Newly engaged women flaunt their "rocks," Marilyn Monroe sang about "a girl’s best friend," and being "iced" is the style on the streets. Diamonds have become American icons of wealth and refinement, and while there’s no question that the little gems are something special—diamond is the hardest natural substance known to man—their status today has much more to do with marketing strategy than any inherent quality, and being aware of their history will help you sparkle with both intelligence and style.
Edward Jay Epstein, journalist and author of The Rise and Fall of Diamonds: The Shattering of a Brilliant Illusion (1982) and The Diamond Invention (1982), has written extensively about the origins of the diamond marketing strategy and the ways in which it has shaped our modern view of the gems. According to Epstein, diamonds were once a very rare commodity; until the middle of the 19th century, India and Brazil were the only two diamond-mining countries. But in 1867, a fifteen year-old discovered a diamond on his father’s farm on the south bank of the Orange River in South Africa and by 1882, African diamond mines produced more stones than both India and Brazil had in the previous 2,000 years. Suddenly, the market was flooded with diamonds, a problem for British financiers who controlled the mines because the price of the stones—which Epstein points out have no intrinsic value—depends entirely upon their scarcity.
Enter Cecil B. Rhodes, an eighteen-year-old asthmatic whose family sent him to South Africa in 1871 for his health. Together with his business partner Charles Rudd, they formed the De Beers Mining Company in 1880, and by 1888 had built a monopoly of South African diamond mines.
But Rhodes knew that controlling the diamond supply wasn’t enough; he had to control demand, too. He formed the Diamond Syndicate, an alliance of South African merchants who agreed to follow Rhodes’ lead in protecting their common interests: high prices and a public perception of scarcity. In 1926, a German immigrant named Ernest Oppenheimer bought De Beers and formed an even larger corporation, the Diamond Trading Company. Oppenheimer and his son, Harry, continued Rhodes’ efforts to create a worldwide monopoly. Especially after new discoveries of diamond reserves in Australia, Siberia, and Western Africa threatened to erode De Beers’ position as sole supplier, the Oppenheimers focused on maintaining the public perception of diamonds’ rarity by purchasing surpluses and launching a comprehensive advertising strategy.
Diamonds Are a Girl’s Best Friend
De Beers' marketing strategy, at least by Epstein’s account of it, is alchemic: take a tiny carbon crystal and turn it into a universally-regarded symbol of love and prestige.