Rich and Poor How things work

https://fakenous.substack.com/p/rich-and-poor-how-things-work?utm_source=post-email-title&publication_id=863919&post_id=153460774&utm_campaign=email-post-title&isFreemail=false&r=lewoe&triedRedirect=true&utm_medium=email

• Many people commit the diamond/water fallacy, the fallacy of thinking that water should be more expensive than diamonds, because water is a necessity of life while diamonds are not. The price of anything (including labor) is determined not by the value of that type of thing as a category, but by the marginal value of the thing, i.e., the value added by an extra bit of it. Given how much water there is on Earth, the value of an extra bit of water is minimal.

Marginal Value Sets Prices Not Total Value