Alcohol is often praised as a recession-proof industry. In times of economic woes, we spend what little money we have to drown our sorrows. In times of great fortune, we celebrate generously with imbibed cheer. Libation, in all its forms, has permeated civilizations for millennia, interlaced in song, dance and feast … so in a very human way, the product’s consistency makes sense. There is, however, another industry displaying the same economic invulnerability, and yet offering none of the same rationale: Diamonds!
Despite what the Tiffany’s receipt might suggest, diamonds have no inherent value. They are far more abundant than we are led to believe, and they cannot be resold at even a fraction of their purchase price. For inexplicable reasons, our modern culture continues to celebrate their supposed rarity and glamour. Many men have fallen on the uphill battlefield of questioning this social norm. How did this mineral gain a monopoly on representing love? At what point did romance become synonymous with a stone dug from the earth? The history of the diamond industry is riddled with brutal corruption, brilliant ad campaigns, and the slick corporate maneuverings of one of the world’s most deplorable cartels. As more of my dear friends commit to loving marriages, I thought I’d offer an uninvited and thoroughly unappreciated look into the blood-spattered lineage behind this industry’s success.
In the mid 1800s, diamonds were an actual rarity mined solely in India and Brazil. The global supply could be measured in a few pounds and they were only donned by monarchs or aristocrats as frivolous symbols of stature. In 1870, an unimaginably vast bounty of diamonds was discovered in South Africa. Tons of the gems were being pulled out of the ground, signaling a potential flooding of the market and diminishment of the stone’s value.
Sensing the untapped opportunity before them, several mining companies joined into a conglomerate, establishing a virtual monopoly in South Africa called “the De Beers Mining company." By 1888 De Beers controlled all production and distribution of diamonds coming out of South Africa. They created international syndicates, which many other diamond claimholders and distributors soon joined (quickly realizing the profit potential of faking scarcity and fabricating high prices). By 1902, De Beers controlled over 90% of the world’s rough-diamond production and distribution. When Ernest Oppenheimer took over control of the company in 1927, he established exclusive contracts with buyers and suppliers, essentially making it impossible to deal in diamonds outside of De Beers.
The formula remained the same for much of the 20th century: An auxiliary of De Beers would buy diamonds from various sources, De Beers would then decide how many diamonds they’d like to sell (and at what price), and finally buyers would cultivate the market hubs in cities like New York, London, or Antwerp. All the while, De Beers continued to amass a stockpile measuring in the tons, hidden away in their vaults. It was during the 1930s depression, however, that the company developed its boldest and most successful tactic.
Wanting to turn America into its next big market, De Beers met with advertising agencies to form a battle strategy. Its aim? To convince consumers that “Diamonds = Love". To romanticize the stone, the campaign sought to change the public’s idea of how a man (successfully) courts a woman. They engaged the fledgling film industry, and covered movie idols (the paragons of mass audience romance) in their product. Magazines and select publications were flooded with stories that reinforced the idea of diamonds representing an indestructible devotion. Conspicuous photographs of celebrities' bejeweled fingers splashed across news pages. Fashion designers promoted the “rising trend" of diamonds on the radio. Even the British Royal Family was convinced to wear diamonds over other jewels, under the assertion that it could greatly aid an industry in which Great Britain had a controlling interest.
Don Draper couldn’t have orchestrated a better campaign.
By 1947, the operation had forged a psychological necessity across several classes and markets, forming a near overnight “tradition." Those who could not afford a ring, chose to defer the purchase rather than forgo it altogether. It became a common notion, that one’s devotion was measured by the size of the engagement ring. The now immortal De Beers tag line, “a diamond is forever," was cemented in the common psyche. Diamond sales continued to skyrocket, as De Beers exported the campaign to a number of new countries, creating multi-billion dollar profits.
Meanwhile, behind the scenes the company utilized any and all tactics to ensure control over the flow of stones in the market. If a new discovery of diamonds threatened De Beers’ autonomy (like the large Siberian mine of the 1950s), the company simply bought the entire inventory, continuing to channel the world’s supply through a restricted funnel. When countries like Israel or Zaire attempted to protest or challenge the monopoly with diamonds of their own, De Beers would flood the market with similar products from its stockpiled inventory and drive down demand. The only threat to their dominance was the potential discovery of a giant new untapped source, outside of their control. To that end, De Beers used their colonial connections to weave discoveries of diamonds in Africa into the fold of their cartel, also bringing Russia into the conglomerate and turning a blind eye to the warlords and slavers who savaged the lands, brutalized their people, and fed the company’s ever-brimming vaults.
This is the hidden history of the diamond invention. They are a fabricated fantasy, born of the greed of one tyrannical syndicate which has dictated the price for decades. Consumers have been fooled into perpetuating the idea that these abundant pieces of carbon are somehow unique symbols of esteem — tokens of wealth and romance.
De Beers propagated this illusion of scarcity to become one of the most successful cartels in the history of commerce. Almost any other commodity has fluctuated in response to economic conditions, but diamonds have steadily advanced upwards in price since the 1930s. People continue to wear them, or hoard them in safes as “family heirlooms." The most painful irony is, none of them could be sold for even a tenth of their original purchase price. The diamond market relies on consumers never parting with their rings or necklaces or earrings. That way, only the distributors can dictate value. It is a sad, cyclical delusion which costs lives, corrupts nations, and materializes our affections.