27th Jun 2008
Manufacturing gemstones
In a recent post from the Feminist Finance blog, describing the artificially inflated price of diamonds.
DeBeers, which controls the vast majority of diamond sourcing around the world, has spent the last several decades bottlenecking the diamond trade to create an artificial global sense of diamond scarcity and thereby to inflate prices…. Truly: who would buy these rocks at these prices if they knew just how common they were, when there are adequate, in some cases identical, substitutes that are less pricey? Why?
It’s all about PR. Mikimoto, cultured pearl king, didn’t become a success by announcing, “Hey, look at this, I’ve got a manufactured pearl,” and then sit back while “real” pearl sellers touted theirs as better because they were natural. He plastered them everywhere. He sewed them by the thousands onto gowns worn by celebrities. He made fabulous jewelry worn by celebrities. He made a Liberty Bell replica for the 1926 World’s Fair coated in, guess what, cultured pearls. He even destroyed, with great public fanfare, pearls made by his oyster farms which didn’t meet quality standards — showing just how many pearls he had and just how high his standards for beauty and perfection were. He also was quite canny to call them cultured pearls instead of manufactured, manmade, or any less-fancy word.
If today’s diamond makers want to have any chance of challenging the international diamond cartel, they need to get a good marketing team together to combat the vast publicity power of the diamond miners. Of course, they could always specifically target the nerd market. The only reason I’ve got a real diamond on my engagement ring is that it’s an antique, passed on to my husband by his grandmother. Otherwise I’d probably be happier with a manufactured diamond, because I’m weird like that and like technological sciency stuff. Besides…
they can also be cultured in different shapes–like flat, as for a window of a spaceship.
Who wouldn’t want diamond windows in their house? (Or diamond windows in their hydrogen-powered car, while I’m fantasizing…)
Diamonds are so expensive because they once were very rare. There is a millennia-old cultural expectation that diamonds should be the ultimate luxury. When the number of diamonds available skyrocketed, this expectation was slow to change, and prices never dropped the way they ought to have. DeBeers took advantage of this and moved in quickly enough to interfere with the free market while prices were still relatively high.
Of course, there are other items that were once extremely expensive but cost very little now, because they’ve become much more common. Most notable is salt, which was once so costly that even in a lord’s household, only the people seated near the head of the table were permitted to partake of it (the others sitting “below the salt”). Salt had to be mined from the beds of dried up lakes, which tended to be located in inhospitable regions like the Sahel. Nowadays, we can extract salt from seawater for next to nothing, and that’s a crucial difference between salt and diamonds. People all over the world have access to salt water, but diamonds, although much more common than they once were, still have to be mined from one of a small number of rich locations (the foremost being Kimberly). That allows the entity that controls the mines to keep the price of the gems artificially high, by not exploiting the resource fully.
But that’s part of my point — they don’t need to be mined! They’ll never be as easy to make as salt (unless we perfect Star Trek replicator technology), but there’s no need for an artificially bottlenecked mining method to be the primary source.