I’ve previously mentioned, in passing, how the concept of the diamond wedding ring was manufactured. I’ve now been reminded of this upon rediscovering Edward Jay Epstein‘s comprehensive 1982 article in The Atlantic charting the story of how De Beers created the entire market for diamonds through supply/demand manipulation and PR.
De Beers proved to be the most successful cartel arrangement in the annals of modern commerce. While other commodities, such as gold, silver, copper, rubber, and grains, fluctuated wildly in response to economic conditions, diamonds have continued, with few exceptions, to advance upward in price every year since the Depression. Indeed, the cartel seemed so superbly in control of prices — and unassailable — that, in the late 1970s, even speculators began buying diamonds as a guard against the vagaries of inflation and recession.
The article has numerous quotes from the strategy documents of the advertising agencies involved in the PR: N. W. Ayer and J. Walter Thompson–the former classing their assignment as “a problem in mass psychology”.
It’s a fascinating phenomenon set to become even more interesting now that the technology to mass produce flawless diamonds in a laboratory is becoming affordable: Wired looks at the rise of the manufactured diamond.