Just as there are many causes for low self-esteem, it is usually caused by an incident or series of incidents that occurred in one's childhood. These things could include, but are not limited to, getting picked on by other kids, not getting enough affection from one or both parents, or just a general sense of depression.
When a person with low self-esteem grows up, they tend to develop ways to cover up their feelings of inadequacy or insecurity that often mislead other people.
For example, some people might try to make themselves feel better by trying to intimidate others, say by using an expanded vocabulary, even if it means alienating those you are trying to communicate with. This gives the person a false sense of superiority.
Another problem with low self-esteem is the way to work through it. Say a person feels down about themselves because they are fat. Obviously, the solution would be a regimen of diet and exercise, but that requires self-discipline, self-motivation and dedication to the goal, which is something that most people with self-esteem lack. So instead of changing their lifestyle, and building themselves up in healthy ways, the turn to the easier, but unhealthy pattern of trying to tear other people down.
In the more extreme cases, they will do this to the point of being almost libelous, disregarding whether their attacks are even based on reality, which they often aren't.
Probably the most damaging is when the person with low self-esteem starts to use drugs, alcohol and/or food to try to alleviate their bad feelings. It only works for a short while and does nothing to alleviate the problem in the long run.
As it said in the article I linked to at the beginning of this post:
People with low self-esteem also have problems getting close to others. They are not comfortable with intimacy and create barriers to prevent people from coming close to them. They don't like to open up to people and to reveal their innermost thoughts. They may be nursing some old bad experience with someone who caused them a lot of pain or who let them down when they were most vulnerable. By forcing themselves to live in a world of self-denial they are doing a great damage to themselves. They fail to benefit from the company of others, and keep entrenching themselves deeper and deeper into their negative world. They may ultimately reach a stage where they may be declared beyond salvage.If you feel that you have low self-esteem, or know someone who does, please seek help.
But this is not good for society. People with low self-esteem must be helped. Their symptoms must be diagnosed, and help provided if they have to be turned into useful members of society. This help can be given by family members, friends, teachers or by trained psychologists.