Up until 1957, the diamond industry was a powerful monopoly built on persuasive advertising, exploitation of labor, and some dodgy policies.

Today, the diamond industry is a much cleaner act; their classic appeal keeps diamonds in the running as one of the most coveted gemstones in the world. But there’s a darker side to the diamond monopoly most people don’t know.

How did this industry get so big and what happened to catapult these shimmering stones from obscurity to the celebrity status they hold today?

Building an empire

In 1888, Cecil Rhodes founded what would become the most prolific diamond mining company in history.

As the founder of the British South Africa Company, Rhodes got his start in the business by renting water pumps to miners in South Africa in the 1860s. Over time, he collected the deeds to several diamond mines before eventually merging them with those owned by Barney Barnato to form the De Beers Consolidated Mines.

Following the merger, Rhodes became the sole owner of all of the diamond mines in South Africa. In 1889, Rhodes made a deal with the Diamond Syndicate in London to sell a fixed quantity of diamonds at an agreed-upon rate.

Their agreement set into place the regulation of diamonds in circulation and the price at which they were to be valued.

Encyclopedia Brittanica

The discovery of large diamonds in newer mines in South Africa prompted Rhodes to pursue the sites.

The Premier Mine, where the Cullinan Diamond was discovered, refused to join De Beers. Instead, they began selling to two independent dealers, Bernhard and Ernest Oppenheimer. Ernest Oppenheimer’s deal with the Premier Mine launched his success, eventually landing him the position of local agent for the London Syndicate.

By the early 1900s, Oppenheimer became the mayor of Kimberley, South Africa. He spent the next decade investing in shares of De Beers, and in 1926, Ernest Oppenheimer was elected to the board.

When Rhodes died in 1902, De Beers controlled 90% of the global diamond production. In 1929, Oppenheimer took over as chairman of the company and began revolutionizing the diamond industry, for better or worse.

Feeding an industry

Oppenheimer’s newfound diamond monopoly left the industry and its economics open to his influence.

As a shrewd businessman with a keen drive to protect his interests, Oppenheimer began to take the ebb and flow of the market into his own hands, creating a shortage of diamonds. The apparent scarcity of the luxury commodity drove up demand for what was left to purchase. With the increase in demand, sellers were able to ask a much higher price for the gemstones.

Paired with the timeless slogan: “A Diamond is Forever,” Oppenheimer’s diamond empire exploded.

Diamond jewelry, particularly rings, became the new must-have item for anyone looking to express the value and depth of their love to their partner. With any other stone, that affection could be seen as less valuable, but with diamonds, the hardest and most beautiful jewel of them all, what was there to question?

As a result, the industry boomed, and Oppenheimer sat at the head of it, blazing an entrepreneurial trail like no other.

During this marketing craze, the diamond engagement ring rose to prominence.

Previously, wedding bands were the only rings exchanged by married couples, if any were given at all. By tying diamonds into the ideals of success and wealth, young men were encouraged to buy their sweethearts diamond engagement rings to profess their love and ask for their hand in marriage.

The rule of thumb eventually became that a man should spend two months of his salary on a ring, making engagement rings not only statements of love but indicators of wealth and success.

However, with most people getting engaged just once in their lives, diamond merchants needed another reason for people to buy their gems. Other successful campaigns included the eternity band, which was meant to symbolize everlasting love, the trilogy ring, which was intended to represent the past, present, and future of a relationship, and the right-hand ring, which was marketed to independent women who wished to buy themselves something nice.

The end of an era

As the 20th century wore on, awareness surrounding blood diamonds and the manipulation of the masses into purchasing expensive stones for sentimental occasions began to backfire on De Beers and the diamond empire.

By the year 2000, De Beers stopped selling diamonds purchased from other mines and sold only their own products. Their movement to save face came too late in the game. By the turn of the 21st century, De Beers had already gained an incredibly unsavory reputation, most of which came about under Oppenheimer’s control of the company. During World War II, he restricted the United States military’s access to diamonds, which stunted a multitude of industrial developments.

Ernest Oppenheimer’s son, Harry, took control of the company in 1957, following his father’s death.

Much of the recent controversy De Beers has experienced stems from Harry’s choice to purchase diamonds from warring areas in South Africa, which provided money to the insurgent groups during the apartheid. These diamonds, called blood diamonds, quickly gained an active and unhappy following once the news of their origins became public.

Diamond sales plummeted, and the company was forced to reorganize its business approach to avoid any further negative publicity.

Now, in 2019, De Beers no longer holds a monopoly. They sell only their own products, and last year, they announced the release of a new line of synthetic diamonds, which will carry a market price one-tenth that of natural diamonds.

The market lives on, but the diamond industry we know today is nothing like what existed even 50 years ago.