
When Diamonds Are Dirt Cheap, Will They Still Dazzle? - wglb
http://www.nytimes.com/2014/04/20/business/when-diamonds-are-dirt-cheap-will-they-still-dazzle.html?action=click&contentCollection=Business%20Day&region=Footer&module=MoreInSection&pgtype=article&_r=1
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ghshephard
The engagement ring is useful when there is an asymmetric relationship in the
earning potential of the proposer and proposee, and simultaneously a potential
irrecoverable cost on the part of the proposee from agreeing to marriage.
(Historically, high wager earner male, and child bearing years female - this
historical antecedent has less relevance in contemporary times) In order to
fulfill their economic role in proposing marriage, the engagement ring (or
whatever token is used) needs to have two properties:

o It needs to be scale ably expensive, that is, there needs to be a way for
someone who is making any range of income to find something that is
"expensive" for them.

o It needs to have little to no resale value.

This allows the potential proposee to ensure that they aren't just one of many
target (it would be expensive for the proposer to offer this token to many
people) demonstrating long term commitment on the part of the proposer, and,
at the same time, protects the proposer from "gold diggers" \- the token,
(e.g. Diamond Ring) - has little to no resale value.

Should Diamonds no longer fulfill that role, then other tokens may arise -
I've often wondered whether expensive / lavish wedding parties could server
this purpose.

~~~
wisty
I don't think women care these days about getting a diamond. They just want
something pretty to show their friends.

50 years ago, it really mattered - a woman who moved in with a man before they
were married was taking a big gamble - she'd lose her reputation if the
marriage fell through.

OK, there's still some asymmetry in relationships, but there's no real
asymmetry in courtship - women aren't really worse off than men for having had
previous relationships.

Kids can be asymmetrical (single mothers and fathers have very different
issues), but if you're talking about kids than a few months salary shouldn't
be a major factor.

~~~
jsmeaton
> I don't think women care these days about getting a diamond.

Unfortunately, most of the women I know do care about getting a real diamond.
Doesn't matter if the grown diamonds will be better quality dollar for dollar
- it's fake and it won't do.

~~~
ryandrake
I think it says something about someone's character when they prefer jewelry
[possibly] mined by a 12-year old slave at gunpoint, at great environmental
cost, over jewelry produced in a lab.

~~~
lostlogin
Unless you get certified ethically mined Canadian diamonds. They are a good
way to get guilt free diamonds (at an even greater premium).

~~~
philwelch
Sustaining a cultural norm that causes children to mine for diamonds at
gunpoint is not "guilt free". Your particular diamond is fungible. Diamonds
should be as taboo as fur coats.

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kcorbitt
This phenomena isn't as novel and modern as the article seems to imply. We see
it in technology all the time -- pocket watches and car phones were both seen
at one point as signs of wealth and exclusivity, but as they became more
affordable that status was lost and other signals take their place. Of course,
it seems unlikely that the human race will all of a sudden lose _all_ desire
to show off how much more we have than others. We'll just collectively find a
new, more exclusive way of expressing it. :) Dr. Suess's book "The Starbelly
Sneeches"[0] comes to mind.

[0]
[http://en.wikipedia.org/wiki/The_Sneetches_and_Other_Stories...](http://en.wikipedia.org/wiki/The_Sneetches_and_Other_Stories#.22The_Sneetches.22)

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tzm
I believe the 'known' maximum size for CVD (synthetic) diamonds is approx
1.5ct, for a round brilliant cut, costing ~$7k. Those that own the technology
are cautiously entering the gem-grade market and have been selling premium
stones to fund their venture. You really can't tell the difference, even with
a refractometer.

Gem cutting predominantly exists within the traditional diamond trading
centers and is an intensive educational process. If a large quantity of
'perfect' rough diamonds hit the market, they will know.

Fwiw, I own a jewelry store and most recently I acquired what I believe is a
CVD diamond.. It's stunningly flawless with a very slight color and a slightly
shallow cut. It weighs in at 2.8ct, which is very puzzling. I sent it to GIA
for certification.

~~~
wyager
Why do people with the technology have to be so cautious?

~~~
tzm
Likely related to price stabilization and its relationship with existing
distribution channels. But, there may be other risk elements associated with
disrupting diamond cartels.

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p1mrx
It seems strange to form an analogy between a manufactured diamond and a
forged painting. A painting is valuable because of the artist who created it,
while a diamond is just another carbon crystal with an unremarkable history.

Aluminum was once more valuable than gold, but the Hall-Héroult process didn't
spawn a market for certificates of authenticity.

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seliger12
Also relevant: Edward Jay Edstein's "Have You Ever Tried to Sell a Diamond"
([http://www.theatlantic.com/magazine/archive/1982/02/have-
you...](http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-
tried-to-sell-a-diamond/304575/)).

~~~
sheetjs
This article has been submitted quite a few times (with interesting
discussions):

[https://news.ycombinator.com/item?id=4535611](https://news.ycombinator.com/item?id=4535611)

[https://news.ycombinator.com/item?id=1405698](https://news.ycombinator.com/item?id=1405698)

[https://news.ycombinator.com/item?id=1110283](https://news.ycombinator.com/item?id=1110283)

search url:
[http://hn.algolia.com/#!/story/forever/prefix/0/have%20you%2...](http://hn.algolia.com/#!/story/forever/prefix/0/have%20you%20ever%20tried%20to%20sell%20a%20diamond)

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rdtsc
As an almost broke student getting a $1k engagement ring for my fiancee (now
wife), looking back, it was one of the worst financial decisions we've made.

After being married for 10 year or so, it doesn't even matter what the ring
was or the type of stone or how much it cost.

~~~
dinkumthinkum
Some people might find getting a $1000 engagement ring a bad decision because
they would get it thrown back in their face. :) Just kidding, but this is very
subjective.

~~~
joelhooks
Hopefully they'd consider this a blessing for uncovering what would surely be
a miserable long-term partner.

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ISL
Silicon Carbide is comparatively cheap (factor ten less than diamond), the
refractive index is greater, and it's almost as hard. I've bought a few
"moissanite" stones as gifts; they're pretty.

Edit: Also, if you've not played with a large cubic zirconia, and you have
$3.60 to spare,
[http://www.esslinger.com/10mmroundpremiumcz.aspx](http://www.esslinger.com/10mmroundpremiumcz.aspx)

~~~
thaumasiotes
I order synthetic rubies and sapphires from pehnec.com (minimum order: $50;
typical lot price: $35-45). They also sell CZ in all different colors, but
again, you have to buy in batches.

Your link is weird... their synthetic gems seem to be mostly simulated. I
could understand that for rarer stones, but why bother to simulate amethyst?
And prices for created stones are bizarrely out of whack:

pehnec 10x12mm oval CZ: $46 for a batch of 25

esslinger 10x12mm oval CZ: $4.35 per

pehnec 7x10mm pear created ruby: $40 for a batch of 50 gems

esslinger 7x10mm pear created ruby: $108 for one gem (?!?!?)

On a more "enthusiast" note, I always bought synthetic rubies and sapphires
for your basic crummy reasons of "genuineness", but I recently bought a batch
of clear CZ as a birthday gift for a teenage girl. She _loved_ it -- and when
she sent me pictures, I had to agree, they look gorgeous.

~~~
ISL
Ooo. Thanks for the link.

~~~
thaumasiotes
Hey, not at all. It's a true pleasure to meet someone who understands the
appeal of loose gemstones (far and away the most common reaction I get when
showing them off is "but what good are those?"... the second most common is
"they look fake").

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llllllllllll
Why don't more intelligent people realize that the whole expensive engagement
ring tradition stupid and ostentatious? I understand the value in signaling to
others that you're married, but no need to spend more than 20$ to do that.

My parents went with simple silver (colored?) bands. I'll do the same or just
nothing at all. My girlfriend couldn't care less about a ring and doesn't want
a formal wedding either... I'd have a hard time being with anyone who felt the
need to constantly show off their status with a shiny rock on their hand.

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bradleyjg
I've been reading about these CVD diamonds for 10 years and still haven't
heard of anyone actually buying one. It's beginning to remind me of commercial
fusion and battery breakthroughs.

~~~
ScottBurson
Back in the late 1980's I got a catalog from a jewelry company that was
selling jewelry with their lab-grown stones, including diamonds of various
colors. I bought a silver ring with one of their sapphires ($100 or so) that
I've worn almost every day since, and a larger loose sapphire that I never did
anything with but still have lying around somewhere.

Van Pler, I think they called themselves. They disappeared without a trace a
couple of years later. I don't know if they used CVD or some other process.

The stones are obviously synthetic -- from the right angle you can see banding
suggesting that the color dopant was added in layers -- but reasonably
attractive nonetheless. In fact, they have a deep, pure blue color the natural
stones don't seem to achieve, at least not for any price I could afford :-)

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vbuterin
As an (armchair) economist, when looking at these cases of Veblen good
consumption one of the things that always interests me is: is there some
clever way to nudge our culture in such a way that the product of such
consumption becomes socially useful? Diamonds have a negative
external/internal benefit ratio, since child labor wars in africa etc,
apartments on the edge of Central Park are neutral (the apartment in not
helping or hurting anyone but yourself, and as per the Veblen good definition
the people you're competing with). But what about Veblen goods with a positive
external/internal benefit ratio? Charity auctions try to do that, and if the
government were to monopolize access to one not-particularly-industrially-
significant mineral and then sell it off at huge markups that would also work,
at least among the subset of the population that believes government spending
has >0 external benefit. I am also aware of the use of large public individual
donations in traditional cultures. The cleanest solution seems to involve
cryptocurrency, but that would only really start to work once everyone is
wearing Google Glass and can, um, efficiently verify the results from a
challenge-response protocol against a long-range RFID inside people's wedding
rings.

~~~
philwelch
Any charitable donation with your name on it is a Veblen good that (hopefully)
becomes socially useful. If people donated out of a genuine sense of charity
they would donate anonymously.

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bigbugbag
Dimaonds seems like a poor choice as they were made artificially scarce to
inflate price in the first place by a monopoly built with this objective in
mind.

Later when diamonds started to lose their appeal in the 30's the monopoly
built an artificial demand for diamond in the US through manipulating minds
(also called advertisement, marketing and propaganda aka public relations)
into associating diamond as symbols of love and commitment creating artificial
demand of diamond engagement rings most known as "a diamond is forever"
campaign. A scheme later exported in other countries.

When major discoveries of diamond were made threatening to lower the market
price, the monopoly bought all the production to hold onto it. When countries
refused to sale they would release a large number of similar diamonds into
market to kill any profit those countries would make.

More recently they settled a class action lawsuit for fixing prices of gem
diamonds and pleaded guilty in another suit about fixing prices of artificial
diamonds.

So diamond dazzling is a total fabrication and diamonds would never have got
expensive without De Beers conspiring to inflate prices.

[http://www.businessinsider.com/history-of-de-
beers-2011-12?o...](http://www.businessinsider.com/history-of-de-
beers-2011-12?op=1)

------
bsder
There have been several companies who did CVD diamonds at gemstone quality.
It's not a terribly hard problem given modern technology.

The problem is the same problem as when the original diamond mines opened. If
you succeed, you flush the value of diamonds straight into the toilet. At
which point, there is no profit.

Consequently, it is always more profitable to sell your technology to DeBeers
and cash out quietly than to enter the diamond market.

~~~
ISL
There's less profit, yes, but you'd halt diamond mining, which may have
important human and environmental gains. Furthermore, it'd help redirect a lot
of money in other directions.

We're all stardust anyway. Perhaps someday that might be enough?

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logicchains
As someone who's married and somehow managed to avoid ever having to buy an
engagement ring, to any fellow cheapskates I highly recommend the use of some
more diplomatic version of the expression "what are you, some kind of
prostitute?".

If somebody's love is conditional on the amount of money you spend on them
then I'd argue that's not the kind of love that leads to a long, satisfying
relationship.

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loup-vaillant
Cheap answer to the "deep" philosophical question: a perfect copy _is_ an
original. This comes from Quantum Mechanics.

So, if we can make perfect copies of physical works of art, they will be come
as abundant as digital works of art. This could have interesting effects on
the very notion of property.

~~~
bigbugbag
This reasoning is flawed. A digital copy resources requirement tends towards
zero, an analog copy requires a certain amount of resources making it
virtually impossible to copy at scale.

Also I can have thousands and thousands digital works of art without requiring
more and more display and storage space, when you have a hundred paintings,
you need a hundred walls to hang them.

~~~
loup-vaillant
Wait 'till we upload ourselves in a simulation.

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known
[https://en.m.wikipedia.org/wiki/Tragedy_of_the_commons](https://en.m.wikipedia.org/wiki/Tragedy_of_the_commons)

