hello I'm Simon Whistler you're watching
the today I found our YouTube channel
and in the video today we're looking at
the truth about diamonds and how exactly
we became quite so obsessed with them an
expensive meal at a fancy restaurant a
declaration of romance and a big fat
diamond during this is a pretty standard
formula for an engagement proposal after
all it has been ingrained in all of us
that a diamond ring equals love and the
bigger the diamond the more love there
must be well believe it or not diamonds
really aren't all that rare in fact the
reason diamonds cost so much is more due
to savvy and sometimes unethical
business practices and incredibly
successful advertising campaigns than
actual inherent value of the stone based
on supply and demand something anyone
who has actually tried to sell a diamond
quickly comes to realize here now this
the story of how and why we fell in love
with diamonds the first known diamonds
discovered by humans happened about 700
or 800 BCE in India by the Dravidian
people who are still found today in
southern India and Sri Lanka in fact
this is where we get the unit of wait
for diamonds carats from they would
weigh the diamonds in relation to the
seeds of a carob tree diamonds appear in
ancient tales dating back to at least
2,500 years ago including ones involving
Alexander the Great and Sinbad the
sailor Pliny the Elder in his 78 AD
encyclopedia natural history also spoke
of diamonds Eastern traders brought them
to Europe along with silk spices and
other exotic goods and they were used as
valuable trade items but those ancient
diamonds weren't these stunning
brilliantly cut stones we know today
they were dirty rarely cut or polished
correctly and were often quite dull the
dazzling stones we recognized from
modern times are put through
labor-intensive cutting and polishing
which is where much of the real albeit
relatively small value of all that the
largest of diamonds actually derives
from as Joan Dickinson's book the book
of diamonds puts it diamonds could lie
around unnoticed for decades in the
ground of India before a knowledgeable I
could spot a diamond in the rough even
with diamonds being found in the jungles
of
in the early 19th century and including
India's contribution the entire world
production of gem diamonds was only a
few pounds per year at this point that
all changed in 1869 prior to 1869 at
South Africa's main exports were wool
and sugar I think that was rare raw
native to the region there was nothing
there that really interested Europe
hence why the Scramble for Africa nor
the nickname for the European takeover
of Africa didn't begin until 1881 so
what changed in 1866 a young borough a
word referring to a South African farmer
of Dutch or German descent found a 22
carat diamond for comparison nearly half
the size of the Hope Diamond in a
streambed near Valley River in
modern-day South Africa three years
later an 83 carat diamond was found by a
shepherd boy near the Orange River in
South Africa
nicknamed the star of South Africa the
diamonds touched off a rush in South
Africa with the British leading the way
soon after four mines were dried Argon's
the largest diamond deposit ever was
found the largest of these mines was
called the Kimberley mine or the big
hole diamonds came out of those mines by
the ton the value of land in the region
and subsequently the rest of Africa due
to the hope that there were more
diamonds to be found shot up a titanic
struggle turned war for land began
between European powers most notably
Britain and the Bur population who lived
in the region for four months between
December 1880 and March 1881 the first
anglo-boer war raged the British would
end up winning but at a much higher cost
of manpower than originally thought 408
British soldiers were killed while only
41 Boers 18 years later the second
anglo-boer war would commence with even
greater casualties meanwhile the
fighting and the sheer amount of
diamonds coming out of the South African
mines were making the British owners of
the mines quite nervous
the value of their products depended on
scarcity and demand with too many
diamonds and a market fearful of the
violence the demand was dropping and the
value of diamonds went down in the late
1880s diamonds were essentially a
semi-precious stone equivalent to
today's turquoise or topaz and many of
the
mines were at risk of closing enter
British native Cecil Rhodes who got his
start renting water pumps to miners in
1869 at the beginning of the South
African diamond rush from the money
earned he bought up claims of land from
smaller mining operations when many
small operations were closing and
selling land due to the over saturation
of diamonds in the market Rhodes was
buying ignoring the more established
Kimberley mine
he made the purchase that would send him
into history the old deBeer mine was
owned by two Bowa brothers Johannes
Nicholas Tobin and dear trick Arnold
Asst Rhodes bought it off them at the
time for a reasonable price as Rhodes
his Empire continued to grow the
immensely wealthy Rothschild family or
at least their bank providing some
financial backing it's unclear how
Rhodes and Rothschild knew each other
and as every other South African mine
leveled off the De Beers mine did not in
1888 as diamond prices continued to fall
there were only a few mine owners left
including Rhodes and his De Beers mine
the remaining vine owners decided that
the only way their industry would
survive instead of competing with one
another was to consolidate and form one
giant mining company the intention was
to create a monopoly in the industry
centering all the production mining and
lands in the hands of one corporation
and that corporation was De Beers
consolidated mines Ltd headed up by
settle roads from that point forward to
the De Beers company was nearly the sole
owner of every single South African mine
roads in De Beers created individual
subsidiaries and trading companies to
make it look like these were different
companies operating independently they
were not and were all part of the parent
De Beers company today these would be
called shell corporations and would be
illegal in most regions of the world
essentially what DeBeers was able to do
was set one standard or fixed diamonds
price with minimal fluctuation between
their subsidiaries and make it look like
the markets at the price the actual
supply and demands value didn't matter
anymore because De Beers controlled all
of the supply as in 1982 the Atlantic
article put it De Beers proved to be the
most successful cartel
changement in the annals of modern
Commerce upon sesor roads is death in
1902 De Beers owned 90% of the world's
not just South Africa's diamonds
production but after years of ruthless
business practices his company was about
to be outsmarted the premier mine later
called the Cooley nion mine after the
town it was located in was one of the
only mines not owned by De Beers despite
overtures from the company about buying
it the owners didn't want to contribute
to the De Beers monopoly so instead they
sold to the independent dealers the
Oppenheimer brothers in 1905 the largest
rough diamonds ever found was in the
premier mine weighing in at an absurd
3106 carats now the Oppenheimer brothers
particularly Ernest Oppenheimer we're in
business and a stoppin heimer knew that
while his own anglo-american corporation
was doing well no one would be able to
defeat the De Beers at this time Ernest
Oppenheimer knew that while his own
anglo-american corporation was doing
well no one would be able to defeat De
Beers at this time so he took the
expression if you can't beat them join
them very seriously using his newfound
wealth he bought enough shares of De
Beers to land himself on the board of
the company by 1926 he was the
second-largest shareholder in the
company behind only solely Joel as it
turns out Joel and Oppenheimer were
friends and had already conceived a plan
where Oppenheimer would become chairman
of the board
Oppenheimer did exactly this and renamed
the company the diamond corporation the
Oppenheimer's would hold control of the
company until 2011 in 1938 the diamond
industry was again in decline thanks to
the discovery of mines in Australia
Siberia and western Africa and the Great
Depression reducing sales which again
saturated the market so Ernest sent his
son Harry to New York City to meet with
the ad agency MWAA which was the same
agency that had helped their financial
backer Morgan Bank together they
realized that the United States was a
significantly under tapped market for
diamonds they just needed to figure out
a way to convince Americans to buy their
product they did just that by using the
happiest and perhaps occasionally most
irrational of human emotions
of using newspapers magazines the new
medium of movies and even a series of
lectures at high schools across the
nation centered around diamond
engagement rings they constructed the
illusion that diamonds equals love with
a bigger and more expensive diamond
meaning more love a dime endures forever
was shown in ads depicting young lovers
getting married or on their honeymoon in
truth diamonds are easily shattered
burnt and turned into carbon dioxide
with the help of an abundant supply of
oxygen these ads appeared in everywhere
often using big-name movie actors to
foster this connection and it worked by
1944 the sale of diamonds had increased
by 55 percent in the United States from
just a few years before and were now
inexorably tied to love and marriage as
well as being seen as a highly valuable
item that would last forever this idea
of diamonds being forever and to be
passed on from one generation to the
next was a particularly important notion
you see as more and more diamonds were
held by individuals eventually there
would be so many out there that if
people started trying to sell them the
reality of the value would be discovered
and the price of cut diamonds would also
ultimately no longer be controllable by
De Beers something not lost on the
company thus diamonds not only had to be
forever held by the individual but the
idea of buying a used diamond to show
affection had to be firmly taboo harry
Oppenheimer commented on all this in
1971 a degree of control is necessary
for the well-being of the industry not
because production is excessive or
demand is falling but simply because
wide fluctuations in price which have
rightly or wrongly being accepted as
normal in the case of most raw materials
would be destructive of public
confidence in the case of a pure luxury
such as gem diamonds of which large
stocks are held in the form of jewellery
by the general public in any event
thanks to a virtual monopoly and perhaps
the most effective ad blitz of all time
diamonds were here to stay and again De
Beers could set its price no matter if
supply was high or low in fact now the
higher the price the more loved one was
demonstrating the beers repeated these
types of campaigns
throughout the developed world with
resounding success
for instance in Japan in 1967 Darland
engagement rings were given by only 5%
of the population within a decade thanks
to some savvy advertising more than half
of all engagement rings
in Japan had diamonds on them with that
number rising steadily ever since today
thanks to a series of very recent events
including several lawsuits and something
in the way of a revolts by several
diamonds supplying nations against
appears to be as no longer has a
stranglehold on the diamonds market but
the idea that diamonds are the
traditional way to demonstrate true love
and that one should spend two months
salary on a diamond engagement ring an
idea embedded into popular culture by
Renauld diamond dad campaign first as
one month salary and later increased to
with the slogan how else could two
months salary last forever has kept the
diamond industry remarkably profitable
after all even for those who know all
about diamonds
thanks to popular perception giving the
gift of a diamond is still the de facto
way to convert money into a
demonstration of love with no immediate
end in sight so I really hope you
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