Jul 26

Diamonds or Water

Diamonds or Water

by Stacy Keyes

When your special man goes down on one knee to propose to you, what should he have in his hand, a diamond ring or glass of water? If he truly cares for you, he should have a glass of water. Some might doubt the sincerity of my choice, but I stand by it. Women do not need a diamond ring to survive. Many of my friends have been living for years without one, but try living without water.

So how many women are willing to pass on the diamond and pick up the water? I am willing to guess that most women would choose the diamond ring over the water. Why would women make this decision, choosing a diamond over water? Do they have a death wish? No, most women do not have an unconscious desire to die from dehydration. What most women have is an intuitive understanding of marginal utility. In the aggregate, water trumps diamonds, like rock beats scissors; not even close. The total utility of water, the usefulness of all water on the planet, is more valuable than all of the diamonds on the planet. Water can be used for drinking, bathing, cleaning, and a host of other very useful activities. In comparison, diamonds are not necessary to live. A person could live their whole entire life without ever utilizing a diamond.

We all know that we need water, but humans do not make decisions on the basis of total utility, because we do not need the total supply of water. After we have our thirsts quenched, additional water is no longer necessary; this is why the first sip of water on a hot summer’s day is worth so much more than the 80th sip. When humans are making a decision of what they want, their choice is guided by marginal utility. How much will an additional diamond make you happy compared to an additional glass of water? Most would agree that an additional diamond would make them significantly happier than an additional glass of water. This occurs because water is plentiful, diamonds are comparatively rarer. You can receive as much water as you want for free at a public water fountain; there are no public diamond fountains.

The gift of a diamond ring when your suitor proposes signifies that he values your relationship, because diamonds are very rare and, for this reason, very expensive. A glass of water, on the other hand, suggests that your beau is an idiot or really does not care that much for you; either way, a young lady should usually reconsider her relationship with those who come bearing water.

Marginal utility also explains why school teachers receive less money than professional athletes. The total utility of grade school teachers is significantly more useful than basketball players. If you want to get ahead in life, you need to know how to add and subtract. In comparison, you do not need to watch a person who can shoot three pointers or even know what a three pointer is to be successful in life. Without doubt, teachers are far more beneficial than basketball players, but, despite this fact, they are paid far less. Why does this occur? You can thank marginal utility. There are tens of thousands of grade school teachers that can teach a child addition and subtraction. In comparison, there are very few individuals that can compete in basketball at the professional level.

Diamonds and basketball players are not very useful, but they are rare. As long as there are different supplies of materials and skill level, there will be differences in what people are willing to pay in order to gain access to what they desire.

Now for those who still believe that grade school teachers should be paid more, I have good news. There is a simple solution to decrease the income inequality between the two professions. First, you can spend millions of dollars on programs to increase the basketball skills of tens of thousands of today’s youth, so they all become as good at basketball as Michael Jordan. By increasing the supply of professional basketball players their salaries will drop. The alternative would be to significantly decrease the number of grade school teachers in the United States by deporting them to foreign countries. If the supply of individuals that could teach grade school were reduced from tens of thousands to two hundred, the competition for the remaining teachers would significantly increase, which would result in increased salaries. Until we spend millions of more dollars on basketball training or deport tens of thousands of grade school teachers, the discrepancy in pay will continue.   


1 comment

  1. Ashlee

    Very nice blog post. I certainly love this site. Thanks!

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