The problem with your argument is that extending your own players is not the same as signing free agents. In the case of younger players, there is often a discount involved in an extension because the reserve system gives leverage to the clubs. Even for players with more than 6 years of service time, the current club is often taking on additional risk by extending a year or more prior to free agency, and in exchange usually pays less per year than would result from free agency. And even in the scenario where there is no direct financial benefit, a player's current organization will have the most knowledge about his abilities, health, and makeup, all of which are critical in deciding how much to offer. So it's no surprise that extended players are safer bets compared to free agents (born out by studies - there was one on Fangraphs this past off-season). The Twins have still managed to botch the handling of their own players, of course (e.g., Blackburn), but the bottom line is that the excessively risk-averse Twins view free agents in a completely different light than their own players. They never would give a free agent a Mauer-like contract, so that decision is utterly irrelevant to the issue of whether the Twins are unwilling to spend money on free agents. The simple fact is that they are, while other clubs- who fully understand the downsides to the free agent market - nonetheless rely on it as an important source of players.