Humans have an unlimited capacity to deceive themselves about themselves and others. Often that self deception is our personal spin control not only to make ourselves look better to others but even to ourselves. It can be conscious or unconscious.
Robert Trivers writes this in his new book, The Folly of Fools: The Logic of Deceit and Self-Deception in Human life. "We deny the truth to ourselves. We project onto others traits that are in fact true of ourselves - and then attack them. We repress painful memories, create completely false ones, rationalize immoral behavior, act repeatedly to boost positive self-opinion, and show a suite of ego-defensive mechanisms (p. 2)."
In other words, we have an amazing capacity to subvert truth to fit our preferred version of reality. It is directly tied to the sinful human condition and reflective of the truth Paul made in Romans 3:10ff where he says "There is no one righteous, not even one;" and goes on to describe the fallen human condition.
Consider instances where you are trying to get to the bottom of a conflict. Explanations of individuals on both sides make logical sense at first blush. Both sides blame the other and exonerate themselves. Of course, both cannot be true and upon further examination it becomes clear that both parties have constructed a view of reality - and of the other party - that makes them look innocent and the other look guilty. Clearly there is spin, reconstruction of reality and self deception going on. All of us are capable and all of us deceive ourselves in some areas of our lives.
We have all met people who were self deceived and particularly in conflict situations I have a healthy skepticism of what I hear until I have heard all sides. It is easy to listen to one party whose explanation makes all the sense in the world and come to conclusions that are erroneous because of their ability to spin their version of truth. In conflict situations, always keep an open mind until you have heard from all sides.
There are also people who literally live in an "alternative universe" and have such a skewed version of reality that they are disconnected from seeing how their own actions, attitudes and conclusions hurt other people. They may divide people into camps, those who are for them and those who are against them and fully believe that they are right in spite of any rational attempts to convince or show them otherwise.
This is pathological in nature but it is also an extreme version of self deception. Attempts to help them see an alternative reality are often fruitless because their personal defense mechanisms of self-deception are so strong. Often it is hiding deep insecurities and the self-deception is a way of coping with and covering those insecurities or unresolved issues. Unfortunately, that self-deception is projected onto others who are often hurt in the equation.
The most important questions we can ask, however, is about where we deceive ourselves. Where do we construct personal rationalisms for behaviors, habits or sin in order to allow us to continue those unhealthy practices and still feel good about ourselves? Where do we stretch the truth, accomplishments, or righteousness in order to try to look better to other people?
Why is this important? First, because truth matters and the more truth we understand about ourselves the healthier we are. Second, because self-deception unchecked leads to a life of untruth or lies which can become second nature if we allow it. Third, because our own self-deception is harmful to us and often harmful to others.
God is a God of truth and we are easily deceived. It is why David prayed, "Search me, O God, and know my heart; test me and know my anxious thoughts. See if there is any offensive way in me, and lead me in the way everlasting (Psalm 139:23-24). It is God who helps us understand the inclinations and deceptions of our own hearts as we develop the discipline of introspection and evaluation on our part.