Diamonds are expensive because that's how much money people pay for them. People buy diamonds because [they have no taste and] they can afford to, or want to present themselves as being able to afford to. I'm sure some of them have various dark thoughts about it, too.

People derive their value from their economic status because that is a tool available to them and the world they grew up in forced them to do so. Being able to derive your value from other aspects of life is a luxury and a privelege that is, ironically, unaffordable for the majority.