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It is, of course, the study of dreams which has taught us what we know of the psychical characteristics of the state of sleep. It is true that dreams only show us the dreamer in so far as he is not sleeping; nevertheless they are bound to reveal at the same time characteristics of sleep itself. We have come to know from observation some peculiarities of dreams which we could not at first understand, but which we can now fit into the picture without difficulty. Thus, we know that dreams are completely egoistic and that the person who plays the chief part in their scenes is always to be recognized as the dreamer. This is now easily to be accounted for by the narcissism of the state of sleep. Narcissism and egoism, indeed, coincide; the word narcissism’ is only intended to emphasize the fact that egoism is a libidinal phenomenon as well; or, to put it in another way, narcissism may be described as the libidinal complement of egoism. The ‘diagnostic’ capacity of dreams - a phenomenon which is generally acknowledged, but regarded as puzzling - becomes equally comprehensible, too. In dreams, incipient physical disease is often detected earlier and more clearly than in waking life, and all the current bodily sensations assume gigantic proportions. This magnification is hypochondriacal in character; it is conditional upon the withdrawal of all psychical cathexes from the external world back on to the ego, and it makes possible early recognition of bodily changes which in waking life would still for a time have remained unobserved.

A dream tells us that something was going on which tended to interrupt sleep, and it enables us to understand in what way it has been possible to fend off this interruption. The final outcome is that the sleeper has dreamt and is able to go on sleeping; the internal demand which was striving to occupy him has been replaced by an external experience, whose demand has been disposed of. A dream is, therefore, among other things, a projection: an externalization of an internal process. We may recall that we have already met with projection elsewhere among the means adopted for defence. The mechanism of a hysterical phobia, too, culminates in the fact that the subject is able to protect himself by attempts at flight against an external danger which has taken the place of an internal instinctual claim. We will, however, defer the full treatment of projection till we come to analyse the narcissistic disorder in which this mechanism plays the most striking part.