Jung had a mental picture of the psyche as a giant warehouse of archetypes (the conscious representations of adaptive behaviours). Fantasies to him are just a way of accessing these archetypes and releasing them. Almost ex definitio, regression cannot be entertained by Jungian psychology. Any reversion to earlier phases of mental life, to earlier coping strategies, to earlier choices - in other words, any default - is interpreted as simply the psyche's way of using yet another, hitherto untapped, adaptation strategy. Regressions are compensatory processes intended to enhance adaptation and not methods of obtaining or securing a steady flow of gratification.
It would seem, though, that there is only a semantic difference between Freud and his disciple turned-heretic. When libido investment in objects (esp. the Primary Object) fails to produce gratification, maladaptation results. This is dangerous. A default option is activated: secondary narcissism. This default enhances adaptation, it is functional and adaptive and triggers adaptive behaviours. As a by-product, it secures gratification. We are gratified when we exert reasonable control over our environment, i.e., when our behaviours are adaptive. The compensatory process has TWO results: enhanced adaptation and inevitable gratification.
Perhaps the more serious disagreement between Freud and Jung is with regards to introversion. Freud regards introversion as an instrument in the service of a pathology (introversion is indispensable to narcissism, as opposed to extroversion which is a necessary condition for libidinal object-orientation).
As opposed to Freud, Jung regards introversion as a useful tool in the service of the psychic quest for adaptation strategies (narcissism being one of them). The Jungian adaptation repertoire does not discriminate against narcissism. To Jung it is as legitimate a choice as any. But even Jung acknowledged that the very need to look for a new adaptation strategy means that adaptation has failed. In other words, the search itself is indicative of a pathological state of affairs. It does seem that introversion per se IS NOT pathological (because no psychological mechanism is pathological PER SE). Only the use made of it CAN be pathological. One would tend to agree with Freud, though, that when introversion becomes a permanent feature of the psychic landscape of a person - it facilitates pathological narcissism.
Jung distinguished introverts (who habitually concentrate on their selves rather than on outside objects) from extroverts (the converse preference). According to him, not only is introversion a totally normal and natural function, it remains normal and natural even if it predominates the mental life.
This is where, to my mind, Jung missed the proverbial "narcissistic train". The habitual and predominant focussing of attention upon one's self, to the exclusion of others is THE definition of pathological narcissism. What differentiates the pathological from the normal and even the welcome is, of course, degree. Pathological narcissism is ex-clusive and all-pervasive. Other forms of narcissism are not. So, although there is no healthy state of habitual, predominant introversion, it remains a question of form and degree of introversion. Often a healthy, adaptive mechanism goes awry. When it does, as Jung himself recognised, neuroses form.
Freud regards narcissism as a POINT while Jung regards it as a
CONTINUUM (from health to sickness).
Kohut's Approach
In a way, Kohut took Jung a step further. He said that pathological narcissism is not the result of excessive narcissism, libido or aggression. It is the result of defective, deformed or incomplete narcissistic (self) structures. Kohut postulated the existence of core constructs which he named: the "grandiose exhibitionistic self" and the "idealised parent imago" [see below]. Children entertain notions of greatness (primitive or naive grandiosity) mingled with magical thinking, feelings of omnipotence and omniscience and a belief in their immunity to the consequences of their actions. These elements and the child's feelings regarding its parents (who are also painted by it with a brush of omnipotence and grandiosity) - coagulate and form these constructs.
The child's feelings towards its parents are reactions to their responses (affirmation, buffering, modulation or disapproval, punishment, even abuse). These responses help maintain the self-structures. Without the appropriate responses, grandiosity, for instance, cannot be transformed into adult ambitions and ideals.