The myth is mentioned on the prologue. I really need to know how it relates to the story of the boy.
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The story of Narcissus highlights the question of selfishness, a question which is at the center of The Alchemist. Is it possible to pursue one's own personal desires while living a good life? In the case of Santiago, the answer is a resounding yes - making the image of Narcissus (who became a flower through his selfishness) especially appropriate.