‘That sparkle, though!’
‘Erm... worthless rock?’

Ever tried telling someone their diamond ring is worthless? If you did, you’d know of the dagger-glares and barrage of insults that follow. The intensity and creativity of these attacks vary, but they all centre around the same premise: “How dare you? You must be stupid to say something like that.”

They might start with, ‘Do you know how much I spent on this?’ It isn’t surprising that diamonds mean a lot to their owners. Just consider the amount they paid for it!

On the flipside...

‘Diamonds are intrinsically worthless, they aren’t even rare. The reason they’re valued is purely because of an extremely successful advertising campaign by the De Beers corporation in the 40’s. You shouldn’t have wasted so much money on something worthless!’ If you’ve heard this before, you’ve met one of them.

They’re the new breed of ‘diamond-haters’. Spurred with the desire to turn their nose up on diamond-owners, and armed with knowledge gained from a Facebook video or that episode of Adam Ruins Everything. But as obnoxious as these haters can be, we should consider if there’s something to what they’re saying.

Are you spending your hard-earned cash on something worthless? Are you selling that arm and leg so you can hobble about, grinning with a tiny ‘worthless’ rock in your hand? Are diamonds, indeed, overpriced—or (gasp)worthless?

The History of Diamond Production

Despite what the haters would have you believe, diamonds have a long history as objects of great beauty and desire. From the diamonds gathered in India’s rivers and streams during the fourth century BC, to the those traded in Venice’s medieval markets, diamonds have long been valued by many cultures around the globe.

But we mustn’t discount the impact of the De Beers corporation on the diamond industry— for it is indeed significant. One could even go so far as to say that the De Beers corporation revolutionised the diamond industry, both in the scale of diamond production and in shaping modern perceptions of the diamond as an essential aspect to a wedding engagement and a symbol of enduring, romantic love.

By 1990, the corporation exploited the diamond mines of Africa and firmly established a global monopoly on diamond production. But it is their work with ad agency, N.W. Ayer that changed the industry forever.

The Ad Campaign That Changed It All

Diamond-owner: ‘It may be expensive, but it’s worth it because ‘a diamond is forever’.’ ‘A diamond is forever’. The old adage rings with a familiarity akin to tradition. Like ‘an apple a day keeps the doctor away’ or ‘the early bird catches the worm’, one gets the feeling that this has always been true—like folk wisdom handed down through generations.

This is where the diamond-haters pounce in to point out that the phrase and idea was a relatively new one, and nothing but a product of a wildly successful advertising campaign by De Beers and N.W. Ayer in 1947.

To illustrate the magnitude of the campaign’s success:
Before the Second World War, only about 10% of engagement rings in the U.S. were diamond rings. Within three years of the campaign, the number increased by 55%. By 1990, 80% of engagement rings in the U.S. were diamond rings.

The ubiquity of the phrase is a testament to the effectiveness of the campaign for not only did it turn a $23 million industry to a $2.1 billion one in a span of 4 decades, it deeply ingrained an idea that remains pervasive in our collective consciousness today.

Intrinsic Value

Diamond owner: ‘Okay, so what if the De Beers corporation manipulates the supply and demand of diamonds? Why should I care?’ Diamond-hater: ‘Because diamonds are intrinsically worthless! You’re spending a lot of money on something that has no intrinsic value! Blah blah blah ...’

Before you start smashing your monitor/phone in anger or crying in the shower with a bottle of Chardonnay, let me explain why I think this argument is fallacious. It is true that diamonds do not have much ‘intrinsic’ value. But does that mean it is worthless? I believe you wouldn’t have to think very hard to realise that a lot of what we value does not have much ‘intrinsic’ value. Let’s consider the money in your wallet/bank.

Historically, currencies were based on a physical commodity like gold. Money functioned like a contract that allows the owner to claim an amount of that commodity. However, this standard was abolished with the introduction of fiat currency.

Fiat currency is currency that is not linked to a commodity. This essentially allows governments to print and mint money freely at the risk of inflating the currency. The value of such currency is backed by the people’s faith in the currency, i.e. the value depends on the demand for the currency and not the material in which it is made or the value of a corresponding commodity.

The value of a diamond works similarly to that of fiat currency. It is valuable in so far as people are still willing to pay a lot of money for it. So unless you’re preparing for a zombie apocalypse, I wouldn’t worry too much.

*But if you are, I’d advise trading all of those soon-to-be-intrinsically-worthless paper (money) to stock up on canned foods and weaponry. And if you’re unable to flip your diamonds in time for the apocalypse, at least you could be that badass swinging a diamond-studded baseball bat at the zombies.

Subjectivity of Value

Diamond-owner: ‘So... ARE diamonds worthless?’

Calm down, dear diamond-owner. Turn off your shower and put back that bottle of Chardonnay (or not, what I’m about to tell you might give you cause to open it in celebration). The diamond industry has indeed been greatly manipulated by the De Beers corporation, but the De Beers corporation today is very different from what it was in the past. Their monopoly has now been broken up and diamonds now enter the market through multiple channels. Pricing and supply are now regulated by authorities rather than manipulated by corporations.

And diamonds today generally hold their value depending, of course, on their demand. So go ahead and spend on that bling if you wish, unless you’re fearing an impending apocalypse. And of course, let’s not discount the emotional value of a diamond. A diamond is more than just its financial value; it can function as a symbol for something meaningful or hold sentimental value. As this is highly personal and thus subjective, the value of a diamond really depends on what it means to the individual.

So just because a diamond is expensive, doesn’t mean that it is overpriced, and just because it is cheap does not mean it's not valuable to the owner. And if knowing about the history of the De Beers corporation’s influence on the industry taints your perception of diamonds, feel free to go for a different type of ring. There’s no set of rules that dictates what you should pay for an diamond ring.

An engagement ring is a once-in-a-lifetime gift to someone special. Don’t fret too much about the price, for it shouldn’t be something that brings you anxiety or makes you broke. Rather, it should be a loving celebration and reminder of your union. Search your heart, pay a price you’re comfortable with and get the ring that expresses your feelings for the person; whether it’s a 5-carat diamond ring—or an onion ring.