In this episode of Everything Should Be Better , Tristin Hopper explains how a company convinced the world to spend two month’s salary on a diamond engagement ring. Watch the video, or read the transcript below.
Let’s review some expensive minerals, shall we? Gold; very hard to find and extremely useful. So useful that some of it is in your cell phone right now. Thus, gold has always been super expensive and remains an excellent store of wealth. Bury some gold coins for 1,000 years, and chances are good they’ll be just as valuable when they’re dug up.
So how about diamonds? Not really that rare or valuable, and if you treat them as an investment you’ll lose your damn shorts: A retail diamond ring loses about 50 per cent of its value as soon as you leave the store. Note how there are endless ads asking you to trade in your gold for cash, but none for diamonds.
Weird, right? The only reason you’re paying thousands of dollars for a tiny, not-tremendously special gemstone is because a very shrewd British company tricked you into doing it.
Initially, diamonds started out being really expensive for the simple reason that they were hard to find. India used to be the only place you could get them, and it was a pain-in-the-ass process of sifting them out of river banks.
But then, in the last 19th century, a whole buttload of diamonds were discovered in South Africa. Under normal circumstances, this would have been the point at which diamonds just got really cheap for everyone. Aluminum, for instance, used to be more valuable than gold. But then we figured out a really easy way to get it, and that’s why a can of coke doesn’t cost $500.
But that didn’t happen to diamonds. Instead, this guy entered the picture: Cecil Rhodes. You may have heard of the Rhodes Scholarship or Rhodesia. Same guy.
By feverishly buying up all of South Africa’s diamond mines, Rhodes allowed his company, DeBeers, to essentially have monopoly control of the world’s diamond supply. By only selling a limited amount of them per year, DeBeers was able to keep prices artificially high.
But DeBeers wasn’t done. In the 1930s, diamond sales dropped off on account of that whole “everybody being broke” thing. So they thought up a brilliant plan: Just tell everyone that they have to pony up for a big diamond on their engagement ring.
Here’s some wedding rings from the early to mid 19th century. Notice anything? Not really a lot of diamonds, are there? There were some diamonds, to be sure, but they weren’t the central feature of the ring.
Through its “A Diamond is Forever” campaign, DeBeers singlehandedly popularized the entire notion of diamond engagement rings. This isn’t some hippie conspiracy theory, by the way: It’s right on DeBeers’ website.
Also, you know that whole thing where you’re supposed to spend two months’ salary on an engagement ring? It’s not in the Bible. It’s not some Ancient Welsh proverb. No; DeBeers invented that, too.
DeBeers’ cartel has now been broken. There are now diamond mines all over the world outside their control, including some big ones right here in Canada. We’re also pretty good at manufacturing diamonds artificially. Take a bunch of carbon, squeeze it real tight and, bingo, diamond.
But the myth continues: Diamonds are still slapped with ridiculously high price tags, and people keep paying it. And they probably always will, because here’s the thing: A surprising amount of our economy is essentially built on B.S., and diamonds are just one facet of that.
That bottle of coke you bought for $2.50 out of a vending machine? That cost about two cents to make.
You’re kind of being conned when you buy a lot of things, but damn are diamonds good at it. And for that, I salute you, worthless shine rock.
Copyright Postmedia Network Inc., 2019
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