In his third book, ‘Restitution of the Desert’, Markus Helen dedicated a chapter to one of the ‘most intriguing materials in the history of the economy’: diamond.
A material that, even by its cartel’s own admission, has very little practical usage. One estimate put industrial use value on a diamond at $2-30, and yet the sale of approximately two-thousand stones at their sightholder auctions were worth 30 billion.
The value of diamond has survived competition, when Russian state-owned enterprises went private(1), securing the huge Angolan deposits. At first, this seemed a challenge to the de Beers quasi-monopoly but, since the material is only valuable to its appearance of scarcity, the Russians cooperated with de Beers by selling holdings in different territories and drawing lines between their sales.
So, liberal principles could not clear the view of what a diamond was worth. Which is, of course, natural to the liberal principles and thus why they have continued to fail in bringing the transparency they claim to uphold. The liberal economy is supposed to open out everything for its true value but, in truth, economists should know that people enter into competition of a market to get a slice of the pie that exists, or to expand it, with diamond and its total worthlessness there would be no interest in competing unless it was to compound the illusion around its value.
But Helen does not see the failure of the liberal order as a key ingredient to the curiosity of diamond. If anything, he sees it as merely a symptom of the mirage that the liberal economy’s teleology is to provide increasing clarity to the value of things.
What should have instigated the demise of diamond was the introduction of ‘cultured’ diamond. Lab grown and flawless, these stones surpassed the uses of the natural kinds for practical purposes – for tips of tools in fine manufacturing and surgical instruments. Natural diamonds could have natural imperfections that could potentially undermine the integrity of the instrument; and, not to forget a key point, industries such as health organizations or engineering firms knew the cesspit of natural diamonds; and that they were paying far too high a price to cartels like de Beers. The needy for diamonds for practical purposes were overjoyed to be free of the cartels. But the market of natural diamonds was not affected long-term by these competitors. To begin, the ‘cultured’ diamonds were labeled ‘synthetic’ diamonds, a deceptive term for the populace, and beneficial to the standing order of the industry. This semantic labeling originated from the cartels – the FTC had issued a statement insisting that since the materials of the natural and ‘synthetics’ are the same, the stones should be referred to as ‘grown’, ‘created’ or even attributed to the lab that create them. Not that synthetic is untrue with regard to the ‘grown’ products, only that the general populace, thanks to science fiction materials and de Beers’ salespeople are check-pout counters, align ‘synthetic’ along with plastic, cheap, phoney…
Discrediting the cultivated stones was an expected response. However, it was surprising that the value of natural diamond did not fall dramatically over the long term(2). Helen shows that no single product has eluded economic ‘reality’ as effectively as diamond, except for one other product: monarchic institutions. Helen argues that, price for diamond has shown resilience in the face of economic reality because its purveyor prioritized its existence as an institution instead of an industry.
Historically, what product has shown such agility when faced with a reality that should not accept its value anymore? Only the monarchy’s persistent influence can be the model that allows us to see what diamond really means. The existence of these ridiculous people, and the rewards they reap from their mere existence, should be clear as to why there is a product like diamond so high up in our value chain. Where people queue for the opportunity to attend a surgery with their local politician, to be ignored, the monarchy can sit down with its leader – if anything the leader needs to be seen with the monarch for some visual indication of their rise to head of the order. It’s not surprise that the main economic hub for diamond companies was between the UK and the Netherlands – who both continue to trot out their monarchs in their little diamond encrusted hats. The crowns themselves are an utterly laughable icon of power; no one would, even the most fervent monarchist, say that the crown is anything more than a heavy hat; perhaps only our most pessimistic would say that, despite our claims of education, our infatuation with the shiniest headdress is still present in our lizard brains.
Helen moves between the French and Soviet revolutions. How the jewels and artifacts of their monarchs were preserved by those who, supposedly, valued something higher. The revolutionaries manipulated their love for these objects effectively with paintings – by removing the subject of the portrait and focussing on the craftsman who painted it. But diamond itself remained a stone, and to defile the crown, would be to remove any value from the object of hatred.
It’s from the preservation of the crown jewels, and their lofty position of an ideal that we claimed to have moved on from that Helen surmises the true value of diamond. He rejects scarcity, since it was proven that diamond scarcity was only created by a manipulation by the cartels, who enjoyed full control over the extraction and sale.
“from Mine to Mistress” is a phrase used by diamond cartels. The public image is of a diamond stone being the ultimate in love and faith, people are under the belief that to crystallize a marriage, one must have some crystallized carbon (3). Yet the truth is that more mistresses are given diamond than wives. The diamond in its most common use is not a symbol of commitment given, but commitment received – a good mistress stays quiet in the apartment given her, and does not expect to become the wife. Much like the monarchs who continue to bestow titles that should be materially worthless, the diamond is a reward to women for fealty in infidelity.
For now, the market value of diamond continues to stay strong. While technological change has altered the existence for the vast majority of the people on the planet, the diamond continues to be an effective arbiter to the 1%’s ability to maintain an illusion of lustre and power.
… once the diamond’s power and strength was no longer a fact, we were persuaded to believe in the romance of nature, that lab grown diamonds are not ‘divine’. We must ultimately realize that the value we have of these stones is the awareness of the cost of human life on their deliverance to market. However, while people still cower to the descendants of some humanities greatest genocidal maniacs, who are obsessed with this pretty stone as their avatar, the market will continue to be warped.
(1) Putin-flavoured private, meaning there was huge sums of government capital flooded into the enterprise, but its approach to another nation to draw contracts of resource access would be as a private company looking to do business.
(2) the soft drink market is a good example. Pepsi moved to be cheaper during the depression and stole some ground on the Coca-Cola Company. But in the long term they both leveled their pricing and fertilized a competition without losing effective market share. Both companies pedal what is, essentially, a zero-product.
(3) they too believe that diamond is the hardest substance, as a sign of the commitment, despite their being many other elements created synthetically that now surpass the stone.