Use-value and exchange-value

AAdam Smith believed that use-value of a thing can be much higher or much lower than the exchange-value. Use-value of water is much greater than of a diamond but the exchange-value of water is much less than that of the diamond. The distinction between use-value and exchange-value serves a heuristic purpose in economics. Use-value is assumed to be tied to the physical properties of a commodity and exchange-value to exchange of goods in the capitalist market through the equivalence of money. In reality, usefulness is never objectively defined. It is socially contingent. The usefulness of a thing depends heavily on ever-shifting human needs and desires. The exchange value depends on the market.