The Conflict

For about 112 years the South African diamond conglomerate De Beers, which is controlled by the Oppenheimer family, has dominated the world's diamond industry. Between 70 and almost 100 percent of the worldwide diamond production at any given time has been funneled into the company's cartel, the Central Selling Organization. Diamond prices are kept artificially stable by releasing only the number of stones the market can bear at the established high price level.

Economic

• An uncontrolled diamond market would be intensely volatile at times. Adjusting their output to the demand helps diamond producers avoid critical situations and realize higher profit margins.
• While prices of other commodities fluctuated heavily during the last 100 years, price levels for rough and polished diamonds have remained relatively stable, at a high level compared to production costs.
• Diamonds are not a necessity. In most consumers'...