Why do we place such high value to things such as gold and diamonds? Wouldn’t it make sense to put that value on things that are more “useful”?
In: Economics
Useful in what way? Those things are valuable as a form of currency.
You can look into the historical reasons we value these things but more simply, humans aren’t drive entirely by logic and what’s absolutely the most prudent for survival. We have evolved and developed a society that allows many to live superfluously and values certain material items that don’t serve any practical purpose. We’re social creatures that have evolved to value prestige.
It’s also worth mentioning that these things have a value backed by society. In fact, gold was what once gave the US dollar value. These things retain value well over long periods of time so it’s a reasonably good way to store wealth.
That being said, there are tons of important uses for gold, diamond, sapphire, silver, etc. in science and medicine. But generally, the quantities needed here are relatively small compared what’s produced so they don’t have a big impact on the market.
Gold and diamonds derive their value due to their rarity and therefore their value as trade items. Eventually, their value was described in denominations of paper money and coins which were more easy to transport and transfer in exchange for other goods or services. So, in reality, the rarer something is, the more value is placed upon it. Or something like that, lol.
A big part of the reason we put a high value on diamonds is because the DeBeers company a) advertises that diamonds are important and b) hoards piles of them to keep the supply low and the price high.
This was one big reason why DeBeers opposed lab created diamonds so strongly – to the point of threatening researchers. If any appropriately stocked lab could crank out diamonds more perfect than the DeBeers diamonds, then DeBeers’ vault of diamonds would be worthless.
Gold is rare and unique. Gold is very useful to convey value. It is not abundant, it takes labor to extract it, it has intrinsic properties that make it hard or impossible to fake or destroy, and of course it looks good. What else could past societies use to track their wealth? You said something useful, so what would it be? Were they supposed to rely on sacks of grain? It’s impractical.
In the modern world we no longer need to rely on gold to convey value, and we don’t. But it still retains its rarity, it’s properties, and it’s appeal.
Gold is expensive *now* not only because it is relatively rare but also because it is quite useful, especially in electronics. In the past it was valuable because it is extremely non-reactive and relatively easy to work with. If I give you an apple in payment, it is eaten, or it rots. If I pay you in gold today, your grandkids could inherit it decades in the future. This is especially awesome in a world where trade between countries could take weeks, months, or possibly even years.
On the other hand, [Diamonds are not particularly rare. In fact, compared to other gemstones, they’re the most common precious stone found.](https://www.truefacet.com/guide/makes-diamonds-valuable/). Diamonds are expensive [because of marketing and the power of monopolistic corporate practices](https://www.businessinsider.com/heres-why-diamonds-are-so-expensive-2015-9).
Useful things break or wear out, value decreases rapidly. Gold diamonds glass beads etc last longer
Gold and diamonds are shiny and pretty. And rare-ish. That’s enough to make them much sought after, and high priced.
Minerals do not inherently contain more value than any other objects. In economics it’s more a combination of capital or in other words resources and How well you use them. If you want to take something apart both a screwdriver and a hammer can serve the same purpose but if time is limited then the hammer is the better resource but if maintaining the parts is a high priority then the screwdriver has more value.
I’m no expert but I’m gonna guess it’s for the same reason Money is valuable. Like what good is a piece of green paper other than holding value. It’s not like we really barter in everyday items anymore.
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