Diamonds on Demand
smithsonianmag.com
smithsonianmag.com
The instinct of demonstrating class with expensive jewelry will not go away, however. Some other material will take the place of diamond - maybe some alloy of rare metals. Or maybe new luxury brands will arise, with a 30,000% markup on some quality, (well-)designed piece, maybe or maybe not containing diamonds.
This is, of course, assuming that diamond reaches the price of glass, which I strongly doubt that it will.
Last, in response to the OP, it is not the diamond trade which is the main problem. It is people doing evil things to one another. Just as crushing one monopoly will not end the practice of monopolies, crushing one evil empire will not end the practice of evil empires. Just wait 20 years and some evil trade will pop up in some other place. This focus on one particular phenomenon is counterproductive, because it blinds us to the general principles behind it.
It is where a luxury comes from -- not what it ends up being -- that is important in determining its value.
If DeBeers can convince people that manufactured diamonds are inferior (and believe me, they will), then diamonds will become like wine or coffee, with connoisseurs who know where the diamonds came from, depth and geologic history, mining conditions, etc. People will brag about how much they paid to signal wealth, since a diamond will no longer be inherently expensive.
Nobody, as far as I know, buys luxury goods which are absolutely indistinguishable from cheaper versions. A $300 bottle of wine tastes somewhat better than a $10 bottle. A $5000 watch is better crafted than a $50 watch.
Paying big money for a luxury good only impresses people when they can tell it was expensive without you _actually_ telling them. Ideally the expense will be non-obvious unless you're in the know (which is why rich guys like wearing fancy watches instead of big heavy gold chains around their necks) but there has to be a nonzero difference.
People pay more for wine in bottles, even though the same wine in a box is cheaper.
http://www.google.com/search?q=%22No+cork+sniffer+would+be+c...
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A $300 bottle of wine tastes somewhat better than a $10 bottle.
It also sells for $300, despite the fact that the $10 bottle of wine can be made indistinguishable from the $300 bottle of wine by merely adding a few dollars' worth of chemicals.
http://www.usatoday.com/tech/science/2006-09-11-wine-chemist...
chemists are trying to isolate chemicals that produce desirable fragrances and flavors. ...
many wineries are shunning such technology and embracing distinctly Luddite, back-to-the Earth growing techniques such as using things like "Preparation 500," the springtime vineyard spray made from the manure-stuffed cow horns, buried over fall and winter, then ground up and mixed with water.
"We're trying to make better wine through alchemy," joked Jim Fullmer, director of the Philomath, Ore.-based Demeter Association, a non-profit group that certifies vineyards as "biodynamic" — a sort of hyper-organic designation that means the vintner relies on such things as lunar cycles and planetary alignment rather than chemistry.
"Biodynamics is probably the exact opposite," Fullmer said. "Winemaking is an art."
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People do not pay $300 a bottle for wine that tastes better. People pay $300 a bottle for wine that makes them feel romantic -- wine based on such things as manure-stuffed cow horns, lunar cycles and planetary alignment.
Diamonds are just commodities. The original packaging doesn't count for anything. While some customers will believe the DeBeers marketing message that mined diamonds are somehow superior, many will buy purely on price versus cut / color / clarity / carats. This must drive down the price.
"The De Beers diamond advertising campaign is acknowledged as one of the most successful and innovative campaigns in history."
"$11,000," replies the second, preening.
"Ha!" the first says triumphantly. "I paid $25,000!"
The raw material, carbon, is cheaply available. The scarcity is an engineering problem, which is being solved.
But scarcity is what makes mined-diamonds valuable.
http://www.google.com/search?q=exclusivity+luxury
How did you get the idea that diamond-scarcity is a problem?
IMHO, DeBeers and the perception of diamonds as scarce and valuable can only stand against engineering progress for a limited time.
Some lines in the Smithsonian article are almost word for word right out of the Wired one which seems slightly odd.
Either way, a very interesting topic.