with a contemptuous attitude towards the mundane, profits, business cycles, conservative economists, doubtful journalists, cautious analysts.

Deep inside, the narcissist is painfully aware of his addiction to others, to their attention, applause, admiration and affirmation. He despises himself for being dependent upon other people. He hates people the same way a drug addict hates his pusher. He wishes to put them in their place, to humiliate them, to demonstrate to them how inadequate and imperfect they are in comparison to his regal self and how little he craves or really needs them.

The narcissist regards himself as one who would regard an expensive present, a gift to his company, to his family, to his neighbor's colleagues and to his country. This firm conviction of his own inflated importance makes the narcissist feel entitled to special treatment, special favors, special outcomes, concessions, subservience, immediate gratification of secretions, obedience and lenience. It also makes him feel immune to mortal laws and somehow divinely protected and insulated from the inevitable consequences of his deeds and his deeds.

The self-destructive narcissist plays the role of the bad guy or bad girl, but even this is within the traditional social roles, cartoonishly exaggerated by the narcissist to attract attention.

Men are likely to emphasize the intellect, power, aggression, money or social status. Narcissistic women, on the other hand, are likely to emphasize body, looks, charm, sexuality, feminine traits, homemaking, children, child re-rigging and so on.


What about crime and punishment?

Well, punishing the wayward narcissist is a veritable catch-22.

A V term is useless as a deterrent if it only serves to focus attention on the narcissist. Being infamous is second best to being famous and far preferable to being ignored, as we said.

The only way to effectively punish a narcissist is to withhold narcissistic supply from him and thus to prevent him from becoming a notorious celebrity.

Given a sufficient amount of media exposure, book contracts, talk shows, lectures and public attention, the narcissist may even consider the whole grisly affair to be emotionally rewarding. To the narcissist, freedom, wealth, social status, family and vocation are all means to an end. He is not invested in them emotionally. The end is attention. If he can secure attention by being the bad big wolf, the narcissist unhesitatingly transforms himself into one.

Lord Archer, for instance, seems to be positively basking in the media circus, provoked by his prison diaries.

The narcissist does not victimize, plunder, terrorize and abuse others in a cold, calculating manner. He does it off-handedly as a manifestation of his genuine character.

To be truly guilty, one needs to intend to deliberate, to contemplate one's choices and then to choose one's acts.

The narcissist does none of this.

Thus, punishment breeds surprise. He is surprised, he is hurt, he is seething with anger. The narcissist is stunned by society's insistence that he should be held accountable for his deeds and penalize accordingly. He feels wronged, baffled, victimized, injured, the victim of bias, discrimination and injustice. He rebels, he rages.

Depending upon the pervasiveness of his magical thinking, the narcissist may feel besieged by overwhelming powers. Forces cosmic and intrinsically ominous, he develops persecutory delusions. He may come up with compulsive rights to fend off this bad, unwarranted persecretary influences.

The narcissist, very much the infantile outcome of stunted personal development, engages in medical thinking. He feels omnipotent. He feels that there is nothing he couldn't do or achieve if he only sets his mind to it. He feels omniscient. He rarely admits to ignorance and regards his intuitions and intellect as founts of objective data.

Thus, narcissists are haughtily convinced that introspection is a more important and more efficient, not to mention easier to accomplish, method of obtaining knowledge than the systematic study of outside sources of information in accordance with strict and tedious curricula.

Narcissists are inspired. They despise hand-strung technocrats. They despise experts. They are divinely endowed with everything they ever need to know.

To some extent, narcissists feel omnipresent because they are either famous or about to become famous and because their product is selling or being manufactured globally.

Deeply immersed in their delusions of grandeur, narcissists firmly believe that their acts have or will have a great influence not only on their firm but on their country or even on mankind.

Having mastered the manipulation of their human environment, narcissists are convinced that they would always get away with it. They develop hubris and a false sense of immunity. Narcissistic immunity is the erroneous feeling harbored by the narcissist that he is impervious to the consequences of his actions, that he will never be affected by the results of his own decisions, opinions, beliefs, deeds, misdeeds, acts in action, membership of certain groups, and that he is above reproach and above the law.

Hence the audacity, simplicity and transparency of some of the fraud and corporate looting in the 1990s.

Narcissists rarely bother to cover their tracks and traces. This is because their disdain and conviction that they are above mortal laws and were whittled, they are enormous, they are overpowering.


What are the sources of this unrealistic appraisal of situations and events, even in men who are otherwise very practical?

The source is the false self.

The false self is a childish response to abuse and trauma. Abuse is not limited to sexual molestation or beatings. Smothering, doting, pampering, over-indulgence, treating the child as an extension of a parent, not respecting the child's boundaries, burdening the child with excessive expectations, they are all forms of abuse.

The child reacts by constructing a false self that is possessed of everything the child needs in order to prevail. The false self is unlimited, instantaneously available, and has Harry Potter-like powers and wisdom.

The false self, this Superman, is indifferent to abuse and punishment. In this way, the child's true self is shielded from the toddler's harsh reality.

This artificial, maladaptive separation between a vulnerable but not punishable true self and a punishable but invulnerable false self is an effective mechanism. It isolates the child from the unjust, capricious, arbitrary, emotionally dangerous and hostile world that he occupies.

But at the same time, it fosters in him a forced sense of, nothing can happen to me because I'm not here, I'm not available to be punished. Hence, I'm immune to punishment.

The comfort of false immunity is also yielded by the narcissist's sense of entitlement.

In his grandiose delusions, the narcissist is sui generis, a gift to humanity, precious, fragile object. Moreover, the narcissist is convinced both that his uniqueness is immediately discernible and that it gives him special rights.

The narcissist feels that he is protected by some cosmological law pertaining to endangered species. He is convinced that his future contribution to others, to his firm country humanity, should and does exempt him from the mundane. He should not be burdened with daily chores, boring chores, recurrent tasks, personal exertion, orderly investment of resources and efforts, laws and regulations, social conventions and so on. They are all for other people. He has something much more important to do right now. He should be exempted.

The narcissist is entitled to a special treatment. He expects high living standards, constant and immediate catering to his needs, the eradication of any friction with humdrum in the routine and all engulfing absolutionary scenes, fast-track privileges to higher education or in his encounter with bureaucracies or with medical doctors.

And trusted istrusted a narcissist is for ordinary people who are no great shakes to humanity is involved.

Surely it should not apply to him. Narcissists are possessed of inordinate abilities to charm, to convince, to seduce and persuade. Many of them are gifted orators and intellectually endowed. Many of them work in politics, the media, fashion, show business, the arts, medicine, business. Many of them serve as clergy, religious leaders. By virtue of their standing in the community, their charisma or their ability to find the willing scapegoats, they do get exempted, many times.

Having recurrently got away with it, they develop a theory of personal immunity founded upon some kind of societal or even cosmic order in which certain people, they themselves included, are above punishment.

But there is a fourth, simpler explanation.

The narcissist lacks self-awareness. Divorced from his true self, unable to empathize, to understand what it is like to be someone else, unwilling to constrain his actions to cater to the feelings and needs of others, the narcissist is in a constant, dreamlike state of denial.

To the narcissist, his life is unreal. It's like watching an autonomously unfolding movie. The narcissist is a mere spectator, mildly interested, greatly entertained.

He does not own his actions. He therefore cannot understand why he should be punished.

And when he is, he feels grossly wronged.

So convinces a narcissist that he is destined to create things, that he refuses to accept setbacks, failures and punishments. He regards them as temporary, the outcome of someone else's errors, as part of a future mythology of his rise to power, brilliance, wealth, ideal love.

Being punished is a diversion of his precious energy and resources from the all-important task of fulfilling his mission in life.

The narcissist is pathologically envious of people and he believes that they are equally envious of him. He is paranoid, on guard, ready to fend off an imminent attack. A punishment to the narcissist is a major surprise and a nuisance, but it also validates his suspicion that he is being singled out and persecuted.

It proves to him that strong forces are arrayed against him. The narcissist tells himself that people, envious of his achievements and humiliated by them, are out to get him. He constitutes a threat to the accepted order.

When required to pay for his misdeeds, the narcissist is always disdainful and bitter, feels misunderstood by his inferiors.

Cooked books, corporate fraud, bending the rose, sweeping problems under the carpet, over-promising, making grandiose claims, what used to be called the vision thing.

There are hallmarks of a narcissist in action.

When social cues and norms encourage such behavior rather than inhibit it, in other words, when such behavior elicits abundant narcissistic supply, the pattern is reinforced and becomes entrenched and rigid.

Even when circumstances change, the narcissist finds it difficult to adapt, to shed his routines and to replace them with new ones. He is trapped in his past success. He becomes a swindler, a fraudster.

But pathological narcissism is not an isolated phenomenon. It is embedded in our contemporary culture. The West is a narcissist civilization. It upholds narcissistic values, penalizes alternative value systems.

From an early age, children are taught to avoid self-criticism, to deceive themselves regarding their capacities and attainments, to feel entitled, and to exploit others.

As Lillian Katz observed in her important paper, Distinctions Between Self-Esteem and Narcissism, Implications for Practice, published by the Educational Resource Information Center, well, as Katz observed, the line between enhancing self-esteem and fostering narcissism is often blurred by educators and parents.

Both Christopher Lash in his book, The Culture of Narcissism, and Theodore Millon in his book, In His Tones About Personality Disorders, singled out American society as narcissistic. Litigiousness may be the flip side of an inane sense of entitlement.

Consumerism is built on this common and common ally of I can do anything I want and possess everything I desire if I only apply myself to it, and on the pathological envy that it fosters. Not surprisingly, narcissistic disorders are more common among men than among women.

This may be because narcissism conforms to masculine social mores into the prevailing efforts of capitalism. Ambition, achievements, hierarchy, ruthlessness drive our social values and narcissistic male traits.

Social thinkers like the aforementioned Lash speculated that modern American culture, self-centered, one, increases the rate of incidence of narcissistic personality disorder.

Otto Kernberg, a notable scholar of personality disorders, confirmed Lash's intuition. He said, society can make serious psychological abnormalities which already exist in some percentage of a population seem to be at least superficially appropriate, in other words socially acceptable.

In their book, Personality Disorders in Modern Life, Theodore Millon and Roger Davis state as a matter of fact that pathological narcissism was once the preserve of the royal and the wealthy and that it seems to have gained prominence only in the late 20th century.

Narcissism, according to them, may be associated with higher levels of Maslow's hierarchy of needs.

Individuals in less advantaged nations are so busy trying to survive that they cannot afford to be arrogant and grandiose. Millon and Davis, like Christopher Lash before them, attribute pathological narcissism to a society that stresses individualism and self-gratification at the expense of community, namely the United States.

They assert that the disorder is more prevalent, again, among certain professions with star power or respect and in the individualistic culture, they say, the narcissist is God's gift to the world.

In a collectivist society, the narcissist is God's gift to the collective. Millon quotes Warren and Capone, the role of culture in the development of narcissistic personality disorder in America, Japan and Denmark. He says, individualistic, narcissistic structures of self-regard in individualistic societies are rather self-contained and independent, but in collectivist cultures, narcissistic configurations of the we self denote self-esteem derived from strong identification with the reputation and honor of the family, groups and others in hierarchical relationships.

In other words, narcissism in collective societies are more likely to be inverted narcissists.

Still, there are malignant narcissists among subsistence farmers in Africa, nomads in the Sinai desert, day laborers in East Europe and intellectuals and socialites in Manhattan. Malignant narcissism is all pervasive and independent of culture and society.

It is true, though, that the way pathological narcissism manifests in his experience is dependent on the particulars of societies and cultures.

In some cultures, it is encouraged. In others, it is suppressed. In some societies, it is channeled against minorities. In others, it is tainted with paranoia. In collectivist societies, it may be projected onto the collective. In individualistic societies, it is an individual trait.

Yet, can families, organizations, ethnic groups, churches and even whole nations be safely described as narcissistic or pathologically self-absorbed? Can we talk about a corporate culture of narcissism?

Human collectives, states, firms, households, institutions, political parties, cliques, bands, gangs, acquire a life and a character of their own. The longer the association or affiliation of the members, the more cohesive and conformist the inner dynamics of the group. The more persecretary of numerous its enemies, competitors and adversaries, the more intensive the physical and emotional experience of the individuals it is comprised of.

The stronger the bonds of the locale, language and history, the more rigorous might an assertion of the common pathology be.

Such an oppressive and extensive pathology manifests itself in the behavior in each and every member of the group.

So, if the group is pathological, its members are being pathologized by virtue of or owing to the pathology of the group.

The pathology of a group defines, though often implicitly and in the underlying manner, a mental structure.

It has explanatory and predictive powers. It is recurrent and invariable as a pattern of conduct, melding distorted cognition, anomic features and stunted emotions.

And it is often vehemently denied on all levels, the group level and the individual level.

If you enjoyed this article, you might like the following:

Narcissist: Is He or Isn't He?

Narcissism is a spectrum of behaviors, from healthy to pathological, and the Diagnostic and Statistical Manual specifies nine diagnostic criteria for narcissistic personality disorder (NPD). A malignant narcissist is someone who has NPD and wreaks havoc on themselves and their surroundings. They feel grandiose and self-important, exaggerate accomplishments, and demand recognition as superior without commensurate achievements. They require excessive admiration, adulation, attention, and affirmation, and are interpersonally exploitative, devoid of empathy, and constantly envious of others.


Why Narcissist APPEARS So STUPID (Borderlines and Psychopaths, too!)

Narcissists, despite often possessing high intelligence, frequently exhibit profound stupidity in their interactions and decision-making due to cognitive distortions like grandiosity and a lack of empathy. This disconnect from reality impairs their ability to learn from past experiences, leading to repetitive mistakes and self-destructive behaviors. Their immaturity and reliance on external validation further contribute to their inability to navigate life effectively, making them susceptible to manipulation and poor judgment. Ultimately, their intellectual capabilities are overshadowed by their emotional and social dysfunctions, rendering them inadequate in real-life situations.


Collapsed Narcissist, Collapsed Histrionic

Narcissists and histrionics rely on a constant supply of admiration and validation, akin to an addiction, and when this supply is insufficient, they can collapse into a state of dysfunction. This collapse can manifest in various forms, including self-destructive behaviors, aggression, or withdrawal, as they struggle to cope with their feelings of inadequacy and trauma. Both types may develop delusional narratives or engage in antisocial behaviors as a means of compensating for their low self-esteem and perceived rejection. Ultimately, when their psychological defenses fail, they may act out destructively, causing harm to themselves and those around them.


Zombie Narcissist: Deficient Narcissistic Supply

When a narcissist fails to secure sufficient narcissistic supply, they experience withdrawal symptoms similar to those of a drug addict, leading to depression, disordered sleep, and changes in eating patterns. This deficiency results in violent mood swings, compulsive behaviors, and a retreat into a fantasy world where they can escape their painful reality. The narcissist begins to view those around them as mere tools for obtaining supply, leading to increased isolation and paranoia as they blame others for their lack of admiration. Ultimately, the narcissist's self-destructive tendencies emerge, revealing that their greatest enemy lies within themselves, as they squander opportunities and perpetuate their own suffering.


Depressive Narcissist

Pathological narcissism is often considered a form of depressive illness, with the life of a typical narcissist punctuated with recurrent bouts of dysphoria, sadness, hopelessness, anhedonia, loss of the ability to feel pleasure, and clinical forms of depression. Narcissists react with depression not only to life crises but to fluctuations in narcissistic supply and to the internal dynamics that these fluctuations generate. There are several types of dysphoria and depression in pathological narcissism, including loss-induced dysphoria, deficiency-induced dysphoria, self-worth dysregulation dysphoria, grandiosity gap dysphoria, and self-punishing dysphoria. Many narcissists end up delusional, schizoid, or paranoid to avoid agonizing and knowing depression.


Narcissists Hard to Spot

Narcissistic personality disorder is difficult to isolate with certainty, and it is important to distinguish between inherent traits and reactive patterns. Narcissism is considered pathological only when it becomes a rigid personality structure with primitive defense mechanisms and leads to dysfunctions in one or more areas of life. Pathological narcissism is the art of deception, and the narcissist projects a false self to manage social interactions. Victims of narcissists often find themselves involved before discovering the narcissist's true nature, and the narcissist emits subtle signals even on a first or casual encounter.


Acquired Situational Narcissism

According to Professor Robert B. Millman, pathological malignant narcissism can be induced in adulthood by celebrity, wealth, and fame. He calls this acquired situational narcissism and believes that it can be provoked by certain situations. However, it is likely that acquired situational narcissism is merely an amplification and manifestation of earlier narcissistic conduct, traits, style, and tendencies. Narcissists tend to gravitate to specific professions and settings which guarantee them access to fame, celebrity, power, and wealth.


What Narcissist Attributes to YOU

Narcissists exhibit a unique attribution style characterized by a rigid dichotomy between dispositional and situational attributions, depending on whether they are reflecting on positive or negative aspects of themselves. When considering their positive traits, they attribute success solely to their internal qualities, while negative outcomes are blamed on external factors, absolving themselves of responsibility. This inability to recognize the separate existence of others leads to a failure in attributing motives to other people's behaviors, as they perceive others merely as extensions of themselves. Consequently, traditional attribution theories fall short in explaining the cognitive processes of narcissists, necessitating a reevaluation of psychological frameworks to account for their distorted perceptions and interactions.


Narcissistic Defences and Personality

Narcissistic personalities are prone to depression, anxiety, shame, self-destructiveness, or rage when their habitual gratifications are threatened. Narcissism is an evolved version of the psychological defense mechanism known as splitting, where the narcissist either idealizes or devalues objects. The narcissist is obsessed with securing a reliable and continuous source of admiration, adulation, affirmation, and attention, and will become an evil person if they cannot secure positive supply. Narcissistic personalities slide the meanings of events to place themselves in a better light and maintain logical consistency while minimizing evil or weakness and exaggerating innocence or control.


Narcissists Hyperflexible, Not Rigid: Self-supply Psychopathy, Toxic Nostalgia

Pathological narcissism is characterized by hyper-flexibility rather than rigidity, as narcissists lack a core identity and experience identity diffusion, leading to a disjointed and unpredictable existence. This flexibility results in a kaleidoscopic life where narcissists frequently change jobs, interests, and relationships, reflecting their fragmented sense of self. The absence of a stable past forces narcissists to rely on fantasy and external validation, known as narcissistic supply, to maintain their grandiose self-image and sense of continuity. Ultimately, this hyper-flexibility highlights the precariousness of the narcissist's identity, as they oscillate between self-sufficiency and the need for external affirmation.

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