He learned the lesson in the town where the sea kept its own small economy.
On clear mornings the fishermen dragged lines through glassy water and sold silver fish; on windy afternoons teenagers walked the headland and gathered smooth stones—pebbles—that tourists bought for a lark. One spring, an old jeweler named Mara arrived with a battered field guide and a loupe. She set up a table in the square, placed a handful of pebbles beside a single, small diamond, and waited for the market to tell its story.
“A diamond is expensive because it is scarce compared to pebbles,” she said when a curious crowd formed. “If there were fewer pebbles and more diamonds, the pebbles would be worth more.” It sounded obvious. But Mara wanted them to see how obvious things hide behind institutions, technologies, and stories.
She explained first how nature’s scarcity is only one part of the price. A diamond’s value starts with geology—the billions of years, the heat and pressure that make carbon lock into a sparkling lattice—but then moves into human accounting. Cut, clarity, color and carat—“the Four Cs”—are technical measures that jewelers use to grade stones, and tiny differences can double or halve a price. People heard the Four Cs as if they were immutable laws; Mara tapped the loupe against the table and smiled. Behind those letters sat gradings, labs, and markets that decide which stones are rare in practice, not just in principle.
Then she showed them a chart, drawn in a shaky hand: two columns. One column was “supply”—mines, shipments, and stockpiles. The other was “demand”—rituals, marketing, and meanings. She pointed to the supply column and told the town about a handful of places in the world where most of the world’s diamonds still come from, and how those mines are not just holes in the ground but geopolitical levers: expansions, new underground operations, and strategic stockpiles that can be adjusted to cool or heat a market. In recent years major producers had expanded some operations while hoarding more rough diamonds in inventory—moves that prophets of markets watch closely because when producers hold back, scarcity is manufactured. Mara cited how large firms have sometimes amassed record stockpiles and trimmed output to steady prices.
“Scarcity,” she told them, “is as much a policy as a geology.” Her voice grew softer. “If a mine owner can increase output, the market can change fast—unless the industry decides to keep a lid on it.”
But scarcity isn’t only controlled by the old giants. Mara folded the chart and pulled out another prop: a small, pale disc of silicon on which were grown diamonds in a laboratory. “In the last decade,” she said, “we learned how to make diamonds in factories.” The crowd murmured. Lab-grown stones started as a curiosity but then turned into an industrial-scale product: techniques like chemical vapor deposition (CVD) and high-pressure high-temperature (HPHT) reactors have improved and multiplied, and prices for one-carat lab-grown stones have tumbled compared to natural equivalents. That sudden flood of cheaper, visually identical stones forced the market to confront a new reality where scarcity of material could be undermined by technology.
“That’s the pebble problem,” a fisherman offered. “If someone learns to make pebbles, who pays for the pebble anymore?”
Mara laughed. “Exactly. But people don’t just buy stones for sparkle. They buy stories.”
She told them the most important lesson: value is a two-part contract between matter and meaning. The story that transformed diamonds into symbols of everlasting love was not written by nature but by marketers—campaigns that linked a stone to romance, status, memory. Those narratives could raise willingness to pay far above the cost of extraction. In other words, a diamond’s price is partly geology, partly economics, and partly a cultural pact. The origin of that pact—most famously the mid-20th-century campaign that framed the diamond as the visible promise—remains one of the best examples of how marketing changes scarcity into social signaling.
From the square Mara led a short lecture on institutions that try to keep the trade ethical. She explained how governments and industry bodies certify shipments to block “conflict diamonds” from the market, creating an extra layer of trust—or friction—around natural stones. Certification systems matter because when buyers believe a stone is cleanly sourced, they may be willing to pay a premium. The process is imperfect and political, but it is another example of how human systems add scarcity and value on top of geological facts.
A young economics student in the crowd wanted numbers. Mara obliged: she sketched supply-and-demand curves and introduced the idea of a Veblen good—an item whose desirability increases with its price because the price itself signals status. Diamonds, she said, often behave as Veblen goods. For many buyers the high price is part of the purchase; it broadcasts commitment or rank. But when a substitute—like a lab-grown stone—becomes cheap and convincing, the signaling fractures. The student nodded: signaling depends on common beliefs. If enough people accept lab-grown stones as equivalent, then price no longer equates to status in the same way.
By dusk the square smelled of frying fish and seaweed, and a small child had pocketed the lone mineral guide. The crowd had each decided, in their own way, whether a stone’s shine was worth the market’s price. Some left with pebbles, some with stories, and a few with the realization that value is an ongoing argument between scarcity, technology, and culture.
Mara packed her loupe. “Remember,” she said as she walked away, “if diamonds were as common as pebbles, pebbles would be where the meaning happens. Markets don’t just measure scarcity—they manufacture it when it suits them, and they dissolve it when new technologies appear. The only thing that’s truly rare is agreement.”
The town went home with new eyes. That night a wave of teenagers started painting tiny symbols on pebbles—hearts, stars, a little algorithmic sparkle—and placed them on benches with notes: take one, leave a story. The pebbles, newly scarce in their meaning, disappeared by morning. The next day a visitor sold a pebble for a price people once paid for trinkets: not because the stone had changed, but because the story had.
Outside the town and below the mines and labs, markets continued to shift—inventory counts and production decisions, lab-grown output, certification debates, and marketing campaigns all moving the lines on Mara’s chart. Scarcity remained a mix of caves and contracts, of pressure deep inside the Earth and pressure from human hands shaping desire. And in that mixture the simplest truth endured: value lives where matter meets meaning.
All names of people and organizations appearing in this story are pseudonyms
What did Trump, Xi agree to on tariffs, export controls and fentanyl
Comments