Viewing nationalism as a kind of narcissism reveals the projective and self-regarding quality of the nationalistic discourse. Nationalism is a distorting mirror in which believers see their simple ethnic, religious, or territorial attributes transformed into glorious attributes and qualities. Though Freud does not explain exactly how this happens, the systematic overvaluation of the self results in systematic devaluation of strangers and outsiders. In this way narcissistic self-regard depends upon and in turn exacerbates intolerance. In conditions of peace, considerable blurring of ethnic boundaries may occur.
People center their identities on their individuality, rather than on their ethnicity.
They become husbands or wives, lovers or friends first, and members of a group second. The particular property of the narcissistic gaze is that it glances up at the Other only to confirm its differences. Then it looks down again and turns its gaze upon itself. It does not engage with the Other in any real sense. Narcissist anxiety expresses itself chiefly in passive self-absorption.