The De Beers Diamond Deceit

‘Diamonds are forever’, well at least that’s what the De Beers Diamond Corporation would like to make you believe. Whilst the diamond industry is often seen as one of the most profitable markets ($72 billion-a-year retail business worldwide) in our current world, when actually put under scrutiny there is insufficient reasoning behind it to merit the excessive demand that it carries. The explanation behind what appears to be a societal crave for diamonds can be tracked back to arguably one of the most effective advertising campaigns in the history of the world by the De Beers diamond cartel. Attaining their goal of creating a monopoly in the diamond industry, De Beers launched an extensive project that intended to (and successfully) indoctrinate the public in believing that the true way for a man to propose was with a big shiny rock on a ring, the target audience overtime became much more broad and went through the relationships of marriage, long-standing partner or even a short-term girlfriend.

Now of course the marketing campaign increased the demand for the product, but this wasn’t enough for De Beers who really sought out to take the weight off of the average man’s wallet by increasing the price of their diamonds. At the forefront of the movement to create a façade of a limited supply was a man named Ernest Oppenheimer, who managed to create a complex network of wholesalers that meant at the height of the monopoly led to the De Beers Corporation retaining 90% of rough-diamond trade. The method in which the supply of diamonds are swept under the blanket is not that far from the idiom used to describe it, the majority of diamonds are stored in different vaults around the world including a major one in London away from the attention of the general public. This essentially leads to market failure due to the exploitation by the producers of the concept of ‘imperfect knowledge’ between themselves and the consumers, as the purchasers have little or no knowledge of the true scarcity of the product they assume that the exorbitant price tag is indeed a fair one, when it fact the truth differs majorly.

This essentially leads to market failure due to the exploitation by the producers of the concept of ‘imperfect knowledge’ between themselves and the consumers, as the purchasers have little or no knowledge of the actual scarcity of the product they assume that the exorbitant price tag is indeed a fair one, when it fact the truth differs majorly. Often a point does arise at which the purchaser decides to resell the diamond that they have bought; it is at this moment that they realise that the diamond actually has very little intrinsic value. Research has shown that after walking out of the jeweller that you have bought the diamond from, the product loses over 50% of its original value. Why has this not already been highlighted in society?

Well yet again the De Beers Corporation have managed to instil another societal habit of thinking that ‘diamonds are forever’ in order to limit the amount of reselling.

 

Contributed by Ansh Puri 12 CR

One thought on “The De Beers Diamond Deceit

  1. Despite agreeing with your argument, I found it increasingly difficult to follow the content of what you were saying. Albeit very interesting, it would be great to work on syntax and sentence structure in order to improve the ‘readability’ of your article.

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