I remember a while ago watching a documentary about the diamond business… specifically the part about DeBeers and its monopolistic human-rights violating practices. However, after doing a search on the web, I was only able to come up with this reference:
Which is obviously outdated, since DeBeers runs commercials in the US all the time now.
My question: When did DeBeers lose its status as a monopoly? And how?
Also, if I wanted to buy a diamond that didn’t pass through DeBeers hands, how would go about doing that?
Thanks for the help!
Scott
P.S. The human rights violations had to do with DeBeers not allowing their diamond miners, mostly black south africans, to have congugal relationships with their wives and forcing them to live in mud huts for months at a time. I did have a URL for that at one time, but I don’t think it’s available any more.
Historically, the U.S. federal government has only taken legal action to break up DOMESTIC companies that engage in monopolistic practices. DeBeers is not an America firm, and so it has been considered off-limits by the U.S. Justice Department.
I’m not a lawyer, so I won’t offer an opinion as to whether we COULD take action against a foreign-based monopoly, but I question whether it would be worthwhile. Given the huge international demand for diamonds, and DeBeers near-stranglehold on the diamond supply, I suspect DeBeers could play hardball with the U.S. government, and maybe even win.
It’s not so much the idea of breaking up DeBeers, which the US could not do, but the idea that at one time DeBeers was not allowed to operate in the US and had to do all its US business through a third party (Ayer’s); however, you can currently find DeBeers business, ads, etc., all over the place.
What changed? When did it change? Why?
Also, many people point to the diamond business as one of the major starters of the aparthied concept. Was it because of the end of aparthied that the US policy changed?
As a matter of fact, due to antitrust concerns, DeBeers’ executive do not travel to the United States (to avoid subpoenae, service of process, etc.)
Source of information: Several articles in The Economist, which seems to have an unhealthy obsession with DeBeers.
That was indeed a kick-ass documentary! I enjoyed it so much that about 6 mos. ago I tried to find it again. I got as far as nailing down the exact title, producer and airdate:
The Diamond Empire
Produced by Bee Reynolds
Aired on Frontline (PBS) on 2/1/94
The doc said – as other posters have mentioned – that there is a standing anti-trust suit (or is it an actual violation/conviction?) against DeBeers, thus no execs enter the US for fear of being slapped with a subsoena.
The doc also said that one of DeBeer’s monopolistic tactics is to buy out all new gem sources the moment they enter the marketplace. A new diamond strike in Australia, and the Soviet diamond supply that burst on the scene when the Iron Curtain fell, are the two illustrations they gave. So, bottom line: good luck finding a non-DeBeers diamond outside of an antique shop.
(BTW, you mention Ayers. Are you talking about N.W. Ayers, the Chicago-based ad agency that (I think) creates DeBeers’ advertising? They are not in the gem-selling business.)
MINOR HIJACK: The second most facinating thing the doc taught me is that diamonds are not rare. There is a huge glut of them in the world, but they are released into the marketplace at a trickle – by DeBeers – in order to keep the prices artificially high.
The MOST fascinating thing I learned is that everybody who currently owns a diamond – your grandmother, the Queen of England, your fiance, etc. – has unwittingly been recruited as a “co-conspirator” in DeBeers’ scheme. Why? Because if diamonds were valued at their real market rate (not very rare) instead of today’s artificial rate (rare), the value of EVERYBODY’S diamonds would sink like a stone overnight. Money – not just politics – makes strange bedfellows, too.
A tidbit you forgot to mention is that the “tradition” of the diamond engagement ring (as applicable to the common person) was invented by DeBeers about 100 years ago.
I saw that “Frontline” commentary, too.
Russia and Australia are beginning to buck DeBeers - they now have a mere 50% of the market instead of 70%, and are beginning to hit back. An interesting article here:
I’m not a lawyer either, but I would guess being barred from selling your product in the US (except through intermediaries) does not bar you from advertising it should you wish too.
Overall, DeBeers behavior as a corporation makes Bill Gates look like a socialist, makes Nike look like a charitable organization, and the only reason why the marketing tactics of the tobacco companies are more odious is that DeBeers isn’t marketing a product that actually presents any health risks to the consumer. They only convince people to give up unreasonable amounts of money for a pretty rock.
One commentator I heard on NPR suggested that a diamond was actually a “semi-precious” stone, and should sell for about a tenth of its current price. That may be a bit extreme, but it is definitely true that DeBeers has enjoyed 100 years of a very inflated market due to their operating a cartel.
Gee, maybe somebody ought to report a bug to vBulletin corcerning their automatic URL parsing. Although uncommon, commas are legal parts of URL names, as in that one I just posted. “,1151,4877,00.html” is part of the URL.
Thanks for the info on the documentary… I’ll have o see if I can find it again; it’s been a while since I’ve seen it.
I do remember the information on the idea that diamonds are not rare at all and that DeBeers buys up any excess in the marcketplace in order to keep prices artifically high. Just think of it… storehouses with tons of diamonds in them that just stay there for years.
It all seems ironic: The object that is supposed to be a symbol of the deepest love comes from a company that one might actually have the inclination to call evil after hearing their practices.
Believe it or not I lost a friend when I told her about the information from that documentary. Then again, it could be my fault: All she did was say “I really think those DeBeers commercials are romantic.”
yabob:
Thanks for the link… good information there. I’ve actually heard, though, that the diamond engagement ring dates back to the 15th century, at least according to my “Extraoridnary Origins of Everyday Things” (by Charles Panati) book.
I wouldn’t doubt, however, that DeBeers made it popular and then a required part of the wedding process.
So what does one do when he wants to ask a girl to marry him but not partake in the depravity of DeBeers?
Yep. The engagement ring went back to the 15th century for the aristocrats who could afford it. DeBeers marketing stroke was the idea that the common man should pony up two months of wages. Before that time, ordinary people may have gotten a gold ring, perhaps with the woman’s birthstone, and usually did not spend that much money on it.
If you want to impress your SO with a precious stone, without serving the DeBeer’s monopoly, why not go for a genuinely rare stone, like a saphire? Star saphires in particular are amazingly beautiful, but also extremely expensive, so weigh the pros and cons accordingly.
Remember, when you buy a diamond you are heping to keep the war in Sierra Leonne going.
It has been suggested by Tony Blair and several other politicians that the only way to stop some of these greed driven conflicts is to boycott the mercants who deal in stone obtain from such places.
Incredible amounts of money have been spent by De Beers in finding a way to authenticate natural diamonds because of the threat of artificial ones. It might now be possible to identify which area they came from too.
In an effort to hang on to their monopoly De Beers have experimented with laser-etching gemstones with their copywrighted trademark.
The mark is minute but it makes the differance in the price of the two. This has to be the ultimate in that pointless excercise - the designer label.
I’ll have to think about alternatives to diamonds… but that’s not my first inclination. One thing I have heard about is a field in the midwest where you can search for diamonds yourself by sifting through a “diamond field”. Only thing is, I’m on the west coast.
So, casdave, tell me more about Sierra Leonne… I haven’t heard anything about.
This all reminds me of a Bloom County comic strip:
Opus: Um… I’m recently engaged. Apparently I need some diamonds.
Salesman: Certainly! We’ll make it simple… What’s your life savings?
Opus: Actually, I was saving so we could go on an African photo safari…
Salesman: Come sire! Why spend money on a life-enriching experience when you could blow a wad on a chip of glass-like material? Remember… a diamond is forever!
Opus: Forever what?
Salesman: We’re not sure, but the woman who dies with the most wins!
Opus: WHO STARTED THIS COCKAMAMY IDEA?!
Salesman: Guilty!
Opus: Well, heck… I can’t afford much.
Salesman: Sir! Maybe there’s a minor purchase you could put off…
Opus: [walking away with a huge diamond ring] Shoot… who needs a house??
And in the background, there’s a sign that changes from “Remember! A woman without diamonds is a tree sloth!” to “…is gross buckets!” to “…is like a day without twinkies!” to “is a parsnip.”
finds himself caught between logic and social obligations
Personally, I’m hoping the synthetic diamond biz gets its act together enough to make gem-grade diamonds indistinguishable from the ones dug out of the ground. Then we can pretty much wave the DeBeer’s monopoly bye-bye.
More miscellaneous sapphire trivia: Sapphires are generally cheaper than ruby; they are the same stone (corundum) but the true red ruby is pricier that an excellent quality sapphire. If a corundum is pink, green, white, yellow, orange, blue or black it’s a sapphire; if it’s red or reddish-purple it’s called a ruby. Top quality rubies and sapphire are expensive, but still less than a top quality diamong, and a primo emerald tops them all. Most synthetic stars are “Lindys”, so named for the company that made them–look on the back and you will see a small cursive capital letter “L”.
I have my doubts–haven’t we discussed thie before, tracer? Or was it someone else? You are buying romance, not a certain chemical composition. Just try to buy your girlfriend a synthetic diamond for an engagement ring. I’d rather have a plain gold ring than a synthetic stone for my engagement ring, and I am more accepting of synthetics than most. The synthetic stone market has affected the cheapo colored stone market, but people who want a top quality colored stone are still willing to pay for it. I trust that diamonds will be the same. The synthetics will be used in earrings, bracelets, etc., but they’ll almost certainly make little inroad on the engagement ring market, and very little for the high-end diamond market as well. They will affect the poor-quality diamond market, I predict–the yellowish, cloudy stones used in inexpensive jewelery. DeBeers will lose a segment of their low-end market if diamond synthetics become competitive, and will have to adjust, but the high-end will remain relative untouched, I suspect.
Yeah, tracer, a flawless ruby is worth more than a flawless sapphire (and both are worth more than the free-market price of diamonds), but I had understood that a star sapphire (whis is actually flawed, from a crystalography standpoint) was worth more than a ruby. Yes, they can be synthesized, but so can rubies (same chemical, different impurities), and star gems have to be harder to make than non-stars.
Besides, I happen to think that sapphires are prettier.
Stars aren’t any harder to synthesize than a non-star synthetic–as tracer noted, synthetic stars have been around for quite some time. Quarts, garnet and mica can also exhibit stars (“asterism”) if cut properly. The “star” comes from the “silk” (usually rutile needles) in the stone. Heating the stone can eliminate much of the silk, resulting in a clear stone but one without a star (many sapphires are heat-treated to remove the silk). Most stars you see are totally opaque with silk, which is not desirable in a star. The best stars are brilliant, clear blue, with just enough silk to give it a strong star.
Maybe we’re starting something here. This is at least the third thread in the last 8 months or so that evolved into a debunking of the whole DeBeers-created myth about diamonds.
See, for example, my rant at
You are buying romance, not a certain chemical composition. Just try to buy your girlfriend a synthetic diamond for an engagement ring. 
I’d rather have a plain gold ring than a synthetic stone for my engagement ring, and I am more accepting of synthetics than most. The synthetic stone market has affected the cheapo colored stone market, but people who want a top quality colored stone are still willing to pay for it. I trust that diamonds will be the same. The synthetics will be used in earrings, bracelets, etc., but they’ll almost certainly make little inroad on the engagement ring market, and very little for the high-end diamond market as well. They will affect the poor-quality diamond market, I predict–the yellowish, cloudy stones used in inexpensive jewelery. DeBeers will lose a segment of their low-end market if diamond synthetics become competitive, and will have to adjust, but the high-end will remain relative untouched, I suspect.