The Diamond Conspiracy: Are They Really Rare?
Diamonds are a girl’s best friend. You’ve heard that phrase, right?
At one point in their life, every girl desired a diamond. Or they may even continue to do so.
If I talk about myself, I hail from a South Asian community. Our history shows that diamonds belonged to the maharajas long before the colonists took them to the West. So, for commoners like us, gold became more prevalent in our traditions. But no matter how hard my subcontinent tried to replace diamonds with gold, diamonds have always been the stuff of every girl’s dreams.
For the West, they are an engagement ring staple. One cannot even dream of being engaged without imagining a diamond ring. They have always been elite. The king of all gems. The rarest of all.
A girl’s best friend.
But did you know it’s all part of an elaborate advertisement scheme? ‘Diamonds are a girl’s best friend’ has been ingrained in you ever since Marilyn Monroe performed the song, Diamonds are a Girl’s Best Friend, in the 1953 film, Gentlemen Prefer Blondes.
Marilyn’s performance was no coincidence. The performance was carefully curated to spark public interest in diamonds. In fact, the entire old Hollywood underwent an age of glamourizing diamonds on its actresses and in movies to create a global trend.
But who was behind it all?
Well, here enters DeBeers corporation.
Diamonds owe all their popularity, hype and rarity to DeBeers.
When the abundant diamond reserves were first discovered in South Africa, India’s reserves (the only source of diamonds at the time) was almost depleted. The world was in dire need to find new diamond reserves to appease the rich. Thus, the discovery saw a huge rush of mining which resulted in a sharp decline in the gem’s value. Previously, only the royal and elite classes could afford diamonds. But the onslaught on the reserves meant even common miners could have them. So, Cecil John Rhodes, an English immigrant came to save the day.
Rhodes began incorporating mining leases to form DeBeers corporation which soon controlled almost all of the diamond mining in the area. The value stabilized but not for long. A contradicting problem surfaced.
Diamonds were demanded only by the rich. Not many could afford them. The result was abundant diamonds but a weak demand. So began the advertising.
The movie industry was carefully motivated to glamourize diamonds and charm the public. On the other hand, the diamond engagement ring concept was launched. Previously all sorts of stones such as Ruby, Sapphire, and Emeralds were used in rings but DeBeers with the assistance of N.W. Ayer, a leading advertising agency launched the slogan “A diamond is forever”. Thus, began the age of diamond engagement rings.
But this was not all DeBeers did.
DeBeers created a monopoly. While widely promoting diamonds, the corporation withheld its supplies to increase the demand in the market. It kept on accumulating diamond reserves till it was in control of 75–85% of world diamond supplies while selling few to increase the value of diamonds. It made them seem more expensive than they really were. It promulgated the view that diamonds are rare. After all, the only reserves in the world were under one corporation, DeBeers.
But the rarity of diamonds did not last long.
Soon the world advanced, and the race of fossil fuels began. As the technology studying Earth geology improved, so came another discovery. Diamonds weren’t that rare. In fact, they were one of the most common of all gemstones in nature. More reserves of diamonds were found in the Soviet Union and Australia.
These new reserves threatened DeBeer's monopoly. Initially, it made pacts with the Soviet Union and Australia to distribute their diamonds but that didn’t last long either. The Soviet Union became Russia and let the contract expire. Australia also ended its contract with them. Its monopoly was also being called out in the US, where it was no longer allowed to sell. In 2004, De Beers agreed to plead guilty to criminal price-fixing before a U.S. federal court. This allowed them to once again sell diamonds in the U.S.
Thus, DeBeer's control of the diamond market reduced from 80% to 30%. Its monopolistic ways and clever marketing had already worked though. The whole world still believes diamonds are rare.
That entire article above was supposed to be me, unearthing the Diamond conspiracy and how DeBeers turned the most common gemstone on Earth, rare. But the counterargument is yet to come.
After many people highlighted the diamond conspiracy, there were many others who shut the conspiracy down. These people claim that if DeBeers had made the diamonds seem more rare and expensive than they really were, why did the prices not come down after DeBeers lost its control?
This counterargument states that DeBeers corporation was in control of the raw diamonds, nothing about which is special. While at one point they did maintain a monopoly, the prices didn’t come down because the cost of mining a raw diamond and then polishing it, hand-cutting it to make it the precious stone used in rings is expensive itself.
Furthermore, the prices were not artificially set by DeBeers. The demand and supply of diamonds have remained the same. People don’t require diamonds but they do desire them. That desire creates value. Additionally, if DeBeers were to set a higher price than their real worth, the other distributors would immediately offer a competitive price. So, the diamonds are as expensive as they appear to be.
The only thing DeBeers is guilty of is creating the highly successful trend of diamond engagement rings that sell diamonds and ensures its demand.
But wait, the conspiracy is not completely shut down. Here’s another counter-counterargument.
Now, who’s to say the other corporations involved in the diamond supply have not teamed up themselves? Who’s to say that they took the initial DeBeers monopoly idea and ran with it together? After all, if diamonds were to lose value, they would be affected too.
The counter-counterargument states that after the knowledge that the diamond may not be as rare as it appears became slightly public, all the parties in the diamond business joined hands. They agreed on a price that is expensive to the public yet beneficial to them. Additionally, if diamonds were really rare how come people still own them? You may know many people in your social group who own a diamond. But you hardly ever know anyone who owns Rubies, Sapphires and Emeralds. Because those really are rare. Diamond is the most common of all.
By naming it a conspiracy, the diamond suppliers have ensured that if the rarity of diamonds is questioned, the answer would never be white or black. It will always be grey, always in doubt.
And honestly? The way the rich have always gotten rich and the poor, poorer in our capitalist society, the counter-counterargument is really not that hard to deny.
Conclusively, when I started writing about this I wanted to let people know about this conspiracy. Then I turned to debunk it. And now I feel like the explaining guy meme because it's all muddled up.
So, dear readers, all the facts, claims, and arguments are now yours. The ball is now in your court to decide:
Are diamonds really rare or they are made to be?
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