the Western Egoic self has pragmatic value. the Indic Atman has transcendent value. The heterodox Indic Anatman has dialectical value in allowing us to think of our experiences as being present but not belonging to us in any significant way. We don't have to identify with them.
in the western tradition the word "ego" is from the Latin for "I, myself" and does not have the connotation of being illusory. that's an interpretative stance that goes mostly with the orthodox Hindu schools. I see three separate views on ego that ought to inform each other...
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