In A Nutshell
One diamond cartel, De Beers, has artificially driven up the price of diamonds for decades. A 1920s advertising campaign set a cultural expectation of diamonds as an expression of love that has endured since, and their scarcity is an illusion—emeralds, rubies, and sapphires are all more rare than diamonds (and much cheaper).
The Whole Bushel
When gigantic reserves of diamonds were discovered in South Africa in the mid-19th century, two things happened. Diamond mining took off, and there was a sudden flood of diamonds on the market. Before that time, diamonds were rare indeed. But this hasn’t been the case for well over a century, so why are diamonds so expensive?
The short answer is, they’re expensive because we expect them to be—because we’ll pay inflated prices for a stone that’s far more common than the price suggests. This is because of the most ingenious marketing strategy of all time, employed on behalf of De Beers Consolidated Mines, which controlled 90 percent of all diamond production on the planet by the turn of the century. The N.W. Ayer advertising agency devised the campaign in 1947 based around a simple tagline which you may have heard: “A Diamond Is Forever.” The agency recognized that there would be resistance, especially among lower-income groups, to essentially being forced to buy an absurdly expensive rock in order to get married. “It is essential,” they therefore argued, “that these pressures be met by the constant publicity to show that only the diamond is everywhere accepted and recognized as the symbol of betrothal.”
Obviously, the strategy worked and continues to work to this day. The desired size and cut of the stone, the “three months’ salary” guideline—all a result of a marketing campaign that’s over half a century old. Diamonds are only crystallized carbonite, after all—one of the most abundant substances in the universe—and far less expensive stones, like your run-of the-mill emeralds, sapphires, and rubies, are actually more rare than diamonds are.