This post is a summary of Nancy McWilliam's chapter on Paranoid personalities in her book Psychoanalytic Diagnosis.
Paranoid personalities, like all of the personality types are on a spectrum. One doesn't have to live in a bunker or present stereotypically to still function primarily with paranoid defenses. In general, functioning this way means taking perceived negative attributes of oneself and projecting them onto the outside world and then reacting to the outside world as if it is the source of the threat. We also must consider that paranoid people may also be genuinely in perilous situations. As they say, "just because you're paranoid doesn't mean someone isn't out to get you." Cold comfort for the one suffering from paranoid persecutory thoughts.
It's thought that paranoid people may innately be less agreeable temperamentally. This might explain more of their predisposition to be more outwardly hostile toward the outside world rather than manage their own feelings of fear and anger. Interestingly, it's thought that because of the depth of fear in paranoid personality types, they tend to become addicted to downers such as alcohol and benzos versus other psychotropic drugs that operate on mood-boosting neurotransmitters.
What are some examples of how a paranoid person's projection of their own fear, anger, or guilt can manifest? A paranoid person who is insecure about taking a standardized test may become preoccupied with those who require and administer them, seeing them as a malevolent cabal. A paranoid person who has social anxiety may develop hostile feelings toward the host, imagining they only invited them to mock or humiliate them. There are many examples of how this paranoid personality defense can show up, but the critical feature is the relationship between one’s inner feelings and a perceived hostile outside world that becomes symbolic of those feelings. Paranoid personalities also carry a tremendous amount of guilt which compounds their fears of an external world that seeks to punish them.
Obviously, relationships with paranoid people can be very difficult since they very often twist things around. For example, rather than letting oneself feel loved, the fear of being this vulnerable may lead the paranoid person to believe they are instead hated. This then justifies and aggressive or hostile actions. This is a common dynamic with those who pick bar fights. They fear same-sex intimacy so much that they unconsciously single-out someone they may actually want to connect with and poison any possibility of friendship with aggression.
People whose parents have chronically overpowered them may end up with paranoid personalities. On the extreme end this can take the form of emotional and physical humiliation. On a milder end can take the form of constant, cutting sarcasm. Other traumatic examples that may lead to someone developing a paranoid personality include confiding in a parent about a molestation only to have it denied or blamed on the victim. This might result in child internalizing what they just learned, "your feelings must be denied and you are also to blame for your painful emotions." One can see then the child then has no choice but to feel guilty about their own emotions but also not feel that they are able to process them or admit they are having them. Since the external authority figure is also the source of this learning, the child also learns to feel hostile and suspicious of external authorities.
Because of this process that fuses external with internal, paranoid people have a tendency, somewhat like narcissists, to make everything that happens about them. But rather than seeking external validation and narcissistic supply, paranoid people are wracked with guilt about everything being about them. Paranoid people can be similar to psychopaths in that they fixate on power and acting out, but they differ in that paranoid people do have a capacity for love and friendship, it's just that they have a deep fear of both. To befriend a paranoid person, one can try things such as self-deprecating humor. The paranoid person may appreciate that you are humiliating yourself instead of them and may perceive you as less of a threat.
Personality Analysis of the Paranoid Personality References
McWilliams, N. (2011). Psychoanalytic diagnosis: Understanding personality structure in the clinical process (2nd ed.). Guilford Press.