why are diamonds expensive and water basically free?

How I got here

Started with

Why are diamonds so expensive if they aren't that rare?

Ended at

Synthetic diamond

The Trail

1. “diamond water paradox” (google.com)
2. Paradox of value (en.wikipedia.org)
3. Marginal utility (en.wikipedia.org)
4. “are diamonds actually rare” (google.com)
5. De Beers (en.wikipedia.org)

   controlled most of the world's rough diamond supply for most of the 20th century

6. Engagement ring (en.wikipedia.org)
7. Synthetic diamond (en.wikipedia.org)

What I came away with

Marginal utility solves Adam Smith's paradox: water is essential, but the next glass is worth almost nothing. Diamonds add a twist, because for decades their price was propped up by De Beers controlling supply and by the 1947 'A Diamond Is Forever' campaign. Lab-grown stones are chemically the same thing, and their prices have fallen hard.

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