The Diamond-Water Paradox

By Stacey Vanek Smith

Cardiff Garcia

Published July 25, 2018 at 7:03 PM EDT

Adam Smith, the father of economics, had a problem. He believed in the wisdom of markets--that the free market would always settle on the best price for something. That price would be an expression of how valuable that item was. The problem: diamonds are more expensive than water and water is more valuable to us than diamonds.

We talked to about the paradox and Smith.

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Stacey Vanek Smith

Stacey Vanek Smith is the co-host of NPR's The Indicator from Planet Money .She's also a correspondent for Planet Money, where she covers business and economics. In this role, Smith has followed economic stories down the muddy back roads of Oklahoma to buy 100 barrels of oil; she's traveled to Pune, India, to track down the man who pitched the country's dramatic currency devaluation to the prime minister; and she's spoken with a North Korean woman who made a small fortune smuggling artificial sweetener in from China.

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