Tuesday, December 27, 2011

Diamonds, Cocaine and Coffee

1. The Incredible Story Of De Beers Diamonds: How It Created And Lost The World's Most Powerful and Longest-Lasting Monopoly in History 
(HT: Craig Newmark)

2. FOLLOWING THE COCAINE TRAIL: How The White Powder Gets Into American Hands


At 12/27/2011 11:40 AM, Blogger morganovich said...

i found this quote from the diamonds article to be really funny:

"But the diamond rush that began in South Africa in the second half of the 19th century flooded the market with diamonds, which, as any good businessman knows, kills demand."

um, no. it drops price, which dramatically increases demand. this seems like a pretty glaring error to make it through editing and a sad statement about the economic literacy of journalists.

At 12/27/2011 12:27 PM, Blogger Benjamin Cole said...

I agree with Morgan, but with this caveat: You can't sell cheap perfume.

It may have been that if diamonds became cheap, then became commonplace, and thus lost their allure, and then were a passing fad for a while. You couldn't give them away.

So Morgan could be wrong, as he lacks the ability to see nuances in which reality trumps theory.

For myself, I never understood the allure of diamonds, or any baubles, including gold. The allure of such gimcrackery shows the malleable nature of consumer demand.

Remember what my grandfather said, "All gold is fool's gold."

Wise words indeed.

At 12/27/2011 12:31 PM, Blogger morganovich said...


they never got so cheap as to lose allure.

instead, they became a common engagement gift as opposed to one for robber barons only.

to speak of nuance trumping theory while completely ignoring the facts seems like a pretty specious argument. it seems like you are the one unable to see the reality.

sure, there is reverse price discrimination in some segments, but your perfume example is also wrong.

cheap perfume by far outsells chanel number 5.


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