Allison Schrager: I love markets. I also love diamonds.
This helps explain why I am experiencing a kind of existential crisis.
The popularity of lab-grown diamonds is making me question the beauty of markets, which is their ability to place a value on pretty much anything.
And it is not just diamonds. Everything in the economy whose value is predicated on scarcity is suddenly abundant: luxury handbags, music, even currency itself. Why is anything worth anything anymore?
Diamonds hold a special place in my heart, not just as fan of jewelry but also as an economist. When young economists first start to ponder the concept of value and why things cost what they do, we inevitably turn to the OG, Adam Smith.
(OG, short for “original gangster” or “original gangsta,” is a slang term for someone who’s incredibly exceptional, authentic, or “old-school.” OG was originally used in gang culture, but it is now used as a general term to praise someone who is an expert at something.)
Meanwhile, the price of natural diamonds — which always promised to hold their value — is down as much as 40%.
After all, pretty much everything in America (except for housing) is available and on demand in any quantity.
Almost all music ever made is available on demand on your phone, for the monthly price of what a single album once cost.
There is an abundance of fake Birkin bags, for example, which can now be bought at Walmart
The Walmart ‘Birkin’ Bag, Explained
https://www.glamour.com/story/the-walmart-birkin-bag-explained
What Hermes has managed to do is create scarcity out of abundance. It controls the supply of Birkins, and won’t sell that many bags.
Not only does this keep demand high, but it diverts demand to other Hermes goods.
Allison Schrager Bloomberg 11 August 2025
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