The paranoid aren't necessarily wrong when they express a fear that people can read their minds; people can in a sense. It is the paranoid affect, the fear, that pours into the other and affects the other similarly, and upon seeing that fear reflected back, the paranoid become even more fearful, amplifying the affect and spreading the affect more intensely and widely.
Paranoia seeks to recognize itself in the other to confirm itself, to validate itself: I fear and hate that thing, and look, it fears and hates me! It must seek to eliminate me as a threat, as I do the same for it.
It is a form of communication that confirms itself and generates its own landscape.
It is the establishment psychiatrist, upon pathologizing the paranoiac and seeking a cure, who refuses to see the basic humanity in the paranoiac, which would necessitate letting in that paranoid affect and all of the pain that comes with it. And this is the difficulty with recognizing humanity: it takes letting it in.
This is a basic characteristic of Western culture in general. Even though some of its thinkers have a clear grasp on this, Western culture often fails to grasp the nature of the dialectic, or the presence of the other as oneself, as opposed to some backdrop or object that is to be traversed or manipulated.
And that is because there is a clear direction of power, and of violent expansion. To see the other as oneself is to become engulfed in the fire that one is riding up upon, while to see the other as an object or as inhuman is to neutralize and insulate the fire, which only serves to compress it all the more violently for its eventual return.