Freud observed primary narcissism in the behavior of children and primitive cultures. The shared belief in magic reflects an auto-erotic mindset, as it assumes the ability to change the external world with internal powers.
Such childlike autoeroticism develops from a sense of self-preservation. This ego-libido stands in contrast to the object-libido, which is a love for others. The two forms of libido interconnect and reconcile with each other in different ways within each person.
Freud asserts that castration anxiety, the fear in males of losing a penis or the envy in females for lacking a penis, emphasizes the connection between the ego and the libido in a young child's mind, as it exhibits the basic fear of the loss of self.
As children develop and encounter cultural restrictions that distinguish the internal from the external, they either continue to engage in selfish pleasures or repress their desires. The latter group develops an ideal ego to be the new focus for autoeroticism.
CriticaLink.com explains that secondary narcissism "arises in pathological states such as schizophrenia in which the person's libido withdraws from objects in the world and produces megalomania." Unlike the naturally-occurring primary narcissism, the secondary form constitutes a mental illness.
In his 1914 essay "On Narcissism: An Introduction," psychoanalyst Sigmund Freud developed the idea of primary narcissism, which researcher Christian Hubert later defined as "that primal state where id, ego and external world are not differentiated."