State Violence, The Diamond/Water Paradox, and an Invisible Axiom of Classical Economics

The diamond/water paradox is a name given to the fact that water has infinitely high use value but only minimal exchange value whereas roughly the opposite is true for diamonds. Apparently economists have been trying to untangle this putative problem for centuries, but my thesis is that it’s actually no problem at all. It seems paradoxical only because these economists have completely ignored the role of state violence in creating value and maintaining capitalism. Without state violence there would be no capitalist economy for them to study and prices of things would be very different than they are now.1

People need water, food, and shelter to survive. For a million years of human history people found countless successful ways to meet these needs directly, for themselves, their families, their communities, without being violently forced by zillionaires to cede a share of the value they created. Fundamentally, capitalism is possible only because if you charge money for those needs and kill anyone who tries to meet them without paying you can force masses of people to labor for your benefit.2
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