Aren't Sharks' Teeth Forever? How The Diamond Cartel Turned Worthless Rocks Into Priceless Gems

The 5 inch fossilized tooth above is from a giant prehistoric megalodon shark, which lived between 2 to 25 million years ago, and then went extinct. Megalodon sharks are likely the largest predatory fish to have ever lived. The megalodon tooth above just sold on Ebay for $560.

If fossilized sharks' teeth last for 25 million years, some showing almost no signs of wear like the one above, I think it would be pretty safe to say that "sharks' teeth are forever," just like diamonds.

But unlike sharks' teeth, which are bought and sold according to market conditions of supply and demand on Ebay, the supply and sale of diamonds is tightly controlled by the DeBeers Diamond cartel. Edward Jay Epstein, wrote in this 1982 Atlantic article "The Marketing of Diamonds: How a Successful Cartel Turned a Worthless Rock into a Priceless Gem":

De Beers proved to be the most successful cartel arrangement in the annals of modern commerce. While other commodities, such as gold, silver, copper, rubber, and grains, fluctuate wildly in response to economic conditions of supply and demand, diamonds have continued, with few exceptions, to advance upward in price every year since the Depression.

The diamond invention is far more than a monopoly for fixing diamond prices; it is a mechanism for converting tiny crystals of carbon into universally recognized tokens of wealth, power, and romance. To achieve this goal, De Beers had to control demand as well as supply. Both women and men had to be made to perceive diamonds not as marketable precious stones but as an inseparable part of courtship and married life. To stabilize the market, De Beers had to endow these stones with a sentiment that would inhibit the public from ever reselling them. The illusion had to be created that diamonds were forever — "forever" in the sense that they should never be resold.

Convincing people that diamonds last forever and should never be resold reinforces DeBeers' monopoly power and helps the cartel restrict the supply of diamonds by keeping diamonds off the secondary market.

The article points out that diamond prices collapsed worldwide during the Great Depression, followed by World War II, which further depressed the diamond market until the mid-1940s. Following WWII, De Beers needed a new slogan for diamonds, to help revitalize the demand. It was in the late 1940s that:

A marketing copywriter came up with the caption "A Diamond Is Forever," which was scrawled on the bottom of a picture of 2 young lovers on a honeymoon. Even though diamonds can in fact be shattered, chipped, discolored, or incinerated to ash, the concept of eternity perfectly captured the magical qualities that the advertising agency wanted to attribute to diamonds. Within a year, "A Diamond Is Forever" became the official motto of DeBeers.

"A Diamond Is Forever" has to be one of the most successful and clever marketing scams in the history of commerce. After all, it's not just diamonds that are forever: isn't a shark's tooth forever, isn't a plain rock forever, isn't an emerald forever, aren't the coins in your pockets forever, aren't thousands of museums around the world filled with stuff that has lasted almost forever? And as Epstein points out, diamonds aren't really forever anyway - they can be shattered, chipped, etc.

Buy Recommendation: Consider cultured laboratory-grown diamonds from Gemesis, and avoid the DeBeers diamond cartel.