My wife acquired her first childhood friend in an explicit pencil rental agreement.

It's just a recategorization of needs, though.  If utility function is $$u(x,y)$$ where $$x$$ is material goods and $$y$$ is non-material goods, it's reasonable to assume that both $$u_{xx}(x,y) < 0$$ and $$u_{yy}(x,y) < 0$$, so diminishing marginal utility in both.

So, I don't think it says anything deep about material vs. non-material desires, other than people need a variety of goods both material and immaterial.

The bigger question is the degree to which all human needs can be served by the market.  People have an aversion to notions of buying love or friendship on the market, and it's not obvious that the market can fulfill those needs.

SimpleStacker

> The first unit of a good serves the most important need, while additional units satisfy progressively less important wants.

That’s the real logic of the principle. It’s not really about whether we’re insatiable or not, just recognizing that we have preferences and do what we want most within our constraints. 

Relax the constraints and we do more, but the extra things will be less valuable to us than the first things.

Undisciplined

 is one of the foundational principles of economics, but its significance extends far beyond the marketplace. The principle states that as a person acquires additional units of a good, the satisfaction gained from each successive unit tends to decline. The first glass of water relieves intense thirst, the second provides comfort, and the third offers only modest enjoyment. While economists developed this concept to explain value and choice, it also reveals a deeper truth about human existence.

At its core, diminishing marginal utility reflects the finite character of both human beings and the world they inhabit. Material goods satisfy real needs, but no good can provide unlimited satisfaction. Every appetite eventually reaches a point of saturation, and every created thing exists within natural limits. What can be expressed as an economic principle is therefore really a philosophical insight into the human condition. It reminds us that accumulation alone cannot provide lasting fulfillment and that human flourishing requires goods that transcend material consumption.

The principle emerged from the nineteenth-century marginalist revolution, particularly through 

. Menger argued that value arises from the importance individuals assign to the needs goods satisfy. Human beings rank their needs according to urgency. The first unit of a good serves the most important need, while additional units satisfy progressively less important wants. Consequently, the value attached to each additional unit declines.

econ

> [The law of diminishing marginal utility](https://www.investopedia.com/terms/l/lawofdiminishingutility.asp) is one of the foundational principles of economics, but its significance extends far beyond the marketplace. The principle states that as a person acquires additional units of a good, the satisfaction gained from each successive unit tends to decline. The first glass of water relieves intense thirst, the second provides comfort, and the third offers only modest enjoyment. While economists developed this concept to explain value and choice, it also reveals a deeper truth about human existence.
>
> At its core, diminishing marginal utility reflects the finite character of both human beings and the world they inhabit. Material goods satisfy real needs, but no good can provide unlimited satisfaction. Every appetite eventually reaches a point of saturation, and every created thing exists within natural limits. What can be expressed as an economic principle is therefore really a philosophical insight into the human condition. It reminds us that accumulation alone cannot provide lasting fulfillment and that human flourishing requires goods that transcend material consumption.
>
> The principle emerged from the nineteenth-century marginalist revolution, particularly through [the work](https://www.researchgate.net/publication/377105159_Carl_Menger's_Alternative_to_the_Classical_Theory_of_Value_and_Distribution_and_Marginalism) of [Carl Menger](https://www.econlib.org/library/Enc/bios/Menger.html). Menger argued that value arises from the importance individuals assign to the needs goods satisfy. Human beings rank their needs according to urgency. The first unit of a good serves the most important need, while additional units satisfy progressively less important wants. Consequently, the value attached to each additional unit declines.
>
> [**...read more at econlib.org**](https://www.econlib.org/econlog/human-flourishing-and-marginal-utility)