Birth trauma refers to the psychological distress an infant experiences during the transition from the womb to the outside world, contributing to early anxieties. Melanie Klein, a psychoanalyst, introduced the concept of the paranoid-schizoid position to explain how infants cope with these anxieties by splitting their internal and external worlds into "good" and "bad" parts. This early mental state, characterized by splitting, projection, and introjection, is central to how individuals manage emotional conflicts throughout life.

In the paranoid-schizoid position, infants divide both themselves and others (especially the mother) into good and bad objects. For example, they project loving feelings onto a "good" breast, which provides comfort and care, and hating feelings onto a "bad" breast, which is frustrating and threatening. This cycle of projection and introjection helps the infant cope with anxiety by separating their experiences into positive and negative extremes. Omnipotence and idealization play a role here—negative experiences are denied, while positive ones are exaggerated for protection.

This process of splitting is crucial for healthy development, as it allows the infant to hold onto enough good experiences to form a stable sense of self. Over time, these positive experiences help integrate the contrasting parts of the self and others, leading to the next developmental phase, the depressive position, where the infant begins to reconcile the good and bad aspects of people and situations.

However, when splitting becomes extreme, it leads to fragmentation, where both the self and external objects are divided into smaller, disconnected pieces. Persistent fragmentation can weaken the infant's fragile ego, leading to more severe emotional disturbances. This aspect of the paranoid-schizoid position can have long-lasting effects if not eventually integrated.

Klein believed that both innate factors, such as the balance between life and death instincts, and external factors, like maternal care, influence the infant’s progression through the paranoid-schizoid position. While most infants outgrow extreme defenses like splitting and paranoia with proper care, Klein noted that schizoid ways of relating can resurface throughout life. These mental states remain key defense mechanisms that individuals may revert to in times of stress or anxiety.