A lot of people seem to be under the impression that diamonds have some kind of value, or that there's some sort of tradition in giving a diamond ring for engagements, weddings, anniversaries, etc.
I'd like to point out to everyone that diamonds have an artificial value, and there is no sort of tradition involved with diamond rings. It is all the result of a ruthless company called De Beers.
De Beers was set up in South Africa in 1934 by Sir Ernest Oppenheimer, a local mining tycoon. Decades later, it truly is a diamond cartel, still run by an Oppenheimer, controlling some 80% of the global diamond market. Because of American antitrust laws, De Beers cannot legally conduct business in the U.S., so the world's wholesale diamond buyers travel to other countries to buy from De Beers instead.
It is no secret that De Beers is hoarding an enormous stockpile of diamonds simply to keep demand and prices up, but they have also been known to briefly flood the market with certain kinds of diamonds as a last resort to cripple competing sellers. Eventually, the seller surrenders and sells their stones to De Beers instead of competing against them.
Aside from shameless marketing, De Beers has also come under fire for purchasing uncut diamonds from violent outlaw armies that torture, amputate, and murder innocent civilians, including children. While De Beers pays lip service to the importance of shunning these conflict diamonds, it is believed that De Beers already had a significant number of conflict diamonds in their coffers before they pledged to stop buying more. It is also easy enough for the outlaws to smuggle conflict diamonds onto the market that all but the most serious efforts wouldn't help much anyway.
De Beers uses its incredible wealth and power to influence African governments to keep the diamonds flowing, and is not above flat-out bribery to get their way. One such example was the cozy arrangement between De Beers and Mobutu Sese Seko, the dictator of Zaire, who received as much as US$1M per month from De Beers for his cooperation, in addition to whatever profits he made selling diamonds from his own personal mines.
Customers of De Beers have grown accustomed to literally begging for permission to buy choice diamonds, since the cartel dictates an all-or-nothing agreement which usually requires the buyer to accept a large number of inferior stones in each parcel. This buying policy strongly favors the larger jewelry retailers, who have an established market for selling the inferior diamonds. Boutique jewelers who want fewer but better stones are forced to pay a premium for being choosy, which automatically places them at a disadvantage against larger retailers.
Through its monopolistic practices and its blind eye to the brutality that fills its vaults, De Beers has become a lightning rod for criticism about the diamond industry. Only time will tell if the public can stay focused on the pertinent issues or surrender to De Beers's intense media campaign.
De Beers also single handedly invented the idea that diamonds should be given for an engagement. Prior to the 20th century, diamonds were not especially coveted or considered valuable because of their relative abundance, and were mostly used for industrial purposes. De Beers set about to create a market other than industrial uses for diamonds so they came up with the whole engagement idea.
In the 20s and 30s they paid movie studios to add scenes featuring the now familiar man on his knees presenting a diamond, which previously had nothing to do with courtship. They chose that method because it was thought that if the man were expected to 'surprise' the woman with a diamond, it would be preferable to the already engaged couple going to pick out a gem together, in which case they might level-headedly decide that the money was better spent on something else.
What a business model! Monopolize the distribution of a marginally valuable product, create a market for it from scratch, and raise armies to act with extreme vengeance against anyone who may challenge the cartel.
Don't buy a diamond. Ever.
I'd like to point out to everyone that diamonds have an artificial value, and there is no sort of tradition involved with diamond rings. It is all the result of a ruthless company called De Beers.
De Beers was set up in South Africa in 1934 by Sir Ernest Oppenheimer, a local mining tycoon. Decades later, it truly is a diamond cartel, still run by an Oppenheimer, controlling some 80% of the global diamond market. Because of American antitrust laws, De Beers cannot legally conduct business in the U.S., so the world's wholesale diamond buyers travel to other countries to buy from De Beers instead.
It is no secret that De Beers is hoarding an enormous stockpile of diamonds simply to keep demand and prices up, but they have also been known to briefly flood the market with certain kinds of diamonds as a last resort to cripple competing sellers. Eventually, the seller surrenders and sells their stones to De Beers instead of competing against them.
Aside from shameless marketing, De Beers has also come under fire for purchasing uncut diamonds from violent outlaw armies that torture, amputate, and murder innocent civilians, including children. While De Beers pays lip service to the importance of shunning these conflict diamonds, it is believed that De Beers already had a significant number of conflict diamonds in their coffers before they pledged to stop buying more. It is also easy enough for the outlaws to smuggle conflict diamonds onto the market that all but the most serious efforts wouldn't help much anyway.
De Beers uses its incredible wealth and power to influence African governments to keep the diamonds flowing, and is not above flat-out bribery to get their way. One such example was the cozy arrangement between De Beers and Mobutu Sese Seko, the dictator of Zaire, who received as much as US$1M per month from De Beers for his cooperation, in addition to whatever profits he made selling diamonds from his own personal mines.
Customers of De Beers have grown accustomed to literally begging for permission to buy choice diamonds, since the cartel dictates an all-or-nothing agreement which usually requires the buyer to accept a large number of inferior stones in each parcel. This buying policy strongly favors the larger jewelry retailers, who have an established market for selling the inferior diamonds. Boutique jewelers who want fewer but better stones are forced to pay a premium for being choosy, which automatically places them at a disadvantage against larger retailers.
Through its monopolistic practices and its blind eye to the brutality that fills its vaults, De Beers has become a lightning rod for criticism about the diamond industry. Only time will tell if the public can stay focused on the pertinent issues or surrender to De Beers's intense media campaign.
De Beers also single handedly invented the idea that diamonds should be given for an engagement. Prior to the 20th century, diamonds were not especially coveted or considered valuable because of their relative abundance, and were mostly used for industrial purposes. De Beers set about to create a market other than industrial uses for diamonds so they came up with the whole engagement idea.
In the 20s and 30s they paid movie studios to add scenes featuring the now familiar man on his knees presenting a diamond, which previously had nothing to do with courtship. They chose that method because it was thought that if the man were expected to 'surprise' the woman with a diamond, it would be preferable to the already engaged couple going to pick out a gem together, in which case they might level-headedly decide that the money was better spent on something else.
What a business model! Monopolize the distribution of a marginally valuable product, create a market for it from scratch, and raise armies to act with extreme vengeance against anyone who may challenge the cartel.
Don't buy a diamond. Ever.
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