I agree that there may not be too much that can be done to address this problem. If it’s human nature to covet things, maybe we are stuck with devoting resources to ultimately futile pursuits.

The bigger question is how much we really benefit from economic growth. If a bigger economy means we build bigger machines to search ever farther for shinier diamonds that are ultimately of no more value than the smaller ones, maybe we don’t need economic growth. Maybe it would be better to cap economic production to limit the damage to the environment.

People would still pursue silly things. That’s okay. They just wouldn’t be able to make quite as much of a mess in the process.

Also, I’m not sure what we can do about this one. We could either try to legislate against diamonds or try to somehow change human nature to not like diamonds. If either was successful, I don’t think we’d be much farther ahead as people would just find something else to covet.

Eric

Other examples of positional goods:
Expensive wine – most people can’t tell the difference.
Luxury cars – are they really much better or different?
Designer clothes – Why does the label matter?
Housing in some desirable neighborhoods.
Starbucks coffee
Penthouse apartments
Purebred dogs

There are more. These are what come to mind off the top of my head.

I may not have made my point as clearly as I wanted to. The point isn’t that diamonds are un-functional. My point is that they are valuable BECAUSE they are expensive.

If you like going to Disneyland because it is fun, I’m okay with that. We can build more Disneylands and more people can have fun. If you enjoy going to Disneyland because it is expensive and a sign of status to go to Disneyland, I have a problem. Building more Disneylands won’t help. Going won’t be fun if everyone goes. Worse, perhaps building the first one wasn’t necessary if it is only a status symbol.

When people use the goods and services they buy to gain status, it’s a zero some gain. One person’s gain is another person’s loss. It’s pointless for us all to strive to consume more than our neighbors.

I agree that diamond rings are not especially functional. Diamonds ARE used for industrial applications, but I assume that’s not what you mean. I’d say the appeal of diamond rings is their novelty and their aesthetic appeal, plus the status of being expensive. Some people feel happy to wear a diamond ring but may not get the same happiness with a cubic zarconia.

What about other un-practical things that people like? Should we get rid of artists and musicians? Video games and television shows? How about fashion designers. A lot of people spend a lot of time on fashion design, but one pair of pants is normally just as functional as the next. Ditto architects and furniture designers. And we can scrap Disneyland, too – it makes people happy, I guess, but they should spend their money elsewhere.

I could probably make a longer or better list, but I think this gets my point across. At what point do we restrict people from doing and buying things that they like? Can we mandate people to buy more practical versions of the items they use?

Eric