what is the reason or purpose for us differentiating between beautiful and ugly.

Many answers have been given to this question. Before we try out such answers, consider one broad way to categorize them. Is experiencing beauty about getting us to do something, or is it about our thinking or feeling a certain way? In other words, if there’s a purpose or function to finding things beautiful, do you think that should be a pragmatic function issuing in action? Or can it be a contemplative function issuing in a kind of thinking (or feeling, etc.)?

This might even come down to Yes or No regarding the first question. Sometimes people say something like “The instinct to find people and things beautiful originates in sexual desire. It begins with our wish to propagate.” An answer like that connects the judgment of beauty with action. All the way back to Aristotle, philosophers have objected that beauty can be understood without reference to sexual desire; and in fact it can get complicated to try to trace every sense of beauty to such desire. Consider landscapes, sunsets, etc. More broadly, you could connect those judgments of beauty with a sense of safety. You find open grassy landscapes beautiful because your primitive ancestors connected such sights with safety from predators, etc. Again there is a pragmatic origin to the sense of beauty.

It can be difficult to connect every experience of beauty with such a pragmatic evolutionary argument. But this is the foundation of the discussion. If you want a function for beauty-experiences in the pragmatic, action-oriented sense of the word, that would be a place to start. Otherwise, a contemplative function suggests itself. And here you have greater latitude in explaining what the function of beauty might be.

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