The more abundant something becomes, the less each unit matters to us.  This is the law of marginal utility.  It’s not an opinion or a preference but a fact of human action.  Every choice implies a ranking of wants.  Each good satisfies a desire, but only one at a time.  Once that desire is met, the next one addressed is lower on our scale of value.  That’s why the first drink of water after a long thirst is priceless, yet the tenth holds no appeal.

Value isn’t in things.  It’s in minds.  Goods have no inherent worth outside of how individuals value them.  A diamond is useless to a man dying of thirst, but precious to one who’s safe and comfortable.  The overall usefulness of water to human existence is enormous—we literally can’t survive without it.  Yet the marginal unit—the one cup among millions—is cheap.  Diamonds are rare, so the marginal unit carries high importance.  The so-called paradox vanishes once we see that value is always marginal, not total.

The law of marginal utility doesn’t measure satisfaction, it orders it.  Human wants can’t be quantified, only ranked.  Each decision reflects an internal hierarchy of importance.  Economists who speak of “utils” or measurable happiness miss the essence of human choice.  The actor doesn’t assign numbers to feelings.  He simply prefers one thing over another.

Every attempt to calculate “social utility” or design policy to maximize it is rooted in error.  Utility can’t be added, compared, or averaged across individuals.  What satisfies one may displease another.  There’s no collective mind, only individual judgments.  That’s why no planner or economist can know what’s best for all.  They may measure production, but never preference.

The same law explains why money loses value when it’s multiplied.  As the supply grows, the utility of each unit falls.  The principle that governs all goods governs currency too.  When the state floods the market with paper, each dollar satisfies a lesser want than before.  The illusion of wealth expands while real value erodes.  The margin moves, and the meaning of wealth shifts with it.

The law of marginal utility reveals something profound about human nature.  Our wants are endless, but our means are not.  The margin reminds us that value is never fixed—it lives in our choices, not in our possessions.  The more we have, the less we value each piece.  At the margin, we discover not just economics, but the psychology of desire itself.