Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
The positive and negative impacts of diamonds
Diamond industry economic impact
How de beers became a diamond company
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: The positive and negative impacts of diamonds
People have different ways of valuing a diamond. Some people look at the sentimental value, and some people consider the price of diamonds in their valuation process. So is it fair to say that the price of diamonds is too high? In this essay I will be discussing the validity of this statement with reference to the market of the diamond industry, the diamond cartel, how the price of diamonds is set, and the implications thereof.
Before I analyse the topic, I shall discuss the history of the diamond cartel. “A cartel is a group of firms acting together…to limit output, raise prices, and increase economic profit.” (Parkin, 2013, p. 312) The diamond cartel formed around the period when diamonds were discovered in South Africa. Cecil Rhodes had organized the mining operations and land claims in South Africa and had started to form the diamond cartel that is mainly controlled by his company, De Beers. (Spar, 2006:197) The cartel was formed as a result of a demand-supply problem due to the discovery in South Africa. The supply of diamonds had increased and this had an adverse effect on the scarcity of diamonds. Since diamonds had become more readily available, the diamonds had lost its value, whether it is the sentimental or monetary value. By looking at the graph below we can have an idea of what had happened to the price and value of diamonds.
The increase in the supply of diamonds as a result of the discovery, as seen in the rightward shift of the supply graphs above, had resulted in a decrease in the price of diamonds, ceteris paribus. Since diamonds had become more readily available, as a result of lower prices and greater quantity, it had lost its “association with romance and luxury” (Spar, 2006:198), resulting in a decrease...
... middle of paper ...
... for De Beers to have had control of the diamond industry, “[they] had to control demand as well as supply”. (Epstein, 1982:1)
References
Epstein, E. J. (1982) 'Have you ever tried to sell a diamond?' Atlantic Monthly, 23 Available at: http://cdn.preterhuman.net/texts/religion.occult.new_age/occult.conspiracy.and.related/The%20Atlantic%20-%20Have%20You%20Ever%20Tried%20to%20Sell%20a%20Diamond.pdf [Accessed: 2014, April 9].
Lerner, A. P. (1934) 'The Concept of Monopoly and the Measurement of Monopoly Power' The Review of Economic Studies, 1 (3), p. 157. Available at: http://www.jstor.org.ezproxy.uct.ac.za/stable/pdfplus/2967480.pdf?&acceptTC=true&jpdConfirm=true [Accessed: 2014, April 7].
Parkin, M. (2013) Economics. 5th ed. Cape Town: Pearson Education South Africa.
Spar, D. L. (2006) 'The Journal of economic perspectives' 20 (3), pp. 195-208.
A monopoly exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. A monopoly sells a good for which there is no close substitute. The absence of substitutes makes the demand for the good relatively inelastic thereby enabling monopolies to extract positive profits. It is this monopolizing of drug and process patents that has consumer advocates up in arms. The granting of exclusive rights to pharmacuetical companies over clinical a...
Valuing a diamond is a highly skilled task thus not traded on world frequently. (Valued on the basis of four criteria- 4C s carat clarity color and cut)
The CFDC will continue to campaign and inform people on how to make sure that their purchase is conflict free and to gain support from the diamond trade in educating consumers. With the help of these organizations and many others, it will help save the lives of millions from violence or death. Works Cited The Conflict-Free Diamond Council. 2004.
To begin with, Maupassant displayed the necklace as everything that Mathilde had ever desired. The necklace was “…superb…and [Mathilde’s] heart throbbed with desire for it” (Maupassant 6). Mathilde had her choice of “…bracelets,…a pearl necklace,…a Venetian cross of finely worked gold and gems” (Maupassant 6), but instead she chose to take the most expensive and finest looking bauble in her friend’s jewel box. The diamond necklace revealed to the reader that Mathilde no only wanted the finest things, but she also wanted the most luxurious and expensive ones to be...
It’s hard to imagine that a mineral could be fueling wars and funding corrupt governments. This mineral can be smuggled undetected across countries in a coat pocket, then be sold for vast amounts of money. This mineral is used in power tools, parts of x-ray machines, and microchips but mostly jewelry. Once considered the ultimate symbol of love, the diamond has a darker story. "Blood" diamonds or "conflict" diamonds are those mined, polished, or traded in areas of the world where the rule of law does not exist. They often originate in war-torn countries like Liberia, Sierra Leone, Angola, and Côte d'Ivoire were rebels use these gems to fund genocide or other questionable objectives. Even with a system known as the Kimberly process which tracks diamonds to prevent trade of these illicit gems, infractions continue as the process is seriously flawed. The continuation of the blood diamond trade is inhuman, and unethical, and in order to cease this illicit trade further action to redefine a conflict diamond, as well as reform to the diamond certification prosess is nessasary.
Deep within African mines, elusive diamonds lay enveloped in the Earth’s crust. Possessing much influence, beauty, and tension, nature’s hardest known substance causes parallel occurrences of unity and destruction on opposite sides of the globe. Diamonds, derived from the Greek word "adamas", meaning invincible, are formed deep within the mantle, and are composed entirely from carbon. Moreover, only under tremendous amounts of heat and pressure can diamonds form into their preliminary crystal state. In fact, diamonds are formed approximately 150km- 200km below the surface and at radical temperatures ranging from 900-1300 C°. When these extremes meet, carbon atoms are forced together creating diamond crystals. Yet how do these gems, ranking a ten on Moh’s hardness scale, impact the individual lives of millions of people besides coaxing a squeal out of brides-to-be? These colorless, yellow, brown, green, blue, reddish, pink, grey and black minerals are gorgeous in their cut state, but how are these otherwise dull gems recognized and harvested? Furthermore, how and why is bloodshed and violence caused over diamonds in Africa, the supplier of approximately 65% of the world’s diamonds? (Bertoni) The environmental, social, and economic impact of harvesting, transporting, and processing diamonds is crucial because contrary to popular belief, much blood has been spilled over first-world “bling”.
Hocking and Waud 1992, `Oligopoly and Market Concentration' in Microeconomics 2nd Edition, Harper Educational Publishers, NSW, pp-315-342.
When the word monopoly is spoken most immediately think of the board game made by Parker Brothers in which each player attempts to purchase all of the property and utilities that are available on the board and drive other players into bankruptcy. Clearly the association between the board game and the definition of the term are literal. The term monopoly is defined as "exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices" (Dictionary.com, 2008). Monopolies were quite common in the early days when businesses had no guidelines whatsoever. When the U.S. Supreme Court stepped into break up the Standard Oil business in the late 1800’s and enacted the Sherman Antitrust Act of 1890 (Wikipedia 2001), it set forth precedent for many cases to be brought up against it for years to come.
Fought over for centuries and claimed by many, the owner of this diamond only yields it to another at the cost of an empire. Believed to have originated from the depths of an ancient Indian mine, the Kohinoor Diamond is a missing link to an illustrious past of a fledgling modern nation. Since its independence, Indians, both in the Republic of India and those who reside throughout the Commonwealth, have demanded the return of the sacred jewel. A demand the British government has continually refused. For the British, the diamond is also a reminder of their renowned past when the sun never set upon their domain. Forever covered in the blood of its past owners, men and nations will continually fight one another, rather with words or war, just for the opportunity to hold the cursed gemstone.
Santarossa, B. (2004, January 13). Diamonds: Adding lustre to the Canadian economy. Retrieved November 06, 2017, from https://www.statcan.gc.ca/pub/11-621-m/11-621-m2004008-eng.htm
In 1785, the court jewelers, Bohmer and Basange, constructed a necklace with five hundred and forty diamonds of varying sizes in an ugly arrangement that resembled the collars worn by circus animals. They hoped that King Louis XV would purchase it for his favorite, Madame du Barry. Unfortunately, the king died before the necklace was completed. So, naturally the jewelers tried to sell the piece to the newly crowned Queen, Marie Antoinette, because she was known for her extravagant spending and taste. They priced the jewelry at and equivalent of two million dollars in modern money. The Queen declined the offer. She did not like the necklace and the price was even too high for her. Knowing that they would be ruined if the Queen didn’t buy their product the jewelers continued to plead with her for ten years. Each time she turned them down. Then, one day the Queen received a note signed by Bassange which said, “We have real satisfaction in thinking that the most beautiful set of diamonds in existence will belong to the greatest and best of Queens.” Puzzled by the message, the Queen, put the note to flame by a candle sitting on a nearby table (Komroff 85).
iii. India dominates the world’s cut and polished diamonds (CPD) market. In value terms, the country accounts for approximately 55 percent of global polished diamond market and nearly 9 percent of the jewellery market. According to GJEPC's provisional estimate, cut and polished diamonds registered 19.06 percent growth in exports at US$ 7.11 mn.
Therefore, to construct a model of monopoly capitalism Paul Sweezy and Paul Baran used to of the degree of monopoly the proposed by Mihał Kalecki concept in Essays in the Theory of Economic Fluctuations (1939) and other later works.
The film marker is trying to raise awareness of the illicit conflict diamond trade and reinforcing the Kimberley process1 and showing how it will stem the flow of conflict diamonds. This is successful mainly due to the public outburst after the movie. The great impact of the movie has caused diamond companies like De Beers2 to start a pre-emptive PR (public relationship) campaign, even before the movie was released to inform people that their diamonds are conflict-free.
A monopoly is “a single firm in control of both industry output and price” (Review of Market Structure, n.d.). It has a high entry and exit barrier and a perceived heterogeneous product. The firm is the sole provider of the product, substitutes for the product are limited, and high barriers are used to dissuade competitors and leads to a single firm being able to ...