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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.

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Narcissist's Pathological Space: His Kingdom

The pathological narcissistic space is a geographical area, group of people, or an abstract field of knowledge in which the narcissistic pathology reaches its full expression and effectiveness. It is a territorially expanded false self that is achieved via sources of narcissistic supply. The existence of the pathological narcissistic space is independent of the existence of sources of narcissistic supply. The pathological narcissistic space constantly consumes and drains narcissistic supply, and it generates negative narcissistic accumulation.


Narcissist's Routines

Narcissists have a series of routines that are developed through rote learning and repetitive patterns of experience. These routines are used to reduce anxiety and transform the world into a manageable and controllable one. The narcissist is a creature of habit and finds change unsettling. The narcissist's routines are often broken down when they are breached or can no longer be defended, leading to a narcissistic injury.


How Narcissist Is Mortified

Narcissistic behavior can be modified through treatment, but pathological narcissism is unchangeable. Narcissists have empathic aphantasia, meaning they cannot visualize other people in an empathic way. The misinformation effect is a bigger problem for narcissists than for normal people because they have severe problems with their memory and are dissociative. The longer the delay between the presentation of the original event and the post-event information, the more likely it is that individuals will incorporate the misinformation into the new memory.


Old-age Narcissist

Narcissists age without grace, unable to accept their fallibility and mortality. They suffer from mental progeria, aging prematurely and finding themselves in a time warp. The longer they live, the more average they become, and the wider the gulf between their pretensions and accomplishments. Few narcissists save for rainy days, and those who succeed in their vocation end up bitterly alone, having squandered the love of family, offspring, and mates.


Narcissism: Blessing or Dysfunction?

Pathological narcissism is an addictive behavior that involves an impaired, dysfunctional, and immature true self coupled with a compensatory piece of fiction known as the false self. Narcissists are obsessed with delusions of fantastic grandeur and superiority, and they are very competitive. They are driven, relentless, tireless, and often ruthless. However, three traits conspire to render the narcissist a failure and a loser: his sense of entitlement, his haughtiness and innate conviction of his own superiority, and his aversion to routine.


Narcissist Mother's Pet: Her Child

The study of narcissism is still unresolved, with two central debates remaining undecided. The first is whether there is such a thing as healthy narcissism or if all manifestations of narcissism in adulthood are pathological. The second debate is whether pathological narcissism is the result of abuse or spoiling. Narcissism is a defense mechanism intended to shield the narcissist from an injurious world, but as they turn adult, it becomes the main source of hurt and the main generator of injuries. Some narcissists are forced to retreat into a land of delusion and fantasy, even into psychosis.


Narcissist: Drama Queen in Pathological Narcissistic Space

Narcissists have a deep-seated need for excitement and drama to alleviate their boredom and melancholy. They create an imaginary environment called the pathological narcissistic space, where they seek admiration, adoration, approval, applause, or attention. Narcissistic supply substitutes for having a real vocation or avocation and actual achievements. The narcissist's two mechanisms of establishing a morphological narcissistic space and the urge to move continuously are completely incompatible, leading to the narcissistic condition.


Shame, Guilt, Codependents, Narcissists, and Normal Folks

Shame motivates normal people and those suffering from cluster B personality disorders, but it motivates them differently. Shame constitutes a threat to normal people's true self, and it constitutes a threat to the false self of narcissism. There are two varieties of shame when we talk about narcissists in effect. There is narcissistic shame, which is the narcissist's experience of the grandiosity gap and its affective correlate. The greater the conflict between grandiosity and reality, the bigger the gap and the greater the narcissist's feelings of shame and guilt.


Narcissist: Your Pain is his Healing, Your Crucifixion - His Resurrection

Narcissists need their victims to suffer to regulate their own emotions and feel a sense of control. They keep a mental ledger of positive and negative behaviors, with negative behaviors weighing more heavily. Narcissists need counterfactual statements to maintain their delusion of being special and superior. The grandiosity gap is the major vulnerability of the narcissist, and they are often in denial about their limitations and failures.


Narcissist's Shame and Guilt

The grandiosity gap is the difference between self-image and reality, causing feelings of guilt and shame in narcissists. Narcissistic shame is the pervasive feeling of worthlessness experienced by the narcissist due to the absence or deficiency of narcissistic supply. The narcissist adopts primitive psychological defense mechanisms to counter this shame, such as addictive or impulsive behaviors. Guilt is an objectively determinable philosophical entity, while shame is the outcome of avoidable outcomes.

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