Water and Diamond Paradox

"Water and Diamond Paradox" - Adam Smith 1723-1790
This simple economic situation come to strike me recently.

Solve this problem then you will know why we are where we are?!

This simple economic question is "Water and Diamond Paradox"; Why diamond is more expensive than water, while without water we can not live, but without a diamond we will not die?

Some economists suggest that its because there are two type of 'VALUE', one is known as 'value in use' while the other one known as 'value in exchange'. In this case water is obviuosly high in its 'value in use' than its 'value in exchange'. Unfortunately, this reasoning is less convincing.

Forgeting the above reasoning, we may argue that it is because of differents "Subjective Valuation of individual' that lead to this
conclusion that diamond is more valuable than water.

So far, the given reasons seem merely pointing to worthless fact, just like saying the sun rises from the east.

I'll rather suggest that there is no such thing as subjective valuation, but rather it's the basic principle of demand and supply. In this case the 'Demand' is definately subjective! Since the "demand'is subjective, we therefore can never 'Fix A Price' for a certain commodity, the action of control a fix price on a certain goods will bound to create more problems.

Mind you, this is known in 18 century!!!!!!!!!