Creation of an idea can utterly shape the entire globe. The Biggest trade in the history, which had very little intrinsic value and endangered investment, was a single monopoly which ruled the world with no brand name impressed on the public mind, dealing with mass psychology. I was merely a mechanism of converting tiny crystals of carbon into universally recognized tokens of wealth, power and romance by the work of a giant cartel inspired by the decades-long ad campaign. Yes, it’s the invention of the Diamond.
Publicized as a symbol of esteem, diamond trade was a daunting business. Found in the riverbeds of India and in the jungles of Brazil, where the production was limited to few pounds a year, the British financiers soon realized the potential of the unruly market for diamonds. Soon, huge diamond mines were discovered in South Africa, and suddenly the markets were deluged with diamonds. The major investors merged to control production and perpetuate the illusion of scarcity of diamonds. And thus they formed De Beers Consolidated Mines, Ltd., which operated as many forms over the countries.
De Beers proved to be the most successful cartel arrangements in the annals of modern commerce.
The unassailable cartel began to expand its roots. Since the depression, the diamond continued to grow steep in the market despite many fluctuations of other goods. To achieve this, De Beers had to control demand as well as supply. Diamonds were marketed as an inseparable part of married life. The stones were endowed with a sentiment that would prevent the public from ever reselling them. Thus the illusion was all set- that the diamonds are forever.
Oppenheimer, the son of the founder of De Beers, believed an advertising campaign could persuade the public to buy more expensive diamonds. N.W Ayer, a leading advertising agency underwent the research necessary for developing the campaign. Subsequent investigations revealed that “young men buy over 90% of all engagement rings”, and it would be crucial to inculcate in them the idea that diamonds were a “gift of love”: the larger and finer the diamond, the greater the expression of love.
The agency suggested exploiting all the mediums of motion pictures, newspapers, magazines, to reinforce the link between diamonds and romance. The advertisements created were intended to convey the idea that diamonds were unique works of art. Thus the trend was all set. Impressive results were achieved in its campaign. The sale of diamonds had increased by whopping 55 percent in the United States. The word of Diamonds was spread by stars on screen, by wives and daughters of political leaders who are prestigious “role models” for the poorer middle-class wage earners, making them long to own themselves one.
De Beers devised a new concept of the “eternity ring” which could be sold to an entirely new market of older married women. The advertising campaign was based on the theme of recaptured love. Later a new study indicated that the gift of a diamond contained an important element of surprise. The implications of this research were focused on advertising, inducing men with the idea that the “surprise” gift would enhance his standing in the eyes of a woman. Since the expansion of the sales of diamonds, the value increased nearly a hundredfold. The expenditure on advertisements seemed a brilliant investment.
However, the De Beers business faced various threats from the sale of “investment” diamonds to speculators in the US. A large number of fraudulent investment firms popped up, damaging the integrity of the diamonds. Moreover, there were wide array relative newcomers and bogus entrepreneurs to the diamond business and caused various tremors in the trade. A speculative fever was spreading over America. The diamond dealers were concerned about the possibility of a serious rupture, or ever collapse of the “pipeline” through which De Beer’s diamonds flown across nations. On the other hand, Israeli dealers began building up their own stockpiles of diamonds and began dealing directly from smuggled goods. The carter decided that it had no alternative but to force liquidation of the Israeli stockpile. The nightmare followed as new deposits around the world were discovered that were sufficient the world geography of diamonds, posing for the destruction of the Diamond inventor cartel.
Even in the midst of all other crisis that followed, the inventory of diamonds in De Beers vault has swollen to a humongous value since their inception. The avalanche that the diamond business had created in the market, with powerful advertising strategies, remains to be the most stunning illusion ever happened.