I’m saving you money, honey

As a member of the twenty-something set, my Facebook feed often looks like a Pinterest site filled with roses, rings, ribbons, THE DRESS, and other pretty things. And as a recently married member of the twenty-something set, I was certainly an enthusiastic contributor.

The slice for "Men" is made up of just my Dad.

Among the pictures and posting, though, it was interesting to see how many well-worn and worthy traditions have weathered the storms of modernity.  For the most part, women — not just the straight ones — change their last names, are walked down the aisle by their father/parents, do the garter belt thing, and wear diamond engagement rings.

All of which makes sense, though maybe not for everyone and maybe for different rea

sons.  Take diamond rings.  They’re beautiful.  They can be so classy and make you look like a million bucks no matter what the hell kind of bed head you’re rocking.  But not because they’re expensive — because they sparkle in the light, are a neutral tone, and are generally adored.

And why are they generally adored? Because they weren’t always.  In fact, as you probably know, diamonds have no intrinsic value — you can use them to do anything else but look pretty.  The only reason they cost a bajillion dollars per carrat is because De Beers wants them to and they are totally cool manipulating your emotions, free markets, the lives of many hundreds of thousands of miners and traders to make sure they will forever make bank on some clear rocks.

Well, that got intense right quick!

No, De Beers, not Da Bears.

As I was saying, De Beers.  They’re a cartel.  A cartel is a group of people or companies who control the price and flow of a particular good.  Like oil (OPEC).  Or diamonds.  They aggressively control the entire market and make sure they earn serious profit.  A cartel is more or less the opposite of a free market.

De Beers came about upon the discovery of huge diamond mines in South Africa, which caused the world’s supply to go from a few pounds a year to a whole lot more, instantly.  Previously, we didn’t need a cartel to keep prices high because there were so few diamonds to begin with.  As you’ll recall from Macro Economics 101, when they’re not much of something and a lot of demand, people will pay a really high price naturally.  That’s called capitalism.

But when suddenly you discover a giant mine of that something, you’re going to have a hard time charging the same really high price.  That’s called a problem.
De Beers solution to this problem — and this is where it gets crazy — was to literally invent diamonds as we know them.  This fascinating article in The Atlantic from 1982 describes their coordinated, subtle, and market-shaping campaign to make the West love, and I mean love, their diamonds.  And I don’t mean a brand of diamonds, I mean diamonds themselves, and entirely new market.  De Beers didn’t attach its name to early initiatives because it knew they first had to create the concept, the sense of need, for their product in America:
We seek to … strengthen the tradition of the diamond engagement ring — to make it a psychological necessity capable of competing successfully at the retail level with utility goods and services….”
They courted movie starts to start flashing their diamonds, imbuing the essentially worthless rocks with priceless status value and basically creating “product placement”.  They used the press, socialites, and anyone willing to play along to further the idea that a diamond ring was the only way to propose, that diamonds meant true love.
That diamonds were forever.
That slogan was written in 1947, around the same time that De Beers because running lectures for high school students on diamonds and setting them as the standard for “making it” (men) and “a lifetime commitment” (women). HIGH SCHOOL STUDENTS.  I KNOW.
The other crazy angle of this whole campaign, which continued unabated until, well, it hasn’t stopped, is that De Beers had to make sure that people couldn’t re-sell their invaluable diamonds and create a shadow “second-hand” market outside of their control.  Part of the whole dominating the universe thing.  So they also made sure that people felt a deep, profound emotional attachment to their diamonds so that they’d never, ever sell them back.  The campaign was so effective that even when people did try to sell their diamonds, they found no one willing to pay close to their “value”.  Because they really had no value.  Who wants someone else’s forever?
The entire shebang, which created a big something from literally nothing, was enormously successful.  “In 1939,” The Atlantic points out, “the year [diamond advertising agency] N.W. Ayer had partnered with De Beers, diamond sales were stagnant at $23 million. By 1979, sales were at $2.1 billion.”
N. W. Ayer noted also that its campaign had required “the conception of a new form of advertising which has been widely imitated ever since. There was no direct sale to be made. There was no brand name to be impressed on the public mind. There was simply an idea — the eternal emotional value surrounding the diamond.”
De Beers’ effort to psychologically cement diamond with engagement and financially successful was such a powerful formula that it has withstood new kinds of diamonds popping up all over the place (Siberia – now you want tiny diamonds!; Australia – now you want colorful diamonds!), revolts by smaller competitors, and, most notably, conflict diamonds that are used to finance warlord insurgency in many African nations.
Recently De Beers began to issue conflict-free certifications on some of its diamonds, but there is ample reason to believe the certifications are meaningless.
Which is all to say, diamonds are beautiful, but so is a cubix.

One thought on “I’m saving you money, honey

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s