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The Business of… Diamonds

Everyone knows they’re a girl’s best friend, but did you know they’re in reality worth much, much less than you pay for them? Kipp gets a sparkle in its eye…

August 10, 2010 4:23 by

A marketing myth

Endowing objects with value – as in the case of diamonds or precious stones – is ultimately a choice made by human societies. It is usually based on beauty and scarcity, and a certain power of objects to inspire and endure in human trade and influence. In other words, it is a very human decision, and genius marketers know this.

“The diamond invention—the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem—is a relatively recent development in the history of the diamond trade,” contends Edward Epstein in a provocative report on the marketing campaigns of De Beers diamond sellers, entitled ‘Have you ever tried to sell a diamond?’” Epstein’s article is one of the most famous and alarming pieces of journalism written, and charts what he believes is the historic manipulation of all of human society into believing the value of diamonds.

Throughout the 20th century, De Beers masterminded a bold and ambitious ad campaign designed to “perpetuate the illusion of scarcity of diamonds,” Epstein says, even as diamonds were flooding the market following the discovery of vast mines in South Africa in the second half of the nineteenth century.

The result of their efforts has secured a central place for diamonds in the culture of wealth, affluence, and romance. But be warned: according to Epstein in reality the market is artificially maintained, which is why if you ever come to sell a diamond, you’ll get nowhere near what you paid for it.

 

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