The “observing ego” is that ability to self-monitor and make appropriate choices about public, social behavior.  Without this faculty one is knee-deep in abject narcissism.  And I argue that all of us have this problem to some degree, individually and collectively.  That is why we need to be socially involved AND to be sensitive to the feedback we get from others, explicit feedback and feedback that is more subtle.  Some have described it as having “antennae”.  And close, intimate relationships is the arena where the feedback is the richest as those people who are “close” and “intimate” see us best.

Here is Shakespeare’s observation re this issue in Julius Caesar:

And since you know you cannot see yourself,
so well as by reflection, I, your glass,
will modestly discover to yourself,
that of yourself which you yet know not of.