Are you saving up to buy the perfect diamond engagement ring for the lady of your dreams? Well, you might want to find another way to show your devotion.
As it turns out, the diamond engagement ring tradition is a cultural sham invented by the marketing team at De Beers. Diamonds aren’t as rare or valuable as we’ve been lead to believe.
A little advertising history lesson actually shows that De Beers hired a Don Draper-esque ad man to help them revitalize the diamond industry, which was seriously flagging after the Great Depression. The campaign worked so well that the world has come to view diamonds as an indication of status, wealth, and even love.
But you and your bride-to-be will be better off if you can see past the glitz and glamor. Here’s why you should dump the diamonds:
A Little Thing Called Intrinsic Value
The main reason why diamonds are such a scam is because of their “intrinsic value.” This means that the actual diamonds aren’t worth very much on their own — they’re just shiny rocks we consider valuable because of artificial qualities like perceived scarcity and markup.
But despite the high price tag, diamonds are actually depreciating assets. As the Priceonomics blog further elaborates:
“An asset’s value is essentially driven by the (discounted) value of the future cash that asset will generate.”
The moment you leave a store with your shiny, new diamond, you’ve already lost more than half its value. This is because diamonds are sold at a whopping 100% to 200% markup.
Additionally, the diamond market isn’t fluid. The markup means that no retailer is ever going to buy a diamond back from you, and the static market means that there’s no way to expect that anybody else would pay as much as you did for a diamond you bought at a jeweler.
Advertising Strikes Again
Perhaps the most fascinating aspect of diamonds, and their popular allure as engagement rings, is the fact that this “magical moment” for lovers was invented by an advertising agency.
After the Great Depression, diamond moguls De Beers was struggling.
In fact, the entire industry was flagging, which is how De Beers was able to buy up nearly all the diamond mines. They bought all the diamonds from the mines they didn’t own, and as such were able to tightly control the diamond industry.
Diamonds aren’t expensive, nor are they actually rare. They’re neither. De Beers simply maintains a stranglehold on the supply.
Once De Beers controlled the majority of the diamond supply, they enlisted a Madison Avenue advertising agency to convince everybody that a bigger diamond equates to more wealth, and even more love.
Hype Creates a Tradition
De Beers worked hard to make to convince everyone that diamonds were the way to show that you were a wealthy, successful individual, and that you were loved to boot. They got celebrities and fashion designers in on the scheme, and before long the entire world was going diamond-crazy.
It worked. Before the late 1930s, diamond engagement rings weren’t a tradition. Now they’re the norm no matter where you go, and nobody can seem to remember a time when this wasn’t so.
As it turns out, though, this tradition is really just the brainchild of some clever marketing executives.
What Do You Think?
Do you think diamonds are a scam or do you still value your jewelry? Share your thoughts in the comments.
See Also
Are Herbal Supplements a Scam? New DNA Evidence Exposes Natural Pills
The Truth About “Made in the USA” Labels
Vintage Wine Goes Sour: French Police Bust Huge Counterfeit Wine Operation
I wonder how many people are going to the fake diamonds because of this? I love the bling from showing horses and all the cystals and stones on the belts and clothes. there is even a wedding ring maker of Western rings with the fake diamonds in them and they are beautiful.
I agree that diamonds are a scam and a complete waste of time. I have two beautiful rings which are actually fake diamonds that even an expert can tell apart from the “real” thing. They cost a small fraction of a diamond and look absolutely gorgeous and no-one can tell the difference.
My above post should read “even an expert CANNOT tell part”
A few half turths in this article.
I sell diamonds, they All have value even to ugly ones. Over all
They only go up in value if u look at it as a long term investment.
The bigger ones are rare by nature, the fancy colored ones and the colorless ones are also rare by nature.
Every year records are broken on amounts paid for diamond on auction (like Christie’s And the such) by the wealthies and most informed and educated Elite of the globe
Many diamond jewelry items are created by skilled craftsman and artist, just like oil paintings, high end handmade rugs.
Just like anything else there is only value if society appreciates the item and is willing to pay for it.
Thanks to the internet there is no huge markup on diamonds , just like most any other commodity.
I can tell fakes from a distance , and if I act like I can’t tell it’s only because I want to offend anyone.
I love diamonds, I think they look great and nothing to this day can substitute for a high end diamond Jewelry item.
Nothing in the world really has monetary value unless someone else is willing to pay for it. And as long as there are people in the world that have an appreciation for good quality diamonds their value Will always be. So far have kept their value better than virtually anything else for the course of history.