Thursday, February 14, 2002

Econ-Atrocity: Ten Reasons Why You Should Never Accept a Diamond Ring from Anyone, Under Any Circumstances, Even If They Really Want to Give You One

Ten Reasons Why You Should Never Accept a Diamond Ring from Anyone, Under Any Circumstances, Even If They Really Want to Give You One
By Liz Stanton, CPE Staff Economist
  1. You've Been Psychologically Conditioned To Want a Diamond. The diamond engagement ring is a 63-year-old invention of N.W.Ayer advertising agency. The De Beers diamond cartel contracted N.W.Ayer to create a demand for what are, essentially, useless hunks of rock.

  2. Diamonds are Priced Well Above Their Value. The De Beers cartel has systematically held diamond prices at levels far greater than their abundance would generate under anything even remotely resembling perfect competition. All diamonds not already under its control are bought by the cartel, and then the De Beers cartel carefully managed world diamond supply in order to keep prices steadily high.

  3. Diamonds Have No Resale or Investment Value. Any diamond that you buy or receive will indeed be yours forever: De Beers’ advertising deliberately brain-washed women not to sell; the steady price is a tool to prevent speculation in diamonds; and no dealer will buy a diamond from you. You can only sell it at a diamond purchasing center or a pawn shop where you will receive a tiny fraction of its original "value."

  4. Diamond Miners are Disproportionately Exposed to HIV/AIDS. Many diamond mining camps enforce all-male, no-family rules. Men contract HIV/AIDS from camp sex-workers, while women married to miners have no access to employment, no income outside of their husbands and no bargaining power for negotiating safe sex, and thus are at extremely high risk of contracting HIV.

  5. Open-Pit Diamond Mines Pose Environmental Threats. Diamond mines are open pits where salts, heavy minerals, organisms, oil, and chemicals from mining equipment freely leach into ground-water, endangering people in nearby mining camps and villages, as well as downstream plants and animals.

  6. Diamond Mine-Owners Violate Indigenous People's Rights. Diamond mines in Australia, Canada, India and many countries in Africa are situated on lands traditionally associated with indigenous peoples. Many of these communities have been displaced, while others remain, often at great cost to their health, livelihoods and traditional cultures.

  7. Slave Laborers Cut and Polish Diamonds. More than one-half of the world's diamonds are processed in India where many of the cutters and polishers are bonded child laborers. Bonded children work to pay off the debts of their relatives, often unsuccessfully. When they reach adulthood their debt is passed on to their younger siblings or to their own children.

  8. Conflict Diamonds Fund Civil Wars in Africa. There is no reliable way to insure that your diamond was not mined or stolen by government or rebel military forces in order to finance civil conflict. Conflict diamonds are traded either for guns or for cash to pay and feed soldiers.

  9. Diamond Wars are Fought Using Child Warriors. Many diamond producing governments and rebel forces use children as soldiers, laborers in military camps, and sex slaves. Child soldiers are given drugs to overcome their fear and reluctance to participate in atrocities.

  10. Small Arms Trade is Intimately Related to Diamond Smuggling. Illicit diamonds inflame the clandestine trade of small arms. There are 500 million small arms in the world today which are used to kill 500,000 people annually, the vast majority of whom are non-combatants.


References:


© 2002 Center for Popular Economics

Econ-Atrocities are a periodic publication of the Center for Popular Economics. They are the work of their authors and reflect their author's opinions and analyses. CPE does not necessarily endorse any particular idea expressed in these articles.

7 Comments:

At 11:15 AM, Anonymous Tim Pridie said...

"Diamond mines in Australia, Canada, India and many countries in Africa are situated on lands traditionally associated with indigenous peoples. Many of these communities have been displaced, while others remain, often at great cost to their health, livelihoods and traditional cultures"

Do some research [irrelevant insult deleted].. the native people of canada do NOTHING BUT BENEFIT from the mines in Canada, creating Jobs, building schools and putting millions of dollars through the yellowknife economy due to trade laws that state the amount of Aboriginal workers and rules that all materials purchased must come from yellowknife and local lsources. The remote regions of Canada where the mines are are completley uninhabited.

Diamond mines in Canada are operated under the strictest environmental laws in the world, ensuring there is ZERO impact to the environment outside of the site

[irrelevant insult deleted].

 
At 11:23 AM, Anonymous nanteske@mac.com said...

What a load of CRAP!

"Diamond Miners are Disproportionately Exposed to HIV/AIDS" Are you kidding me?? So their employers are forcing them to have unprotected sex?

[ad hominem attack deleted]

By the way, engagement have been around far more than 63 years. Check your facts; the first recorded incidence of a diamond engagement ring was that given to Mary of Burgundy by the Archduke Maximilian of Hamburg in 1477.

 
At 11:30 AM, Blogger jte said...

Nanteske, I don't see how one ring given by the Archduke in 1477 invalidates Liz's description. To quote Wikipedia, which may have been your source as well: "The first recorded diamond engagement ring was presented by the Archduke Maximillian of Austria to Mary of Burgundy as a betrothal gift in 1477. However, the diamond engagement ring did not become the standard it is considered today until after an extensive marketing campaign by De Beers in the middle of the 20th century."

 
At 11:48 AM, Blogger jte said...

In response to Tim: my older brother and sister-in-law
actually work for the native diamond company in Nunavut Territory, and my impression through them is that Canadian diamonds are mined responsibly (to their knowledge--they work in the prospecting end of the business, not on site at existing mines).

Now, I doubt that they'd say that the diamond industry in Canada is
exclusively 100% positive in its impact, and I think you are wrong
that all the mining takes place in uninhabited regions, also, "zero
impact on the environment" is something I find hard to believe, but in general I think you are right that Canadian diamonds are not something to worry about nearly as much as diamonds from other parts of the world.

However, please realize that when the article was written (five years
ago) it was not as easy as it is today for a customer to choose a
Canadian diamond that could be trusted to be free of the problems that have plagued the industry in the 20th century. It is only in these past few years that there has been awareness of the problems of diamonds among merchants and customers, and the development of the marketing chanels that allow a customer to trust that they are getting a good diamond. In fact, I think it is critical articles like Liz's that have helped to embarass the industry into doing things to clean up its act. And frankly, I think most people who buy diamonds today still have no idea that there are problems with some diamonds, and make no effort to seek out the better ones, like the Canadian ones.

By the way, just because Canada has strict environmental laws on its books doesn't mean that aboriginal peoples and their lands are always protected properly. See the debate over the Northgate Minerals Corporation's proposed 'Kemess North' mine. It's not a diamond mine, but it does suggest that money and influence can get in the way of environmental and human protection even in Glorious Canada. Here's another example taken from the Turtle Island discussion board on Protecting Mother Earth and Natural Resources.

 
At 8:27 AM, Anonymous vinay b. said...

This is my feedback to
Econ-Atrocity Bulletin: Ten Reasons Why You Should Never Accept a Diamond Ring from Anyone, Under Any Circumstances, Even If They Really Want to Give You One (2/14/02)
By Liz Stanton, CPE Staff Economist

Although I support most of your issues, I am somewhat against 3. "Diamonds Have No Resale or Investment Value."

Although it is true for most cases, it is certainly not true in my case. I have been working for the past four years in my father's jewellery firm. Its is one of the highly respected and reputed jewellery firms in India. We have an exchange policy unlike most other jewellers. In my limited experience, I have seen our customers exchanging diamonds sold by us, being as cheap as $2 to as expensive as $100,000, for stones of a higher value countless times. We deduct only 6-8%(being our profit) from the existing increased market value of their diamonds and either hand over cash, or adjust the value in their next purchase.

(For example, say in 2000 you bought a diamond of $1000. In 2002 you want to buy a larger stone worth $2000. If the value of the $1000 stone is 1500, he gets to pay $590 only) This is however, only in cases older than 6 to 8 months. Before that, we don't deduct anything.

More importantly, we provide a facility seconded by none, i.e. we offer the client's full money back to her is she is not satisfied of the worth of our diamonds.

Hope this will help.

 
At 2:54 PM, Anonymous Nanlouise said...

A friend recently forwarded me the page Ten Reasons Why You Should Never Accept a Diamond Ring from Anyone, Under Any Circumstances, Even If They Really Want to Give You One which is overall excellent. But I disagree with the title. These are reasons to never accept a NEW diamond. But clearly the only positive current value is sentimental -- thus RE-USE of diamonds already in existence (such as having belonged to a grandmother or such) seems reasonable to me. Am I off-base?

 
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