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Why Diamonds Are Worthless - Discover the Law of Value

Updated on August 24, 2016
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Mario Buildreps is a graduate engineer. Become aware of topics in a way you have never heard before.

Diamonds are an expression of abundance. It is an animalistic way to determine that everything else also might be present.
Diamonds are an expression of abundance. It is an animalistic way to determine that everything else also might be present. | Source
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The Roots of the Law of Value

The Law of Value can be applied to every little corner of our economy. When something becomes more expensive, it also becomes less important for instant survival.

The Law of Value has its roots in the animal world. When a male animal is able to show to the other sex that it can afford useless trophies, the female animal assumes an abundance of resources of any kind, which makes the male an attractive mating partner. The male might have good genes for offspring, although this is not measured in an exact way, but indirectly via the abundance in means.

When a man can afford a very expensive diamond, the female sex assumes an assurance of basic needs like food, clothes, housing and a solid future. It wouldn't be logical that a male would waste his last penny on something inedible, since his position wouldn't be sustainable for a long time.

In other words, showing around with useless assets, is an expression of power. An animalistic way to distinguish yourself from others.

Definition of Value

An amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else; a fair price or return.

Everything is Turned Upside Down

The modern economy turns real value upside down. During wartime it is temporary the law is temporary disabled.
The modern economy turns real value upside down. During wartime it is temporary the law is temporary disabled. | Source

Choose Your Most Valuable Item

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The Law of Value

The Law of Value reveals something very odd. That is: The more you really need something, the less it is worth. Doesn't that sounds strange?

The economic Law of Supply and Demand doesn't seem to count at all. That might be so because some necessities like breathable air are beyond the scope of economy.

Well, let's have a look if this is true.

When you look around, you'll notice there are 'things' that you might not pay much attention to, because they are abundantly available, and therefore taken for granted.

Some things, like air, are just there. It costs us barely anything, which creates an illusion of no value. You can pollute the atmoshpere with your exhaust pipe, because it doesn't cost you anything!

The air we breath, the water we drink, the food we eat, the sun we enjoy, the clothes we wear cost us barely anything compared to useless objects like Iphones, diamonds, cars, powerboats and private jets.

Strange, isn't it? True value appears to be inverted to illusionary value. It becomes even stranger, when you see these two different values can be classified under a mathematical law: the value of something to survive is reciprocal to its economical value.

This means that real needs have no economical value at all! Print this in your head.

The more basic, the less expensive. The least expensive things are commonly valued the least as well. Things that cost us nothing aren't valued.

The Economy is Based on the Value Inverter

The value of breathable air is almost infinite. The costs are almost zero. The value inverter appears to apply to almost everything around us.
The value of breathable air is almost infinite. The costs are almost zero. The value inverter appears to apply to almost everything around us. | Source

The Paradox of Value

"The paradox of value (also known as the diamond–water paradox) is the apparent contradiction that, although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market. The philosopher Adam Smith is often considered to be the classic presenter of this paradox. Nicolaus Copernicus,[1] John Locke, John Law[2] and others had previously tried to explain the disparity."

--Wikipedia

Source

Planet Earth

Without planet Earth we would just survive for about a few seconds. Of course we won't be born in the first place without Earth, but nevertheless, it's an imaginary way to show how much we depend on earth for our instant survival. Earth is therefore priceless.

Homo Sapiens that ought to be an autonomous thinking being, seems to be aware of this fact just a few seconds a year, after which they delve again into their own daily worries.

Earth offers many natural resources that are increasingly exploited in order to keep the economy running like it is, and preferably a few percentages more each year. An economy that isn't growing anymore is the worst doom scenario Homo Sapiens can imagine - recession.

Planet Earth is the largest source of income that is simply there. There's no industry not depending on Earth's resources. Nothing has to be produced, only to be extracted from the soil. The extracted mineral resources are arrogated by just a few monopolies, while it is our common property.

Compare it with someone selling your shoes while you’re still wearing them!

Source

Breathable Air

We can just survive for about 3 minutes without air, which implies that air should be invaluable.

But the strange thing is that we pollute our air with cars, wood stoves, camp fires, air planes and other polluters. This behaviour is similar with animals that pollute their own nest.

We appear to exchange priceless things for almost worthless things. Our drivers to do this is to show how successful we are, which is an expression of an animalistic consciousness. Some behaviour can also be the result of a need for comfort or laziness.

There are changes going on, like cleaner engines in cars, particulate filters in diesel engines and catalysts on the one hand. And air-purifying respirators and cans with fresh air on the other hand. Clean air that used to be free becomes an increasing part of the economy. Would this be coincidental? Or is there an underlying cause and effect?

There are clear patterns that economical assets only move upwards. Cars are getting bigger, computers become faster, people getting fatter, people getting older, the economy becomes complexer, etcetera. This counts also for the 'price' of clean air. The price tag of cleaner air has made lift-off. Clean air has become part of the economy and starts to get a little price tag. This price will grow in the future, and will become one of the most valued products within a few decades.

Clean air won't be free anymore. It's all there, in the math, the constant c changes with time - it appears to be a slow changing variable.

How Long Can You Survive Without?

Item
Time
True Value After Inversion
Earth
3 seconds
Priceless
Air
3 minutes
Priceless
Water
3 days
Priceless
Sleep
10 days
Extremely valuable
Food
30 days
Extremely valuable
Clothes
30 days
Extremely valuable
Sunlight
90 days
Valuable
Shelter
300 days
Valuable
Iphone
Worthless
TV
Worthless
Car
Worthless
Air plane
Worthless
Diamonds
Worthless
∞ = infinite
The list of the above items plotted along the 'value inverter'.
The list of the above items plotted along the 'value inverter'. | Source

Potable Water

Potable water is the next most valuable thing. We can only survive for about 3 days without potable water. Potable water used to be free everywhere, until we polluted most of the natural sources, and became dependent of mineral water in bottles.

Water is cheap compared to all redundant luxury products. For example 1 gallon of mineral water costs a few dollars. The price tag of an Iphone 6 equals potable water for one person for about three years. Isn't that weird?

When you compare something useless with something absolutely necessary you'll end up with a strange distorted image. The only connection between the two is money (via the value inverter you can determine the true value). Money is besides a way to exchange goods, also a virtual way of measuring value. Everything has a price tag. The only thing you must do, is invert it first before you can determine its true value. That's something that we should teach our children!

In our economy the value of an Iphone is about 350 times more than our own life! How is this measured? Simply by equalling the two things, with as reference the 3 days we can survive without water.

The Balance Point k

α and β should be in balance. The limit to make this possible lies somewhere between shelter and TV. The whole area of γ cannot be sustained by the earth.
α and β should be in balance. The limit to make this possible lies somewhere between shelter and TV. The whole area of γ cannot be sustained by the earth. | Source

One More Thing: α = β

In the graph above is the constant k introduced in the formula to show the balance between supply and demand. What the earth gives is α, and what we take from earth is β.

To live in harmony with mother nature: α = β. The balance point lies somewhere between shelter and TV.

You see easily what happens to the balance when you add the area γ to it. There arises a huge disbalance between what earth can supply and what we take.

Do you see it? That's it then, folks!


© 2015 by Buildreps

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    • Buildreps profile image
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      Buildreps 2 years ago from Europe

      Thank you for your interesting comment, Rochelle. The ideas of Tesla are awesome, on the other hand is wireless transporting of energy not without risk. Look at the current discussions around UMTS and the alleged dangers of it.

      Energy should be free to everyone up to a certain amount. The earth is of the people. Let's say when people become energy abusers, they should be penalized.

    • Rochelle Frank profile image

      Rochelle Frank 2 years ago from California Gold Country

      An interesting and 'valuable' commentary. I can remember hearing a war story where diamonds were traded for potatoes, which at the time were very valuable.

      On another note Nicolai Tesla was very determined to try tomake a wireless grid that would supply free electricity to everyone. He was stopped by people who wanted to profit from supplying power.

      Think of what (electric) power costs today.

    • Buildreps profile image
      Author

      Buildreps 2 years ago from Europe

      Thanks for the great comment, Peter. This mathematical analyses shows clearly that money and value are artificial constructions to create indeed scarcity like you very well state.

    • HSP Connections profile image

      Peter Messerschmidt 2 years ago from Port Townsend, WA, USA

      Very interesting article, and so very true. It seems to me that so many of our troubles are created by a values system that artificially "creates" scarcity. We are told to "be afraid" that there is not enough of things and that we will somehow be "less" if we don't have them... and then in our greed/fear to not "be without" we actually CREATE the scarcity. And so, companies can charge money for everything from diamonds to water... it's all artificial, really. Thank you for this article.

    • Buildreps profile image
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      Buildreps 2 years ago from Europe

      Thanks for your comment, torrilynn.

    • torrilynn profile image

      torrilynn 2 years ago

      A really great read. thanks for the hub and for the information. Best of wishes.

    • Buildreps profile image
      Author

      Buildreps 2 years ago from Europe

      Thanks for commenting, Rota. It makes me happy that you appreciate the concept.

    • Rota profile image

      Rota 2 years ago

      What a hub! The concept will stick with me from now on. Thankyou

    • Buildreps profile image
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      Buildreps 2 years ago from Europe

      Thanks for your great comment, TIMETRAVELER2. You're right. A higher consciousness is the only way to escape from this deadlock.

    • TIMETRAVELER2 profile image

      Sondra Rochelle 2 years ago from USA

      This is absolutely brilliant! You are totally correct, and that also makes what you say scary. We already are paying for water, and the Japanese already are purchasing Oxygen. Does this mean, then that the poorest and weakest among us will some day no longer be able to afford to live? You bet it does!

    • Buildreps profile image
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      Buildreps 2 years ago from Europe

      Thanks for your happy and uplifting comment, ChitrangadaSharan! Thanks for sharing.

    • ChitrangadaSharan profile image

      Chitrangada Sharan 2 years ago from New Delhi, India

      Wonderful hub and so true!

      How beautifully you have made comparisons to emphasize the expensive and the inexpensive things in life.

      Enjoyed the read, voted up and shared on HubPages!

    • Buildreps profile image
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      Buildreps 2 years ago from Europe

      Thanks for your kind comment, Babbyii!

    • Babbyii profile image

      Barb Johnson 2 years ago from Alaska's Kenai Peninsula

      Should be required reading for all citizens of planet earth. Great hub. Hope it makes the rounds to those to need to read it.

    • Buildreps profile image
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      Buildreps 2 years ago from Europe

      Thanks for dropping by, Akriti Mattu!

    • Buildreps profile image
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      Buildreps 2 years ago from Europe

      Thanks billybuc, for your priceless comment!

    • Akriti Mattu profile image

      Akriti Mattu 2 years ago from Shimla, India

      Interesting read.

    • billybuc profile image

      Bill Holland 2 years ago from Olympia, WA

      As always, a fascinating read. I read the title and knew I would totally enjoy this one.