'Why is water more valuable than diamonds today?'

In the "classical economics" tradition, a good becomes a material asset through its use value and exchange value. Goods without use value can also have exchange value. Example: Paper money, stocks. In general, use value is a prerequisite for exchange value. Because a good that provides no benefit when used cannot gain value when exchanged.

The problem is how much the market conditions that determine exchange value are reflected in prices. Essentially, how related are wages—the value of labor—to the exchange value of goods? (Marxist economics.) To understand this, it is necessary to relate wages to the exchange value of basic goods that provide for the needs of labor. This is where the inflation-wage relationship first comes into play. Secondly, the question of whether exchange value reflects real value...

How values are reflected in prices; this is an important point and a subject of theoretical debate in economics...

Marx developed the classical labor theory of value and introduced the concept of "socially necessary labor time." For him:

Value is the basis of production.

Price is the form of appearance of value in the market.

According to Marx:

• The value of goods is the average labor time required to produce them.

• Prices are not always (in the "Capitalocene" era, most of the time) equal to value.

• Prices can deviate from value due to competition, monopolies, the credit system, and supply-demand.

For this reason, Marx also distinguishes between production price and market price. He connects this distinction to the concept of socially necessary labor time and investigates the conditions for society to reproduce itself (Marx's law of value)..

Before the Anthropocene era began, that is, before human-induced climate destruction (or climate crisis) emerged, clean water and air were used as examples of free goods. However, when the Anthropocene trend combined with the Capitalocene, these examples became stunted. Competition, monopolies, and the credit flow of the current financial system not only increased inequality but also disrupted the ecosystem, thus the power of values to be represented by prices weakened, and this relationship is gradually disappearing...

Production price now has a weaker relationship with market price...

Today, accessing clean water and clean air has become difficult, and the cost is steadily increasing. This development, which we can also view as the cost of living, revises the water-diamond paradox in economics. Although diamonds (or gold) gain much more material value in the market, it is becoming increasingly difficult to access clean water—which was once a free good—with diamond income. Clean water, whose use value is vital, is also entering a phase where its exchange value is rising. Wars are breaking out over water, and the cost of living is rising due to food prices caused by drought in agriculture (inflation)... Yet, when you use a diamond, a security threat emerges as a new cost.

In summary, all these costs describe the impossibility of reproducing the socially necessary labor time value. The increase in drought in Bangladesh, Pakistan, Afghanistan, Nepal, and India (South Asia) and the rise in rural-to-urban migration there is significant evidence that the difficulty of producing socially necessary labor value has begun.

WHAT THE NATO MEETING REFLECTS

On the other hand, doesn't the NATO meeting to be held in our country at the beginning of July reflect the bottleneck in exchange value? If capitalism had reached prices that could reflect use values and exchange values, would there have been a need to increase defense spending? No.

If the productivity relationship in China and the Asian region in general had not created an exchange (foreign trade) that would drive production through a partnership with Russia, we could have said "yes" to this question. Competition and monopolistic structures are driving US finance to increase defense spending. This weakens the process of exchange value reflecting socially necessary labor time.

Furthermore, Russia is also experiencing poverty amidst wealth. Likely due to the impact of its attack on Ukraine, it has to import gasoline despite its rich oil resources. Isn't it a stark contradiction that China will use energy through coal production until 2060 with permission from the world system and in accordance with the Paris Agreement? Especially when combined with the fact that the People's Republic of China is the country that produces the most renewable energy, this phenomenon becomes even more interesting.

In summary, when "Capitalocene" conditions that strain socially necessary labor time combine with the "Anthropocene" era, everything is in chaos..

When the "Capitalocene era," which includes capital in the equation, dominates all relationships, neoclassical economics proceeded from the idea that the utility (marginal utility) of the individual shopping in the market with prices reflecting values would bring everything into balance. The error here is not only theoretical (the refuted Austrian Neoclassicism) but also the problem of failing to foresee inflation. Because the problem is not so much the individual's preference, but the sacrifice of social resources to exchange value... The market Capitalocene (the unhinged capital producing only for profit) that creates production costs leading to inflation by wasting socially necessary labor time...

The law of value consists of neither marginal utility nor exchange value in the market. A law of value coming from societies consisting of individuals for whom healthy living is "as precious as water" is essential. Here, use values will always remain the primary criterion. If the means to make human life infinite had been developed, this debate would have no meaning, of course. If we consist of rational human societies, we must care about the labor time value necessary for it to reproduce itself. This is also the contribution of Marx's theory of value to humanity...

IF WATER IS THE SOURCE OF EVERYTHING...

The Anthropocene ecological network is interesting in that it shows that the exploitation of humans by humans and other living things cannot be the sole model of ecological destruction. As the resources spent on security increase, we see that the law of scarcity of the market economy is refuted. If you create conditions where water becomes increasingly scarce compared to diamonds, you also question the "value" of diamonds. Moreover, you don't just have to be in a desert; the Earth is already desertifying..

The heatwaves sweeping Europe these days; it's not something that can be solved with small fans on the vests worn by road workers (the France example)... Soon you will have to employ robots instead of road workers, but robots will be produced with more water; that is certain..

Water is the source of everything, that's why. Because of the perception created over water resources, we tend to see the problems in the Middle East as an oil problem. In the Anthropocene Capitalocene era, the issue is deep. As we consume everything, we are moving toward a state where we cannot consume anything as humanity..

Water is needed to mine diamonds, to produce any good, and to live.. The market has understood this, which is why water prices are rising at missile speed, but of course, it cannot compete with diamonds yet, but it is imminent.. Because the point reached is that even if you gave all the diamonds in the world, you couldn't find the scarce water resources.. Socially necessary labor value will also shrink then, because there will be no life left..

The reason for the differentiation with exchange value lies in the neoliberal policies determined according to autistic Neoclassical economics... The solution lies in policies that prioritize society over the market and can adapt socially necessary labor time to the ecosystem and labor..

Thorstein Veblen, who adopted the "institutionalist approach" formed by the influence of radical political economy (Marxist), and John R. Commons argue that prices are not determined solely as a result of supply and demand... (We cannot include new institutional economics in this group.)

Factors affecting prices:

• law,

• market power of companies (monopolies),

• government regulations,

• social institutions,

• bargaining power of wages (M. Kalecki).

Therefore, value and price cannot be thought of independently of the institutional structure. If exchange value cannot be realized in the form of price, it is also necessary to look at the level of regulations produced by the state (law), companies, and social institutions of institutional economics. When the institutional structure disrupts the ecosystem, the "diamond-water paradox" can evolve in another direction. The solution is to determine it again through the social organization and institutional power of labor, but this is only possible through scientific analysis. If AI is used well in the meantime and the law permits, scientific analyses could reach a level that increases the power of social sciences. Then, scientists who have solved the water-diamond paradox could be a remedy for humanity's troubles..

Is the issue inflation, or societies that cannot combine the necessary amount of labor with value?

You decide..