Extrinsic vs intrinsic

There is a deep divide between what our economy provides and what makes people well. Our economy is focussed on providing extrinsic rewards when people are more genuinely motivated and rewarded by intrinsic satisfactions.

If you go to university to learn and fulfil yourself, these are intrinsic benefits. If you go to university to get a degree, that is an extrinsic benefit. Whilst many benefits have some combination of the two, the distinction between them is crucial to understanding our way of life, and what’s most important.

The things we value the most are not things. They include positive relationships, meaningful experiences and opportunities to fulfil our potential in whatever we choose to do. By-and-large you can’t commercialise these intrinsic aspects of people’s lives. They are not like extrinsic commodities that can be packaged and priced.

The study of intrinsic benefits

Psychologists like Mihaly Csikszentmihalyi and Tim Kasser have studied well-being and what makes people happy. Their findings are at odds with most commercial messages and advertising. Contrary to the bulk of advertising messages, buying and having stuff doesn’t make you happy in the long run, indeed it can lead to unhappiness.

Csikszentmihalyi found that people’s most cherished belongings are things like heirlooms, gifts, photos of loved ones, mementos of important life experiences, musical instruments, worn-in clothes, art their children did, and items that bring back fond memories or offer a comforting familiarity and order in peoples’ lives.

Of course everyone needs a range of extrinsic goods and services, particularly the essentials like food, clothes and a variety of household goods like kitchenware, furniture, bedding, tools and appliances. However, once you have the essentials, there is very little more that you genuinely need.

Tim Kasser provided evidence that materialists are more insecure, have lower self-esteem, have worse relationships and are less authentic than people who are less materialistic. Kasser makes the point that people use material things to try and fill the gap between their idealised selves and their real selves, a gap he calls ‘discrepancy’. The problem is that extrinsic, material things can’t fill an intrinsic gap. Any perceived shortcomings or insecurities a person has can only be solved internally.

The different roles of materialism

Csikszentmihalyi makes the distinction between what he calls instrumental materialism and terminal materialism. Instrumental materialism is instrumental in helping to order consciousness and provide intrinsic satisfaction. Terminal materialism is materialism that leads nowhere. It is the acquisition of things for the sake of acquiring them. The upside of buying things for the sake of it, namely the thrill of the purchase and keeping up with the Joneses, is significantly offset by the cost to wellness of being materialistic – whether it is through overwork, debt, inner conflict, guilt or remorse.


If a business, or the whole economy for that matter, uses peoples’ insecurities to profit themselves, it is immoral. It is dishonest because it is a lie and the stuff they are peddling won’t fill an existential hole. It is also corrupt to take advantage of people’s weaknesses.

An economy should exist to provide well-being for all people. The economy should provide only enough goods and services, of the right kind, to benefit people’s physical and mental health.


Kasser, T. (2006). The high price of materialism. Cambridge, MA: MIT Press.

Csikszentmihalyi, M., & Rochberg-Halton, E. (2002). The meaning of things: domestic symbols and the self. Cambridge: Cambridge University Press.