The ego performs an essential function: it provides the sense of identity that helps us navigate the physical world, enabling us to survive and thrive. Without this sense of ‘I,’ our ability to think, speak, feel, and remember would cease to function as we know it today. The problem arises when this sense of identity becomes so powerful that our perception of who we truly are, as pure consciousness, gets buried under its weight. At that point, our inner self or Atman, which should be our true identity, becomes overshadowed by an external experience that we mistakenly identify with as who we are.

What is the ego?
The ego is a false sense of self. It’s an object referral, meaning it relies on external validation for its existence. Some philosophers say that we can’t even say I until we have an experience in the outside world and then we assign that experience to ourselves. Our feelings, thoughts, and ideas are all part of this limited identity. What’s important to remember is that our true self, or Atman, cannot be found in any object or experience outside ourselves.
How does the ego shadow the self?
The ego shadows the self when it is not fully awake. Instead of recognizing our actual status as unlimited, non-local, pure consciousness, our sense of identity becomes overshadowed by external experiences. This can be a natural consequence of object referral; in other words, when we become so consumed by thoughts and feelings that we forget who we truly are.
In this weakened state, the ego can limit our sense of self-worth and cause us to feel separate from others. We become victims of object referral, seeking validation and approval outside ourselves rather than learning how to receive them from within. We start to worry about what people think of us, whether they like us or want anything to do with us. We spend more time looking at ourselves in the mirror than caring for our body’s health. And worst yet, we start acting out things such as anger or lust because these emotions don’t seem bad enough on their own.
The problem of limited identity
This process is called object referral. When we refer to objects, it is as if they are inside us. Consequently, we identify with them and take ownership of them. So, when our sense of selfhood becomes dominated by external objects, then the ego shadows our true identity—our inner self or Atman, which is unlimited and transcendent. In this weakened state, instead of knowing that we are pure consciousness without borders, our sense of identity becomes overshadowed by our external experience.
Steps to Take to Awaken the Self
1. Understand that your identity is an object reference and not an essential part of who you are. 2. Remember the Truth about what you are – unlimited, non-local pure consciousness. 3. Free yourself from identification with body, mind, and thoughts by understanding that they are temporary objects arising in awareness and not solid entities that define who you are. 4. Understand that object references arise in awareness to create a sense of self, and this self is constantly changing.–MM
References:
https://thejoywithin.org/spirituality/separating-soul-from-ego-how-to-identify-spirit-vs-self
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