Diamonds and the 80th Oscars
02/28/2008 by Connie Veneracion · Filed under Sassy Lawyer
Full text of today’s column, “Diamonds and the 80th Oscars”
I was busy writing last Tuesday’s column when the 80th Oscars went on the air. I heard snatches of the ceremony but completely missed the Red Carpet prelude. I went to the Oscar Web site yesterday and took a glimpse. Below are some descriptions:
“Nominee Marion Cotillard in a Jean Paul Gaultier mermaid-inspired gown with Chopard jewelry, including a champagne necklace layered with brown diamond bead necklaces and a square-cut yellow diamond ring.
“Jennifer Garner on the red carpet in Oscar de la Renta and Van Cleef & Arpels vintage necklace, earrings, bracelet and rings.
“Anne Hathaway on the red carpet in a red Marchesa gown with rose detailed one-shoulder strap. Diamonds from Harry Winston.”
We all like to ogle at the gowns, the jewelry and the glamour. Few bother to question the relevance of televising the Red Carpet parade when the event is about honoring the previous year’s achievements in filmmaking. At the outset, it might look like one of those tacky media gimmicks of feeding the public with fantasies. You know, an escape from the daily grind. But there was a time when movies, television, radio, newspapers and magazines played host to the brainwashing of the public. Whether it still goes on to this day is something you’ll have to think about by the time you finish reading this column.
In 2003, I came across a 1981 article in The Atlantic about De Beers and its “A Diamond is Forever” campaign. The seven-page article was written by Edward Jay Epstein, an American investigative journalist, and it traces the history of De Beers as a cartel designed to control the supply, demand and prices of diamonds globally. A more detailed discussion can be found in Epstein’s cyberbook, The Diamond Invention. I posted a Web log entry based on the Atlantic article back in 2003, the controversy crossed my mind occasionally over the years, not seriously enough to make me want to dump my modest diamond collection but nevertheless enough to stop me from accumulating any additional pieces of jewelry.
It all started with the discovery of diamonds in South Africa in the 19th century. Prior to that, diamonds were found only in India and Brazil when world production was a mere few pounds a year. Then, the diamond mines in South Africa were discovered. The problem was obvious. Supply had risen tremendously, diamonds could no longer be considered rare and, therefore, following the law of supply and demand, diamond prices would have dropped unless both supply and demand were controlled.
The first step was to create a cartel that would own a monopoly on the diamond industry. The second was to trickle diamond supply to prevent inundation of the market. The third was to create a constant demand. The fourth, and this was real tricky, was to keep the prices of diamond up, free from normal market fluctuations.
A cartel, De Beers, was created and it formed layers of subsidiaries that controlled every operation in the diamond industry from the mining to the cutting to supplying the market. The campaign to create a constant demand and how this campaign successfully kept the prices of diamonds constant despite recessions and inflations is the interesting part. This is where events like the Oscars Awards Night and the Red Carpet show become relevant.
Following the Depression in Europe, diamond prices dropped. In 1938, De Beers hired the American advertising agency N. W. Ayers and launched a campaign that would span decades, reshape cultural traditions and ensure that De Beers diamonds would always remain valuable. The campaign gave birth to the slogan “A diamond is forever.” The goal was to associate the diamond with romance, label it as a gift of love and inculcate in the public mind that the larger the diamond, the greater the love. Epstein wrote:
“Movie idols, the paragons of romance for the mass audience, would be given diamonds to use as their symbols of indestructible love. In addition, the agency suggested offering stories and society photographs to selected magazines and newspapers which would reinforce the link between diamonds and romance. Stories would stress the size of diamonds that celebrities presented to their loved ones, and photographs would conspicuously show the glittering stone on the hand of a well-known woman.”
In addition to the media campaign, Ayers sent lecturers to high schools across the United States to teach young girls about the diamond engagement ring. Meanwhile, the society pages of newspapers continued to display pictures of socialites and celebrities conspicuously displaying their engagement rings. After saturating the American market, the campaign crossed the ocean and targeted the Japanese. By the end of the 1970s, De Beers had a lucrative Japanese market.
When diamonds were discovered in Russia, again threatening to upset the carefully orchestrated stage that maintained the balance between supply, demand and prices, the campaign took another direction. The previous emphasis was placed on the size of diamonds but that wouldn’t work with the much smaller Russian diamonds. Hence, the emphasis shifted to quality, color and cut. The eternity ring was born. The targets this time were no longer marriageable young women but older women and the theme was recaptured love.
To prevent the drop in prices despite the constant supply of diamonds, the public was taught never to part with their diamonds. The trick was to make diamond owners believe that diamonds are safe investments and worth keeping and accumulating. Epstein cites researches conducted by the British magazine Money Which? Gem-quality diamonds were purchased to find out how the value would appreciate. The conclusion: Diamonds weren’t good investments. They couldn’t even be sold at a profit. In fact, diamonds could only be sold at a loss.
Even private individuals who tried to sell their diamond jewelry had the same experience. Try it yourself and find out. As far as I know, the only way to sell diamonds at a profit is to sell them to a private individual who have no real knowledge of their intrinsic value but who assesses their worth based on what he or she reads in glossy magazines, emphasized with photos such as those we see in the Oscar’s Red Carpet show.
Oh, yes, the brainwashing goes on. But it is no longer a tactic exclusive to De Beers. Fashion designers, jewelry designers and shoemakers are into it too. Media, movies, celebrities and socialites are still very much part of it. Come to think of it, the Ayers strategy from long ago–the trick associating totally unrelated things such as diamonds and romance–is even being utilized today by fast food chains, cosmetics manufacturers and even makers of infant milk formula.
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