Why Everyone’s Fed Up With the Diamond Industry

Last month, The Economist did something monumentally stupid — they posed a question on Twitter that they really didn’t want the answer to.

While their tweet linked to an article discussing the diamond industry’s increasing struggles in selling to socially conscious millennials, the question itself sparked outrage among Twitter users, and resulted in some hilarious — if not heartbreaking — responses.

But what sparked this conversation is a truly interesting turn of events. The diamond industry is in real trouble — but why?

Why people aren’t buying diamonds anymore

After the Lesedi La Rona diamond  — touted as the “find of a lifetime” — failed to sell at a Sotheby’s auction in June, the Lucara Diamond Corp wanted to know why. With millennials being a popular whipping post, The Economist pointed a finger squarely at Gen Y’s concern over conflict diamonds. Millennials, in turn, responded with a rather harsh lesson in the truth of modern economics.

Here’s the thing, though —  it’s not just millennials who are falling out of love with diamonds—it’s everyone. Ethical consumerism and money woes don’t belong to one generation alone. Yes, Generation Y is remarkably socially conscious, and yes, they’re broke as hell, but they’re not the only ones.

Ethically speaking, the diamond industry has a dark past. For years, conflict diamonds — diamonds originating from war zones — funded rebel fighters and insurgencies and perpetuated multiple human rights abuses. Forced laborers in diamond mines, many of them children, suffered violence and murder at the hands of mine owners.

In 2003, The Kimberley Process, a certification scheme established by a United Nations resolution, set out to right these wrongs. While they have had some success, there are major loopholes that still allow corruption to run rampant. While many diamond sellers tout their Kimberley Certification as proof of ethical diamonds, it’s nearly impossible to be 100% sure the diamonds they’re selling are conflict free — that is, unless they’re synthetic.

As for the money end of things, diamonds are a poor investment. They’re horrendously overpriced, and generally speaking, nothing more than a status symbol marketed as ‘the ultimate symbol of love’ — and believe me, when it comes to diamonds, it is all about the marketing. If you never knew the truth behind the diamond engagement ring, here it is in a nutshell:

In the late 19th century, British businessmen operating the South African mines realized the had to do something drastic in order to protect their investments and buoy diamond prices. They launched a cartel they dubbed De Beers Consolidated Mines, Ltd. (now De Beers), and extended the company’s control over all facets — no pun intended — of the diamond trade. They had supply down, next came demand.

In 1938, Harry Oppenheimer, the De Beers founder’s son, recruited an ad agency to persuade American men that diamonds were synonymous with romance — and that the measure of their success was proportional to the size and quality of the diamond they purchased. And women? Well, they were told that courtship ended in a diamond — or at least it better.

By controlling supply, De Beers was able to convince the public that diamonds were scarce and inherently valuable and raise prices. And by creating demand, they were able to ensure that they’d always have a steady flow of money into the coffers. They were even able to keep diamonds from being resold and causing the market to fluctuate. How? By linking them to love and marriage. After all, “a diamond is forever.”

We’re still recovering from the great recession. Millions of Americans lost their jobs, homes and savings. Generation Y is leaving college encumbered by horrific debt and unable to find work. So, when it comes down to it, why spend money on something that we only think we need…because we were told we need it…by the person who sells it? Especially when said sellers are responsible for the horrors of the African diamond mines.

Liz Greene is a makeup enthusiast, rabid feminist and an anxiety-ridden realist from the beautiful city of trees, Boise, Idaho. You can follow her latest misadventures on her blogInstant Lo.

Photo Credit: Thinkstock

105 comments

Jim Ven
Jim Venabout a year ago

thanks for sharing.

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Jim Ven
Jim Venabout a year ago

thanks for sharing.

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Marie W.
Marie Wabout a year ago

Thanks

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Wendi M.
Wendi Mabout a year ago

TYFS

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Quanta Kiran
Quanta Kiranabout a year ago

well jewellery (gold/diamonds) is out of fashion. because of the high crime rate.

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Siyus Copetallus
Siyus Cabout a year ago

Thank you for sharing.

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natasha salgado
Past Member about a year ago

Thrilled to hear millennials aren't gaga 4 diamonds. It's an ugly industry.

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Janet B.
Janet Babout a year ago

Thanks

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Clare O'Beara
Clare O'Bearaabout a year ago

The increase in the diamond market was driven by China. At the time of 1990s two couples in ten in China wanted a gold and diamond wedding ring. In 2010 eight couples out of ten wanted a gold and diamond wedding ring. But even China is building robot factories now and their boom is largely over because it was dependent on everyone else buying their goods. And we don't have jobs.

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Clare O'Beara
Clare O'Bearaabout a year ago

Fewer people are marrying. Fewer young people have jobs - around 40% youth unemployment in many of the European countries which the African and Asian migrants seem to think will give them shelter and work. Diamonds are not essentials.

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