The cultivation of more and better empathy has become a popular solution to the social problems of violence and xenophobia. Recent self-help books promise to teach us how, via empathy, we can reduce misunderstandings and conflicts so that we may love our racially or religiously different neighbors as ourselves—while at the same time competing with them in our neoliberal age. Psychology as a field has championed the benefits of empathy, devoting much research to the topic. Employing Lacanian psychoanalytic theory in the practice of critical psychology allows us to understand when and why empathy fails as a proposed curative factor in social efforts to reduce hostility toward otherness. For instance, hatred can be seen as a passion from which we derive jouissance, rendering it difficult to relinquish. Lacan’s notion of the structure of subjectivity along with jouissance, extimacy, and the capitalist and master’s discourses will be employed in this paper to critique psychology’s view of empathy.