0:03 Diamonds are seen as symbols of wealth,
0:07 status, and love. But despite what most
0:10 people believe, diamonds are not
0:13 actually rare. And one single company is
0:15 responsible for manipulating the entire
0:19 world into believing otherwise. Debeers
0:21 spent the 20th century pulling the
0:23 strings behind every element of the
0:25 diamond industry. From mining to
0:28 marketing to sales, Debeers controlled
0:31 the diamond trade. And by controlling
0:33 the supply of diamonds, they could
0:35 completely manipulate the
0:38 prices. The beers also pulled off one of
0:41 the most successful marketing cons ever.
0:43 By convincing us all that diamonds are
0:46 much more valuable than they really are,
0:48 and that the only way to show you truly
0:50 love someone is spending several months
0:52 of your salary to buy them a diamond ring.
0:54 ring.
0:57 What may seem like a romantic tradition
0:59 is really an incredible scheme by the diamond
1:00 diamond
1:04 cartel. So today we're going to uncover
1:06 the truth about the brutal business of
1:10 diamonds. From secret syndicates,
1:13 apartheide, price fixing, and blood
1:16 diamonds. This is a story spanning three
1:18 centuries into one of the darkest and
1:21 most manipulative industries of all time.
1:22 time.
1:25 It's a story of war and all kinds of
1:26 human rights
1:29 violations. And it goes much deeper than
1:32 you may think. This is the story of the
1:35 beers and the evil business of [Music]
2:08 Our story starts in 1867 in South Africa
2:10 when a young boy was playing a game with
2:12 some stones. A passer by happened to
2:15 notice that one of the stones seemed to
2:17 sparkle as it caught the light.
2:19 Intrigued, he asked the boy if he could
2:22 buy the stone, but the boy simply gave
2:24 it to him for free. That sparkly stone
2:27 turned out to be a diamond. And once
2:28 people heard of the discovery, a new
2:31 diamond rush was ignited. Adventurers
2:34 from Europe and America rushed to South
2:36 Africa in the hope of finding diamonds
2:39 and making their fortune.
2:41 Not far from where the diamond was found
2:44 in South Africa, Ceil Roads, a shy and
2:46 sickly 17-year-old from England, was
2:48 working on a cotton farm when he heard
2:51 the news. Ceil was born with a weak
2:53 heart and lungs and hadn't been expected
2:55 to live for very long. But when his
2:57 older brother Herbert asked him to come
2:58 join him on his farm out in the Cape
3:00 Colony, Ceile's fortunes changed completely.
3:03 completely.
3:05 The Cape Colony was a British colony in
3:07 present-day South Africa, and the dry
3:10 climate did wonders for Ceile's health,
3:12 which improved almost immediately after
3:15 he arrived in 1870. But the two brothers
3:16 were very different, and working
3:19 together wasn't easy. While Herbert was
3:22 impulsive, adventurous, and hands-on,
3:24 Settle was reserved and awkward. He
3:26 spent his days keeping to himself and
3:28 reading books and spent his nights
3:30 dreaming of a life his poor upbringing
3:32 and poor health meant he could never
3:35 have. Since he was a child, Settle had
3:37 dreamed of studying at the prestigious
3:39 Oxford University and living among the
3:41 upperass elite he admired from his
3:44 books. But instead, he was stuck doing
3:46 hard labor halfway across the world in Africa.
3:49 Africa.
3:50 So when the two brothers heard that a
3:53 diamond had been found nearby, they were
3:56 both eager to investigate. For Herbert,
3:58 it appealed to his sense of adventure.
4:00 But for Ceil, it was the chance to make
4:02 some real money and turn his dream into
4:05 a reality. Herbert was among the first
4:07 to purchase claims of land to mine on
4:10 the nearby Debeers farm owned by two
4:12 Dutch brothers who had until now been
4:14 living a quiet life with their family.
4:16 This meant that Herbert had the
4:18 exclusive rights to mine for diamonds on
4:20 these bits of land so long as he paid a
4:23 very small annual fee to the
4:25 farmers. Immediately after the Debeers
4:27 brothers opened their land to
4:29 prospectors like Herbert, they regretted
4:31 their decision. Desperate to keep their
4:33 family away from the greed, sin, and
4:35 violence that rapidly engulfed their
4:38 home, they quickly sold their farm and left
4:38 left
4:41 town. And the Debeers brothers were
4:43 right. It didn't take long for the local
4:46 town of Kimberly to be transformed into
4:48 a pit of lawlessness as thousands of
4:50 foreigners arrived to try their luck at
4:53 diamond mining. And soon, hundreds of
4:55 diamonds were being found all across
4:59 nearby farms. But this was actually
5:01 really unusual. Diamond deposits had
5:04 normally been found along riverbeds, and
5:06 until now, there had only been a small
5:08 handful of locations where diamonds
5:10 could be found at all. This had led to
5:12 the common belief that diamonds were
5:14 rare and valuable. A concept that was
5:16 cemented in the west when European
5:18 nations like Britain, Portugal, and
5:20 Holland colonized the world and took
5:23 over diamond production for themselves.
5:25 Slavery, violence, and land seizures
5:28 were used to mine diamonds and send them
5:30 back to feed the growing appetite of the
5:32 wealthy elite in Europe. This meant that
5:34 by the time of the unusual discoveries
5:37 in South Africa, the diamond sources in
5:39 historic locations like India and Brazil
5:42 had all but dried up. By comparison, the
5:44 amount of diamonds being found in South
5:46 Africa was turning out to be
5:49 unbelievably large. Rather than a few
5:51 diamonds deposited on a riverbed here or
5:53 there, thousands upon thousands of them
5:56 were being found. And they were all
5:58 hidden in a blue layer of rock deep
6:00 under the ground that was soon dubbed
6:02 Kimberlite. after the nearby town of
6:04 Kimberly. But while Herbert was off
6:06 trying to make his fortune on the
6:08 Debeers's land, he had left his
6:10 frustrated younger brother Ceile in
6:12 charge of the cotton farm. Although he
6:14 was unhappy about it, to his own
6:16 surprise, Settle was able to
6:17 significantly increase the profits
6:20 within a single season. But he couldn't
6:22 help but wonder if he was able to do so
6:25 well in charge of a meager cotton farm,
6:27 how would he fare at the head of a
6:30 diamond mine? Ceile's heart began to
6:32 race as he considered the idea. Maybe
6:34 this could be his way to make enough
6:36 money and gain enough status to study at
6:38 Oxford and become part of the upper
6:41 class elite like he'd always
6:44 dreamed. So, ignoring his big brother's
6:47 orders, 18-year-old Ceiles abandoned the
6:48 cotton farm, took the extra money he'd
6:51 made, and purchased his own claims on
6:54 the Debeers farm. To keep his costs low,
6:56 Ceile saw no issue with exploiting
6:58 locals to dig for him, who he frequently
7:00 referred to as
7:03 barbarians. You see, Ceil had many
7:05 different sides to him, and some of them
7:07 were extremely
7:09 dark. His obsession with the British
7:12 upper class had also led to an obsession
7:14 with British imperialism, causing Ceile
7:16 to see the British race and culture as
7:19 far superior to the rest of the world.
7:21 This meant he was happy to pay little to
7:23 no wages to the local workers and
7:25 enforce intrusive searches and brutal
7:28 beatings. And as the miners continued to
7:31 dig deeper and deeper holes, the already
7:33 exhausting work became significantly
7:35 more dangerous, especially once the
7:37 rainy season began. Sites were prone to
7:40 collapsing down on workers and the holes
7:42 frequently filled with deep water.
7:44 Nearly a third of all workers either
7:46 died, were severely injured, or became
7:48 too sick to work. [Music]
7:50 [Music]
7:53 However, where others saw disaster, Ceil
7:56 saw opportunity. He'd recently seen an
7:58 advert posted in town by a local farmer
8:00 desperate to sell his water pump, which
8:02 Ceile knew exactly what he could do
8:05 with. He spun a story to the other claim
8:08 holders about how he had single-handedly
8:10 tracked down the only water pump in the
8:13 entire colony and fiercely negotiated to
8:15 buy it from its unwilling owner, paying
8:17 an insanely high amount that the farmer
8:20 simply couldn't refuse. Ceil knew that
8:23 sometimes the story is more important
8:25 than the truth. The other claim holders
8:28 believed his story, and seeing no other
8:31 option, they all paid Ceile fees to rent
8:33 out the machine so they could pump the
8:34 water from their mines and continue
8:37 digging for diamonds. Just as he'd
8:39 hoped, Ceile's story helped propel him
8:41 to local fame. With many seeing him as
8:43 an intelligent entrepreneur to keep an
8:46 eye on, using all the money he made, he
8:48 began buying other mining operations and
8:50 consolidating them. He quickly became
8:53 the largest claim holder on the entire
8:56 Debeir site and this enabled Ceil to
8:58 found his own business named the Debeers
9:01 Diamond Mining Company. Ironically named
9:02 after the two Dutch brothers who had
9:04 wanted nothing to do with diamonds as
9:08 they said it was an evil
9:10 industry. However, while Ceil was
9:11 becoming wealthier than he could have
9:14 imagined, his brother Herbert wasn't
9:16 doing as well. So he made another
9:19 impulsive decision to head across the
9:22 country to search for gold instead. But
9:24 soon after his tent caught fire while he
9:27 was sleeping and he was burnt
9:29 alive. Ceile was horrified to hear what
9:31 had happened and decided it was time to
9:34 return home to England to reunite with
9:36 what was left of his family. So using
9:39 his newly made fortune, Ceile put one of
9:40 his business partners in charge of the
9:42 mine. and he returned home to England to
9:44 see his family and grieve the loss of
9:47 his brother. Whilst back home, he seized
9:49 the opportunity to make his childhood
9:52 dream a reality and enrolled in Oxford
9:54 University. But within just a couple of
9:56 months, Settle's health drastically
9:59 deteriorated again, leaving him with no
10:00 choice but to return to the drier South
10:03 African climate that seemed to keep his
10:05 sickly heart and lungs under control.
10:07 Settle now knew that the only way to
10:09 truly propel himself into upper class
10:13 society would be through his diamond
10:16 business. However, as more and more
10:18 diamond deposits continued to be
10:20 discovered nearby, Settle began to
10:22 realize an unsettling truth for his
10:25 company's future. Diamonds weren't
10:28 actually that rare. In fact, they were
10:31 incredibly common. Since so many were
10:33 being found, the global market was soon
10:36 flooded with South African diamonds. And
10:39 so their price began to
10:42 plummet. Once again, Zeal knew that the
10:43 story was going to be more important
10:46 than the truth. To keep the price of
10:47 diamonds high, he was going to have to
10:49 make it seem as though these common
10:51 stones were as rare as they were once
10:54 thought to be. But to do that, he'd need
10:56 a way to control how many diamonds were
10:59 going into the market. And this would
11:21 Many claim holders had struggled to keep
11:23 up with the rising costs of replacing
11:25 workers who died from accidents and
11:27 sickness and also the costs for new
11:29 equipment as the mines got deeper and
11:32 more complicated to work. But Ceil had
11:34 managed to keep his minds profitable by
11:37 entrenching himself in the government.
11:39 By running for office and being elected
11:41 into the local Cape Colony Parliament,
11:43 Ceile was not only able to promote his
11:45 British imperialist ideology on a larger
11:48 scale, but he was also able to write and
11:50 push through new laws and deals that
11:53 directly benefited his company, such as
11:55 the ability for Debeers to use convicts
11:57 that he could treat however he wanted
11:59 and even kill if he suspected they were stealing.
12:01 stealing.
12:03 The Beers had also been one of the first
12:05 companies to make use of a closed
12:08 compound system for its black workers.
12:10 In essence, segregating all of the black
12:12 workforce and keeping them permanently
12:14 locked inside a barracks until their
12:16 contracts expired. Inside these
12:18 compounds, they were forced to be naked,
12:20 paid extremely low wages and were
12:23 punished regularly. Their entire lives,
12:24 from the moment they woke until the
12:26 moment they slept, were under the
12:28 control of the bears. And to make
12:30 matters worse, Settle was known for
12:33 disregarding safety laws, endorsing
12:36 invasive body searches, and treating any
12:39 discontent with extreme violence. These
12:41 brutal tactics had allowed Ceile to cut
12:44 his costs and earn larger profits. And
12:46 this enabled him to buy out other
12:48 claimments who were struggling. By
12:50 absorbing the competition, he was able
12:53 to get the majority of the Debeers mine
12:55 under his control.
12:57 However, another young Englishman,
13:00 Barney Bonato, had the majority of the
13:02 newer Kimberly mine under his control,
13:05 and Barney's mine appeared to be larger
13:07 and produce better quality diamonds. If
13:09 Settle was to keep the price of diamonds
13:11 high, he needed to truly control the
13:14 supply. Thus, he needed to figure out a
13:16 way to seize Barney's Kimberly Central
13:19 Company for himself. Luckily for Ceile,
13:21 as his wealth had continued to grow, so
13:24 had his political influence. Having
13:26 practically trained his whole life to be
13:28 among the elite, Ceile was skillfully
13:30 able to blend into the circles of the
13:32 upper class, something Barney had failed
13:34 to do. This allowed him to connect with
13:37 powerful and wealthy figures like Nathan
13:39 Rothschild, who he convinced to back his
13:42 plan to manipulate the diamond market.
13:44 In person, Cecile befriended Barney,
13:46 proposing plans to cooperate and strike
13:49 a deal together. But behind his back,
13:52 Ceile was secretly using his investors
13:54 money to buy a huge stake in Barney's
13:56 business. By the time Barney realized
13:59 what was happening, it was too late.
14:02 Ceile ended up buying out Barney's rival
14:04 enterprise. And with both the Debeers
14:06 mine and the Kimbley mine now completely
14:09 under his control, Ceile merged the two
14:12 companies in 1888 to form Debe's
14:15 Consolidated Mines. Ceile had wiped out the
14:16 the
14:19 competition. As the most powerful man in
14:21 the country, Ceile levied his influence
14:23 over the limited voting population and
14:25 was elected to become prime minister,
14:27 which put him in a position for the next
14:30 phase of his plan. Ceile helped
14:32 introduce policies like the hut tax,
14:34 which forced locals to pay to live on
14:37 what was previously their own land. And
14:40 in order to pay, they had to earn money
14:41 by working in his dangerous diamond
14:43 mines, where they would be forced to
14:45 live, eat, and sleep in his closed
14:47 compounds until they repaid their
14:50 supposed debt. He even made it close to
14:52 impossible for black citizens to vote,
14:55 resulting in constant riots and protests
14:57 that he shut down with excessive
15:00 violence. In fact, many of the laws Ceil
15:02 introduced were instrumental in laying
15:04 the foundations for the nation's future
15:07 apartheid policies.
15:08 But regardless of how they were
15:10 received, these policies made diamond
15:12 production in South Africa cheaper than
15:16 ever. At only 35 years old, Settle now
15:18 controlled more than 90% of the diamond
15:21 output in the entire world. And thus, he
15:23 could now fully control the number of
15:26 diamonds available on the market. He
15:28 began to stockpile diamonds, releasing
15:30 only a limited amount into the market to
15:32 create the illusion that they were still
15:35 rare as this artificial scarcity would
15:37 drive up the price. To achieve this,
15:39 Settle and his investors created a
15:42 diamond syndicate based out of London
15:44 where a small carefully chosen group of
15:46 firms gained the exclusive right to
15:48 purchase diamonds from Debeers, which at
15:50 this point basically meant they were the
15:52 only companies able to buy diamonds at
15:55 all. These firms were forced to buy a
15:57 specific amount of gems at a fixed price
15:59 with the beers stockpiling the rest to
16:02 avoid saturating the market. Members of
16:03 the syndicate would then sell their
16:05 diamonds to smaller merchants who then
16:08 sold them to customers. This single
16:10 channel selling method gave Ceil and
16:12 Debe complete control over the
16:14 production of diamonds, the sale of
16:16 diamonds, and the price of diamonds.
16:20 They had created a diamond cartel. As a
16:22 result, the price of diamonds steadily
16:23 increased around the
16:26 world. Meanwhile, Ceil continued to
16:29 consolidate power. He even had his own
16:31 private army, which he used to take over
16:33 other parts of Africa and mine for more
16:36 diamonds. Ceile roads then founded the
16:38 African territory of Rhdasia, named
16:41 after himself, which is present day
16:44 Zimbabwe and Zambia. Ceil seemed unstoppable.
16:46 unstoppable.
16:49 But in 1902, at only 48 years old, his
16:52 weak heart finally caught up with him.
16:54 Settle died with no wife or children,
16:56 leaving nearly his entire fortune to
16:59 establish the road scholarship at
17:01 Oxford. It's quite incredible how a
17:03 sickly boy from England rose to control
17:06 90% of the world's diamonds and become
17:08 prime minister of the Cape Colony, all
17:10 whilst using the most brutal and
17:12 cutthroat tactics.
17:14 However, whilst the beer's leader was
17:17 dead, the company's rise to power was
17:40 Ernest Oppenheimer had spent his entire
17:43 life learning about the diamond industry
17:45 and admiring the exploits of Ceile and
17:48 his partners from afar. With his astute
17:49 knowledge of the industry and razor
17:51 sharp instincts, Ernest was quickly
17:53 taken under the wing of several major
17:55 players on the Debeers board of
17:57 directors. and he eventually became the
18:00 chairman and head of the entire company.
18:02 Whereas before Debeers had tried to
18:04 outmuscle or take over all new diamond
18:07 sources that popped up, Ernest had a
18:09 different strategy. He instead chose to
18:11 incorporate new sources into his selling
18:13 channel. Ernest created several
18:15 subsidiary companies under the bracket
18:18 of the central selling organization
18:20 known as the Cso that would directly
18:22 purchase all diamonds from alternate
18:25 producers. If anyone refused to be
18:28 bought out or sell to the cso, Ernest
18:29 found ways to undermine and disrupt
18:32 their production. He used connections
18:33 with governments to force companies to
18:36 sell. He flooded markets with similar
18:38 diamonds to devalue their products. And
18:40 he even sent in undercover employees to
18:43 sabotage mines and equipment. If anyone
18:45 did manage to produce diamonds that they
18:47 wouldn't sell to Debeers and the Cso,
18:49 Ernest would cut off their ability to
18:51 sell by threatening to blacklist any
18:53 merchants who dealt with them. As a
18:56 result, everyone had no real choice but
18:58 to partner with the bears. From hordes
19:00 of diamonds seized by the communists in
19:03 Russia to oldw world sources in India to
19:05 new mines across the African continent,
19:08 the beers led by Nest purchased
19:11 everything. But since they operated
19:12 under several different subsidiary
19:15 names, most people had no idea just how
19:18 much power and control Debeers actually
19:21 had. In reality, Debeers had a hand in
19:24 nearly every diamond mine in the world,
19:26 and they continued to stockpile all
19:28 those diamonds. They released just the
19:30 right amount to keep prices high and
19:32 maintain the perception of diamonds
19:35 being rarer than they actually are.
19:37 However, many of the diamonds deers were
19:39 now stockpiling came from operations
19:42 that were even more dark and disturbing
19:44 than their own. Mines in countries like
19:47 Belgian Congo were built on slavery,
19:50 child labor, and even genocide. In other
19:52 parts of Africa, the diamonds were being
19:54 used to fund wars and overtopple
19:57 governments. And unlike Debe's own
19:59 mines, these new business partners
20:02 weren't really under their control. This
20:04 would later lead to some very serious
20:07 problems. But to Debeers in earnest,
20:09 none of that mattered right now, as they
20:11 had bigger things to worry about. You
20:13 see, between their own production and
20:15 their mass purchasing, the biz was
20:17 building up such a huge stockpile of
20:18 diamonds that they were starting to
20:20 worry they might not be able to sell
20:22 them all. And this problem was about to
20:26 be massively intensified in 1929 by the
20:29 worst economic crash in history. In the
20:31 following years, the world economy
20:33 suffered a devastating collapse known as
20:35 the Great Depression. And needless to
20:37 say, demand for diamonds completely
20:40 plummeted. The American economy was in
20:42 pieces and this was a major issue for
20:44 Nest as the price of diamonds had been
20:47 completely tied to the American market.
20:50 In 1919, America was importing roughly
20:53 $84 million worth of diamonds from the
20:56 Beers. Yet by 1930, American imports had
20:59 dropped to only $5 million a year. And
21:01 since the beers was determined to
21:03 continue buying up all global diamond
21:05 production that fell outside of their
21:07 own control, this left them with huge
21:10 expenses and very little income. Despite
21:12 the state of the American economy,
21:14 Ernest was still convinced the US was
21:16 the answer to his problems. He just
21:19 needed a way to expand his market wider
21:21 to include everyone, not just the
21:24 wealthy elites. In other words, to biz
21:26 already controlled the supply, but now
21:29 they needed to control the demand.
21:31 So Ernest sent his 29-year-old son,
21:34 Harry, to America to begin what many
21:36 have called the greatest marketing
21:39 campaign of all time. Or, as some would
21:43 say, the greatest marketing scam of all time.
22:06 With the help of an advertising firm,
22:08 Harry Oppenheimer was tasked with
22:11 overseeing a campaign unlike any that
22:13 had been done in history. Rather than
22:15 focusing on a specific brand, they were
22:19 going to promote the concept of diamonds
22:22 themselves. In the early 20th century,
22:23 there had been a trend of rings being
22:25 given by a man to their partner when
22:27 they proposed. But these rings had
22:30 featured cheap jewels like birthstones,
22:32 and it hadn't really caught on yet. That
22:34 was until Harry and the marketing team
22:37 laid out a plan to convince the public
22:39 that engagement rings were a necessity
22:41 for all
22:43 proposals, and more importantly, that
22:46 the only stone worthy of true love was a diamond.
22:48 diamond.
22:50 Harry and Ernest wanted their team to
22:52 interlink diamonds with the fundamental
22:54 concept of love. If the general
22:56 population felt they had to have a
22:58 diamond engagement ring, regardless of
23:00 their wealth or social status, the beers
23:02 would have a guaranteed diamond market
23:04 forever. Because if you can convince
23:06 people the biggest romantic gesture is
23:09 giving a diamond, people will buy it no
23:12 matter how the economy is doing.
23:14 So they began small using classy
23:17 handdrawn images and planting stories in
23:18 newspapers that focused on linking
23:21 diamonds to the ideas of love and
23:23 marriage. To make sure this message got
23:25 into the minds of young girls and women,
23:27 they sent lecturers around the country
23:29 to churches, high schools, and
23:32 universities to give propaganda fils
23:34 about diamond rings. Then they paid
23:37 Hollywood studios and producers to
23:39 insert scenes about diamond rings and
23:42 proposals into their movies. and they
23:43 started placing diamond rings on the
23:46 fingers of Hollywood celebrities so the
23:48 biggest stars were seen wearing them.
23:50 Using a weekly service they called
23:52 Hollywood Personalities, they sent
23:54 pictures and details of rings worn by
23:56 the stars to all of the country's biggest
23:57 biggest
24:00 newspapers. At the time, this kind of
24:02 product placement was an innovative
24:04 strategy, and most people didn't even
24:06 realize they were being advertised to.
24:09 But subconsciously, symbols of American
24:11 beauty and the American dream became
24:14 heavily tied to diamonds. And clever use
24:16 of corporate branding, like having
24:18 Marilyn Monroe sing the now famous,
24:20 "Diamonds are a girl's best friend,"
24:22 helped hammer in the message for Debeiz
24:25 and make diamonds the ultimate status
24:27 symbol. However, to make sure they
24:30 appealed to every segment of American
24:33 society, they had another genius idea.
24:35 Instead of putting out a recommended
24:37 price to spend on an engagement ring,
24:39 they cleverly advertised that you should
24:41 spend 2 months salary. This meant
24:44 whether you were rich or poor, you still
24:46 had a price in mind. They would later
24:49 raise this to 3 month salary. And it's
24:51 crazy really, the company profiting from
24:52 you buying their product, literally
24:54 telling you how much they want you to
24:57 pay, but making it seem like a tradition
24:59 rather than a marketing campaign.
25:01 And when the advertising team noticed
25:03 that men and women were picking out
25:04 engagement rings together and that women
25:07 tended to go for cheaper alternatives,
25:09 they added another layer to the message.
25:12 And engagement should be a
25:14 surprise. In a single marketing move,
25:17 they forced men to shop alone with
25:19 nothing but debeers advertising to guide
25:21 their choices. Underneath it all, there
25:23 was one message that stood strong. If
25:25 you wanted to get married, you had to
25:28 buy a diamond.
25:30 And before long, the concept of diamond
25:32 engagement rings was so ingrained in
25:34 American culture that young couples
25:36 believed it was a timeless tradition
25:38 instead of a recent invention by a
25:40 corporate machine. Because up until this
25:42 point, engagement rings weren't as
25:44 common. And most importantly, different
25:47 gemstones were typically used. But
25:49 Debeers convinced the world you had to
25:51 propose with a diamond ring. In fact,
25:53 it's widely believed that debeers helped
25:55 push the superstition about opals
25:58 attracting bad luck as opals had often
26:00 been preferred over diamonds before
26:03 debeers got involved. Even today, almost
26:05 a century later, many people are unaware
26:07 of the manipulative origins of this
26:10 still maintained tradition.
26:12 But nothing captured the success of the
26:15 marketing campaign greater than its key
26:18 slogan, a diamond is forever, which has
26:20 since been recognized as the greatest
26:23 advertising slogan of all time. Not only
26:25 did it elegantly capture the notion of
26:27 lasting and symbolic love that could
26:30 never be destroyed, but it subtly hinted
26:32 at something else. Diamond should be
26:35 kept forever and never resold. By
26:37 convincing the public that diamonds
26:38 should never be resold due to what they
26:41 represented, the beers prevented a
26:43 secondary market of secondhand jewels,
26:45 undermining their single channel selling
26:47 so that people wouldn't buy secondhand
26:50 from someone else. Like everything to do
26:52 with diamonds, the story was of course a
26:55 lie. Diamonds don't last forever. They
26:57 can be scratched, scuffed, and even
26:59 destroyed. But what did the truth matter
27:01 when Debe was making millions and
27:04 millions in profit?
27:07 At the start of the campaign in 1939,
27:09 less than 10% of women in America
27:11 received a diamond engagement ring. But
27:14 within only 20 years, that number was
27:17 over 80%. And within 40 years, diamond
27:20 sales in the US had risen from around
27:22 $23 million a year at the start of the
27:26 campaign to an incredible $2.1 billion a
27:28 year or around 7 billion adjusted for
27:31 inflation. And with its success in the
27:33 US, Debeers replicated its marketing
27:35 campaign in different nations across the
27:38 world. And soon it had huge markets for
27:40 diamond engagement rings in countries
27:43 like the UK and Japan. In Japan, for
27:45 example, the amount of future brides
27:47 receiving engagement rings grew from 1%
27:52 in 1966 to 90% in the early '90s. Even
27:54 though a diamond is basically just a
27:56 lump of carbon, the beers convinced the
28:00 world that diamonds equal love.
28:02 But all the time Debeers had been
28:05 marketing the concept of love, some much
28:07 darker events had been unfolding in the
28:09 background that threatened to completely undo
28:17 everything. Before we get to the next
28:18 chapter, it's time to answer a question
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29:30 Soon after Debeers began their marketing
29:32 campaign to the American public, the
29:34 Second World War broke out. Because of
29:36 changing technology, diamonds had become
29:38 a strategic resource for both sides of
29:40 the war as they needed industrial
29:42 diamonds to manufacture new weapons and
29:45 aircraft. In many ways, the need for
29:46 industrial diamonds was great for the
29:49 beers as it gave them a way to offload
29:52 their poorer quality stones, but in
29:53 other ways, it was a threat to the
29:56 cartel's dominance and single channel
29:59 selling. Nazi Germany was particularly
30:02 troublesome. The Nazis had forbidden all
30:04 diamond exports, confiscating them for
30:06 themselves in every country they
30:08 occupied. Now, it's worth noting that
30:10 diamonds don't look anywhere near as
30:12 impressive when they're first found. It
30:14 takes the skill of cutters and polishers
30:16 to transform them into the final product
30:19 we see. And as the Nazis swept through
30:21 Europe, they destroyed many of the key
30:23 diamond cutting centers like the one in
30:25 Antworp. And since this industry
30:28 featured a large Jewish community, many
30:29 of the skilled workers were taken off to
30:32 concentration camps, never to
30:35 return. The Nazis planned to create
30:37 their own diamond cutting monopoly, one
30:39 that Debeers would have no choice but to
30:40 use within their selling channel.
30:42 However, as Debeers was based in Allied
30:44 territory and Ernest was a patriotic
30:46 supporter of his home country of
30:48 Britain, Debeers was publicly backing
30:52 the Allies. But in reality, Ernest, just
30:54 like Ceil, had always supported his
30:56 company's interests over any sense of
30:58 morality or
31:01 duty. So when President Roosevelt came
31:04 to Ernest demanding he sell him 6.5
31:06 million carats of diamonds that the US
31:08 desperately needed, Ernest outright
31:11 refused. That is unless the beers was
31:13 given permission to formally sell on US
31:16 soil with indefinite immunity from any
31:18 prosecution due to their monopoly which
31:20 breached US trade laws. Roosevelt
31:23 couldn't give nest what he wanted. So
31:25 Ernest wouldn't give Roosevelt what he
31:27 needed. But then President Roosevelt
31:29 threatened to pause the supply of planes
31:31 being sent to Britain which were needed
31:33 to defend against German air raids and
31:35 the same planes that required industrial
31:38 diamonds in their manufacturing process.
31:40 So that's when the British government
31:42 stepped in and pressured Debeers to make
31:44 a deal with the United States. They
31:47 eventually did, but even still, time
31:49 after time, Debeers failed to fulfill
31:50 the deal, claiming they didn't have
31:53 enough stock. This caused the US to open
31:56 an investigation into the company,
31:58 leading to them uncovering a whole host
32:01 of dark secrets.
32:03 They discovered that Debeers had not
32:04 only been lying to them about their
32:07 stock, but that they'd been sabotaging
32:09 rival operations to ensure that the
32:10 Allies would have to pay their high
32:14 monopoly prices for industrial diamonds.
32:16 The US accused the Beers of violating
32:19 antitrust laws and price fixing, but it
32:20 was unable to prosecute them as they
32:22 weren't technically operating on US
32:25 soil, not directly at least. And when
32:26 they tried to get their allies in
32:28 Britain to punish them instead, they
32:30 soon found out that everyone in the UK
32:32 government dealing with diamonds was
32:35 either an active or former employee of
32:37 the beers or the syndic. Roosevelt was
32:40 furious at Nest, but he had no choice
32:41 but to buy what was offered for the
32:43 prices that were
32:46 demanded. More disturbingly, the same
32:48 investigation discovered that Nazi
32:49 Germany had almost run out of their own
32:52 supply of diamonds. Yet somehow they
32:54 were constantly receiving more. Through
32:56 an undercover operation, the US
32:58 discovered that diamonds were being
33:00 illegally smuggled into Germany
33:03 originating from mines owned by Debeers.
33:05 Even though the US were convinced Ernest
33:07 and his syndicate were knowingly selling
33:09 to the enemy for an extortionate profit,
33:11 they could never conclusively prove it
33:17 With the end of the war, these conflicts
33:19 with the US government faded away, at
33:21 least for the time being. But
33:23 controversy remained tightly bound to
33:26 nest and his empire. While selling a
33:28 romanticized dream of love to the
33:30 American public, the new apartheid
33:32 government had risen to power in South
33:34 Africa. And as these brutal laws of
33:37 separation, abuse, and exploitation
33:39 became known around the world, it was
33:41 hard for Debeers to claim ignorance when
33:42 they were directly benefiting from the situation.
33:44 situation.
33:47 And just as the global community began
33:49 to take notice and demand action, at the
33:51 age of 77, Ernest Oppenheimer passed
33:54 away, leaving his son Harry in charge of
33:55 his sprawling
33:58 empire. In the face of severe global
34:00 backlash, Harry shut down the brutal
34:02 closed compounds the Beers had been
34:04 using since its inception and raised
34:07 wages for its black workers. But due to
34:08 new government laws, he still had to
34:11 segregate his workforce by race. and
34:13 nothing he could do to try and save the
34:15 company's image was enough to get around
34:17 the global sanctions that cut South
34:20 Africa off from the wider world
34:22 economy. In order to keep exporting
34:24 diamonds, Harry had no choice but to
34:27 focus his attention on other mines
34:29 outside of South Africa, investing
34:32 heavily in new African sources. But to
34:34 Harry's shock, just as he began to
34:36 regain a degree of control, huge diamond
34:39 deposits were discovered in Russia. To
34:41 make sure these new Soviet sources
34:43 didn't disrupt the already unstable
34:45 market, Harry personally flew to Russia
34:47 to negotiate a
34:50 deal. In exchange for buying close to
34:52 100% of the gemquality diamonds produced
34:55 by the USSR, Harry agreed to give Russia
34:57 all the industrial diamonds it needed
35:00 for its weaponry and machinery. The only
35:03 issue was publicly Russia had cut all
35:05 ties with South Africa. And this was at
35:08 the height of the Cold War with the USSR
35:11 being seen as an enemy of the West. So
35:13 Harry had to conduct all of these deals
35:15 in secret, not wanting to anger the
35:18 Western nations he was publicly allied
35:20 to. And to make matters worse, the
35:22 diamonds that came from the Russian
35:24 mines were different to any that had
35:26 been seen before. They were extremely
35:28 small and had a different silver
35:30 coloring to them. Harry knew that the
35:32 syndicate members didn't want these
35:34 lesser diamonds. So, he began forcing
35:36 them to purchase bundles of different
35:39 quality diamonds, including the silver
35:41 Russian ones. They had the choice of
35:43 purchasing the entire bundle or nothing
35:46 at all, which really wasn't a choice for
35:48 them. It only took a few months for many
35:50 of the merchants to complain. Debeers
35:53 had spent years advertising a specific
35:54 style of diamond to the market, and none
35:56 of their customers wanted these tiny
35:59 Russian gems. So Harry went back to his
36:02 marketing team to try and find a
36:05 solution. Together, Harry and his team
36:07 once again came up with a genius
36:10 marketing campaign. This time to sell
36:12 diamonds to those who already had an
36:15 engagement ring. They began advertising
36:17 the concept of eternity jewelry that
36:19 featured a handful of small silver
36:22 diamonds. This eternity jewelry, they
36:24 claimed, was a way to show your wife how
36:26 much you still loved her and to
36:28 celebrate your
36:30 anniversaries. Like their last campaign,
36:32 it was a rousing success. Without
36:35 anybody realizing, Harry and Deers had
36:37 convinced the West to buy valueless
36:39 luxury goods during the height of the
36:41 Cold War that was directly funding the
36:43 military expansion of their enemy.
36:45 Debeers were selling the concept of love
36:50 while funding the reality of war.
36:53 But the general population had no idea
36:56 about any of this. Instead, their
36:58 attention had turned to the African
37:00 diamonds Debeers were selling, which
37:02 were gaining a very different and very
37:26 In the years after Harry had diversified
37:28 into wider Africa, many of the same
37:30 countries were beginning to declare
37:32 independence from their colonial rulers.
37:34 And these new governments wanted control
37:37 of their own resources with or without
37:40 Debeers. But Debeers wanted to make it
37:42 clear that without them was not an
37:44 option. As diamonds were smuggled out of
37:46 these nations to be sold outside the
37:49 cso, debeizers took action. These struck
37:51 deals with governments offering huge
37:53 financial incentives to sell directly to
37:55 them and stamp out smuggling on their
37:58 behalf. In nations like Congo that had
38:00 just become independent, the government
38:02 was more than happy to take the beers's
38:03 money in exchange for protecting their
38:06 business interests. They raised an
38:08 entire army to oversee production of the
38:10 diamond mines, murdering thousands of
38:13 supposed smugglers. In one incident,
38:15 they gunned down 200 people near a
38:17 diamond deposit, killing every one of
38:20 them in minutes, only to discover it was
38:24 a group of students on a camping trip.
38:26 Before long, it became easier to sell to
38:29 the deers and the cso than to face the
38:31 wrath of the governments, soldiers, and
38:33 mercenaries they were financing to
38:36 protect their interests. But as many of
38:38 these new African nations became
38:40 engulfed in internal conflicts, waring
38:42 factions took control of the diamond
38:45 deposits, using slavery and child labor
38:47 to work them. They too were happy to
38:50 sell to the cso and deers if it helped
38:52 raise the funds they needed for their
38:55 wars. But this time the world had
38:57 started to notice that their diamonds
38:59 from nations like Sierra Leon, Angola,
39:01 and Congo were being used to fund these
39:04 conflicts in which horrific atrocities
39:06 were being committed. This led to the
39:08 term blood diamonds being coined,
39:10 meaning a diamond that was mined in a
39:13 war zone and sold to fund terrorism,
39:16 warlords, or other violent activity. The
39:18 West was outraged by the idea that their
39:21 symbols of love and eternity were born
39:24 in blood and death. With about 15% of
39:26 global sales believed to be blood
39:28 diamonds, the issue became so severe
39:30 that the UN introduced embargos on the
39:32 purchase and sale of them. Though
39:34 Debeers was reluctant to join any
39:36 embargos, Harry began to worry that the
39:38 romanticized idea of diamonds their
39:40 family had spent half a century
39:42 perfecting was starting to be eroded by
39:46 its association with violence and war.
39:48 It seemed at long last the story of
39:50 Debeers's diamonds was no longer strong
39:53 enough to overpower the truth. News
39:55 stations, protesters, and human rights
39:57 activists were calling Debeers out by
40:00 name, accusing them of endorsing and
40:02 encouraging blood diamonds. So realizing
40:04 that this threatened their entire
40:06 empire, Debeers agreed to the embargos
40:08 and promised they would stop trading in
40:10 blood diamonds. And in an attempt to
40:12 regain confidence in their diamonds,
40:14 Debeers helped introduce the Kimbley
40:16 process. This meant diamond sellers
40:18 would have to prove exactly where the
40:19 gems came from and how they had been
40:22 obtained. They claimed this would mean
40:24 every diamond could be proven to be
40:26 sourced from either ethical or unethical
40:29 sources. These changes seemed to end the
40:31 public outcry. And whilst it's true they
40:34 certainly helped, the reality is that
40:36 blood diamonds still exist. The
40:39 company's vast structure continued to be
40:40 used to send blood diamonds to other
40:43 nations such as Rwanda and Uganda, who
40:45 would then sell them to the CSO through
40:47 third parties, claiming they originated
40:50 in their own countries. Suddenly,
40:52 countries with no actual diamond
40:54 deposits were miraculously becoming some
40:56 of the biggest exporters of diamonds in
40:58 the world, and all of these supposedly
41:01 clean gems were ending up in the Debeers
41:03 selling channel. Another issue was that
41:05 the scope of the Kimbley process
41:07 certification was very narrow, which
41:09 meant nations like Zimbabwe that weren't
41:11 deemed to be a war zone were free to
41:13 sell clean diamonds. Even though
41:16 atrocities and human rights crimes were
41:18 being carried out to mine them, while
41:21 the media outcry had quietened down, the
41:22 association between violence and
41:24 diamonds never truly left public
41:26 consciousness. The popular movie called
41:28 Blood Diamond, starring Leonardo
41:30 DiCaprio, only helped highlight to the
41:33 masses the brutal realities of diamond
41:36 mining. However, it wasn't public
41:37 opinion that was going to finally bring
41:40 down the Diamond Empire. It was
41:42 everything else that was going on behind the
41:49 scenes. Here on Magnets Media, I tell
41:51 the stories of different businesses
41:52 which may have made you consider
41:55 starting your own company. So, what if I
41:57 told you there was a business model you
41:59 can do from literally anywhere in the
42:01 world with basically no startup costs,
42:04 but still make crazy amounts of money?
42:06 I'm talking about running a faceless
42:08 YouTube channel. That's exactly what
42:11 I've done with Magnates Media. And now I
42:12 get paid to make videos about whatever
42:15 topics interest me. And because I'm not
42:17 on camera, I can run the channel with
42:19 literally just a laptop, which means I
42:20 can work from wherever I want, whether
42:23 that's relaxing at home or traveling the
42:25 world. But you can do the exact same
42:27 thing. Whatever you spend time
42:29 researching for free right now or
42:31 whatever you enjoy talking about, you
42:33 could create mini documentaries about
42:35 that. It's like running your own Netflix
42:37 where you choose what shows to make. And
42:40 with the help of online freelancers, you
42:41 can just outsource any parts you don't
42:44 want to do, such as editing. And here's
42:46 the exciting part. When you make good
42:48 content, YouTube promotes it for free.
42:51 And you earn money from ads, sponsors,
42:53 affiliates, and so many other income
42:55 streams. And look, I know the words
42:57 passive income get thrown around a lot,
43:00 but YouTube is one of the best forms of
43:02 genuine passive income because once you
43:04 create a library of videos, YouTube can
43:07 keep pushing them for years to come. And
43:09 every time someone watches, you're
43:11 making money. Videos I made years ago
43:14 still get views and earn money every
43:16 single day with no extra work from me.
43:18 And that's why I think investing in
43:20 content is one of the best investments
43:22 you can ever make. Because unlike
43:24 investing in stocks, which may go down
43:26 in value, once you've made a piece of
43:28 content, it can just keep printing
43:30 money. So given how great the business
43:32 model is of running a faceless YouTube
43:35 channel, why don't more people do it?
43:37 The reality is most people don't have a
43:39 system to follow. They're just guessing
43:41 what to do and following bad advice that
43:43 no longer works. So they never get any
43:46 momentum with their channel. But here is
43:49 the good news. I've already put in 5
43:52 years figuring out exactly what works.
43:54 So you don't have to. You can literally
43:56 just copy my system, which you already
43:58 know is proven to work. So that way, you
44:00 don't need past experience. I'll just
44:03 show you how to turn your interests into
44:05 a highly profitable business. If you'd
44:06 like to learn more about this
44:08 opportunity, just click the link in the
44:10 description that says magnates
44:12 media.com. Since this includes
44:15 personalized help from me, spaces are
44:17 limited. So, if you're interested, click
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44:39 In the 1950s, General Electric patented
44:41 their technique to manufacture man-made
44:44 diamonds in a lab. Debeers was terrified
44:46 as if synthetic diamonds caught on and
44:48 were produced at scale, it could be the
44:51 end of their empire. But initially,
44:53 these labmade diamonds had been small
44:55 and rough and only really usable in the
44:57 industrial market. Still, since the
44:59 beers had seen them as a threat to their
45:00 business, they struck a number of
45:03 exclusivity deals with General Electric.
45:05 These deals gave the beers access to
45:07 General Electric's patent and enabled
45:09 the two companies to divide up the
45:11 western industrial market between
45:14 themselves. Despite being identical to
45:15 natural diamonds, these synthetic
45:18 diamonds sold for less than 50 cents a
45:20 carat. But because of the huge growth of
45:22 the market, with industrial diamonds
45:24 used for practically every aspect of
45:26 modern technology, it meant that even
45:28 when General Electric finally mastered
45:30 making gem quality diamonds in a lab,
45:32 they chose not to. It was more
45:34 profitable to make barrel loads of 50
45:35 cent rough diamonds in minutes than
45:38 spend days or weeks growing a small
45:40 number of bigger and better diamonds.
45:42 Regardless, Debeers simply couldn't risk
45:44 their deals with General Electric going
45:47 sour. So Debeers decided to buy up big
45:49 chunks of US companies that manufactured
45:51 products like saws and drill bits from
45:54 industrial diamonds. This would ensure
45:56 that even if General Electric ever
45:58 offered better prices or withdrew their
46:00 exclusivity deal, Debeers could instruct
46:02 these American companies to order their
46:06 own diamonds instead. But this ended up
46:09 backfiring for Debeers. You see, ever
46:11 since World War II, the US Department of
46:13 Justice had a target on Debeers's back.
46:15 They knew the company was violating
46:17 antitrust laws as they clearly had a
46:19 monopoly by controlling the supply of
46:21 diamonds, but every case they'd raised
46:24 ultimately fell apart due to the company
46:27 not officially operating on US soil. But
46:28 with the recent deals the beers had made
46:31 with American companies, the DOJ finally
46:34 had a solid case against them. Thus, in
46:37 1994, both General Electric and Debeers
46:39 were in the American court, accused of
46:41 price fixing and secretly dividing up
46:44 the synthetic diamond industry. And
46:46 before long, a number of US states also
46:49 began taking Debeers to court. Debeers
46:51 had spent decades sabotaging,
46:53 undermining, and bullying American
46:55 businesses in the diamond industry. And
46:57 now they had been shown to be operating
46:59 in the US, they could no longer use this
47:02 as a way to get around American laws.
47:04 Debeers were found guilty on all charges
47:08 and fined just shy of $300 million. This
47:10 still might not have been a huge amount
47:12 to them, but the impact on Debiz'
47:14 operations was massive. As part of the
47:16 settlement, they were forced to abide by
47:19 US laws or lose access to the entire US
47:21 market, which was nearly half of the
47:24 entire global diamond market. This meant
47:25 they could no longer enforce their
47:28 single channel selling within America,
47:30 thus ending their centurylong monopoly
47:32 on the continent. And while the beers
47:35 were busy spending millions in fines and
47:36 lawyer fees just to lose control over
47:39 diamond sales, they were simultaneously
47:42 losing control over diamond production.
47:44 For starters, their deal with Russia had
47:46 fallen apart after the collapse of the
47:48 USSR, with many businessmen and local
47:50 governments choosing to sell their
47:53 diamonds outside of the cso. And at the
47:55 same time, vast new diamond deposits had
47:57 been discovered in countries like Canada
48:00 and Australia. It wasn't long before new
48:02 competitors emerged who were producing
48:04 so many gems that they rivaled the
48:07 output of debears. And many of these
48:09 companies actively marketed their
48:11 diamonds as an ethical alternative to
48:14 the murky history of the bears as did
48:16 the producers of lab grown diamonds as
48:18 they grew in popularity too. Between the
48:20 new diamond production coming out of
48:22 Canada, Australia, Russia, and newly
48:24 independent African nations, plus the
48:27 rise of synthetic diamonds, Debeers had
48:29 completely lost control of production.
48:32 With all of these new sources and rivals
48:34 actively choosing to operate outside of
48:36 the syndicate, the beers had to accept
48:38 defeat. They couldn't use the threat of
48:40 restrictions to force merchants to take
48:43 their diamonds anymore. If the beers cut
48:44 them off, they just go get their
48:47 diamonds from somewhere else. The years
48:49 in which Debeers monopolized the entire
48:56 However, Debeers is still a major player
48:58 in the diamond market with roughly a
49:00 third of all global production still
49:02 under their control and the modern
49:04 consumer market for diamonds is larger
49:07 than ever, estimated at over a hundred
49:09 billion dollars. Given that lab grown
49:11 diamonds are so perfect at this point,
49:13 it may seem surprising the demand for
49:16 natural diamonds remain so high. As one
49:18 tweet put it, "We figured out how to
49:19 grow diamonds that are cheaper and
49:21 better quality than the real thing." And
49:23 so many people are still like, "No
49:25 thanks. The suffering is what makes it
49:28 special." But once again, it's the
49:30 marketing. Ironically, after decades of
49:32 telling people that the more perfect the
49:34 diamond, the more it'll cost, now the
49:36 diamond industry claims that the
49:38 imperfections from natural diamonds are
49:40 what make them more real and valuable
49:43 than synthetic diamonds. They've managed
49:45 to convince people that natural diamonds
49:47 are more special, despite the fact you
49:49 wouldn't be able to tell any difference
49:52 from a diamond grown in a lab. And thus,
49:54 despite the availability of cheaper lab
49:56 diamonds, despite the knowledge of the
49:58 wars and damage diamonds have caused,
50:00 and despite the fact we know how deers
50:03 so ruthlessly manipulated the market,
50:06 somehow their original lie still
50:14 However, if you think the diamond
50:16 industry has a dark past, wait until you
50:18 hear what happened with the tobacco
50:20 industry and the company Jewel. This
50:23 story is crazy. So, just click the
50:24 thumbnail on screen to check that out
