Why Are Diamonds So Expensive?      

How did a polished pebble become one of the most expensive things on Earth? Well, the answer is quite simple: propaganda and monopoly.

Two hundred years ago, diamonds were not so common and were mostly worn by royalty (because, of course, they were the only ones who could afford them). This thing changed in 1870 when huge deposits of diamonds were discovered in South Africa and people realized that diamonds were not so rare after all.

But why aren’t diamonds cheap? Well, it all started with a man named Cecil Rhodes who decided to invest in what later became a huge industry: he started buying shares of the diamond mines. It took him 18 years to gain control over the entire South African supply of diamonds. Although Rhodes’ name might not sound so familiar, you may have heard of the previous owners of the farm where his diamond company started – the De Beers. The fact that Cecil Rhodes did not believe in a lawful way of doing business is not a surprise: over the years, Rhodes turned his business into a cartel and then a monopoly. He crushed his competition and controlled diamond production.

Things started to change when Depression hit and Americans couldn’t afford diamonds and jewelry anymore. According to a study from 1939, a third of the brides at the time got married without an engagement ring.  So, things had to change for the De Beers.

The company asked the advertising agency N. W. Ayer for help. They wanted to know if “propaganda in various forms” could increase diamond sales. The agency found out that customers believed diamonds were ridiculously expensive and they soon realized that the way into people’s wallets was through their hearts. This is how one of the most successful advertising campaigns in American history started.

De Beers started using celebrities to promote their diamonds and even started their own newspaper in which they promoted their products. In 1948, Frances Gerety came up with the famous phrase “A Diamond is Forever,” which had a double purpose: it was a metaphor for eternal love and it made people believe that buying diamonds was a good investment (of course, it wasn’t!). Diamond rings sales began to rise and, by 1968, 80% of American brides had one.

Although people were buying diamonds, De Beers wanted more. They took their advertising campaign to the next level in the 1980s with slogans like “Isn’t two months’ salary a small price to pay for something that lasts forever?”

So, now you know: the “tradition” of spending two or three months’ salary on an engagement ring comes from the people who were actually selling it, not buying it. They also introduced the famous “Four Cs” (cut, clarity, color, and carat) which were part of another marketing strategy, created to advertise smaller diamonds. De Beers finally lost its monopoly on the diamond market in 2000, but the prices are still high, even today, 16 years later.

Maybe it might be time to rethink this whole engagement ring situation and find another, cheaper and way better way of showing our love. What do you think?