Edward Jay Epstein, wrote in this 1982 Atlantic article "The Marketing of Diamonds: How a Successful Cartel Turned a Worthless Rock into a Priceless Gem":
De Beers proved to be the most successful cartel arrangement in the annals of modern commerce. While other commodities, such as gold, silver, copper, rubber, and grains, fluctuate wildly in response to economic conditions of supply and demand, diamonds have continued, with few exceptions, to advance upward in price every year since the Depression.
The diamond invention is far more than a monopoly for fixing diamond prices; it is a mechanism for converting tiny crystals of carbon into universally recognized tokens of wealth, power, and romance. To achieve this goal, De Beers had to control demand as well as supply. Both women and men had to be made to perceive diamonds not as marketable precious stones but as an inseparable part of courtship and married life. To stabilize the market, De Beers had to endow these stones with a sentiment that would inhibit the public from ever reselling them. The illusion had to be created that diamonds were forever — "forever" in the sense that they should never be resold.
De Beers is facing its first crisis without power to control supply, said Des Kilalea, diamond analyst at RBC Capital Markets, and the strain is showing.
De Beers, the world’s biggest diamond miner, is planning for its turnover to halve this year, it emerged on Wednesday, in the latest sign of how the once-mighty group is struggling to cope with a downturn in an industry it no longer controls.
With diamond prices tumbling by at least 30% over the past year, De Beers has cut production at its mines by 40% year-on-year and mothballed its flagship mines in Botswana. Its two new Canadian mines, whose costs led the company to take on so much debt, lowered production soon after they opened in August.
As the diamond market faces one of its bleakest years in a generation, Christopher LaFemina, an analyst at Barclays Capital concluded that De Beers was “bleeding cash."
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