22 KiB
Selling Diamonds is Harder than You Think
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Author: u/xamueljones My arch-enemy is entropy*
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URL: http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/304575/
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Score: 10
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Created: 2015-01-17T16:58:45
Post:
Comments:
u/itisike [+5] Dragon Army (9 hours later)
Let's see, 30 year old article, diamond industry still exists and prices are not "crash level" yet.
Predicting the future is hard.
u/whywhisperwhy [+2] (11 hours later)
Absolutely. Although to be fair it seems like there was a small crash in the 80s, DeBeers was just able to reassert control.
Actually, in the comments to that article there was a link to a decent piece on timeline picking up after the OPs article finishes. Worth a read if that article left you curious about what happened in those 30 years.
u/xamueljones [+2] My arch-enemy is entropy (4 minutes later)
I'm mainly posting this link to see what /r/rational thinks of this monopoly, since the process of moving into a post-scarcity society would cause large companies to logically act like this to maintain their money-making monopolies.
For further discussion, how would you sell your secret stash of diamonds when they are not really that rare, but it's common knowledge only among people who have the resources to buy them?
u/JackStargazer [+5] Primordial Apologist (an hour later)
Debeers is really an outlier though. Never before or since has a complete and utter monopoly been tied to an almost universally pervasive meme that reinforces the monopoly.
Most new goods now are designed for a consumer market, which involves buying and selling and in some cases planned obsolescence.
But on the other end of Debeers is Aluminum.
Aluminum use to be rarer than platinum. When foreign royalty visited the court of Louis XVI, they were served on plates of aluminum, with platinum being used for mere dukes.
Still, even with the incredible cost, the small amount meant that the total value of the market was limited. Only a few small number of people could afford it, and there was little movement in the trade.
Then it was discovered that you could inexpensively extract aluminum from bauxite ore, and the price crumbled to the point that it is almost disposable now.
But the outrageous growth in supply means that, worldwide, the market for aluminum has actually grown exponentially - even adjusting for inflation it's easily a hundred thousand or a million times larger.
So, a loss of scarcity actually created a larger market, and enabled applications that would never have been considered before.
This is the same thing I expect to happen to gold and platinum when asteroid mining becomes viable and effective. There is more platinum in a single asteroid rich in it then has been mined on earth in the history of mankind. While this would crash the price, it will open up enormous opportunity to exploit the material in ways that never would have been cost effective before.
u/kaukamieli [+5] (2 hours later)
in some cases planned obsolescence.
I was kinda gonna ask if this thing was just a conspiracy theory thing or if there is any actual evidence of this and then I remembered I'm a total dunce and I just read about fucking DRM in cat litter box.
https://medium.com/@jorge_lo/the-future-a-cat-litter-and-drm-6dbda26428f8
I mean, it's not quite the same think as making it break sooner, but it's not far off and even that actually happens with printers.
u/None [+2] (7 hours later)
Planned obsolescence is a thing that exists. I'm on my phone, so I can't provide links, but look into the lifespan of old-timey lightbulbs compared to modern ones. Of course with LEDs that's maybe not a very relevant example. Cartridge printers are another example you could look into.
Non-jeans clothing found at big stores could also be seen as an example, provided you don't care about fashion.
u/kaukamieli [+1] (9 hours later)
Yea like I said, I know about the printers. The lightbulbs though, there is that single one hundred year exception, got others?
u/Farmerbob1 [+1] Level 1 author (10 hours later)
Another example of planned obsolescence? Appliances. My mother owned a 1960 RCA Whirlpool Imperial washing machine. That machine did 3 or more loads of laundry every single day for 42 years. The reason it was eventually sent to the scrap heap? The tub finally got a leak. We actually managed to get a NEW replacement tub in a 40+ year old box, but I couldn't get the retaining nut that was at the top of the tub off, because the thing had welded itself in place. I didn't have a proper heating torch to get it off, nor a shop to play with it.
These days, a washing machine that sees heavy use is likely to last maybe 5-7 years. That way they can sell us another one.
If Appliance engineering had advanced like automobile engineering, we'd get 100 years of service out of a good washer.
u/kaukamieli [+3] (17 hours later)
Yea, except that there is no evidence whatsoever on appliances. Sure, they don't last as long. They also have way more fancy electronics to make them better, and they are cheap, because cheap sells.
With cars, there is the safety thing which is why lots of people like to use newer and bigger cars. There is demand for expensive cars for good reason. There is less reasons to buy expensive appliances.
If it's "planned" obsolence, there has to be evidence of intent. With printers, we have parts that are programmed to not work after certain amount of uses.
u/Farmerbob1 [+3] Level 1 author (19 hours later)
Looking here: http://en.wikipedia.org/wiki/Planned_obsolescence one can see that we are both correct.
What you are referring to is "Programmed Obsolescence" and what I am referring to is "Lifetime-limiting Design." They are both variants of planned obsolescence.
A very good example of programmed obsolescence is throwaway digital cameras. There's no reason that they need to be throwaway. Sure, they would be a tiny bit more expensive if they could be re-used, and their lifetime would be short due to cheapness of design, but you could certainly get more than a few pictures out of one if you were careful. Cellphone cameras currently make this a non-issue in most countries where you might be reading this from, but if you remember back to the dawn of cheap digital photography, there were lots of disposable digital cameras. I would not be surprised if you could find them in first world countries still.
u/autowikibot [+1] (19 hours later)
#####
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#### Planned obsolescence:
Planned obsolescence or built-in obsolescence in industrial design is a policy of planning or designing a [product](https://en.wikipedia.org/wiki/Good_(economics)) with an artificially limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time. The rationale behind the strategy is to generate long-term sales volume by reducing the time between repeat purchases (referred to as "shortening the replacement cycle").
Firms that pursue this strategy believe that the additional sales revenue it creates more than offsets the additional costs of research and development and opportunity costs of existing product line cannibalization. The rewards are by no means certain: in a competitive industry, this can be a risky strategy because consumers may decide to buy from competitors.
Planned obsolescence tends to work best when a producer has at least an oligopoly. Before introducing a planned obsolescence, the producer has to know that the consumer is at least somewhat likely to buy a replacement from them. In these cases of planned obsolescence, there is an information asymmetry between the producer – who knows how long the product was designed to last – and the consumer, who does not. When a market becomes more competitive, product lifespans tend to increase. [citation needed] For example, when Japanese vehicles with longer lifespans entered the American market in the 1960s and 1970s, American carmakers were forced to respond by building more durable products.
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^Interesting: ^Obsolescence ^| ^Planned ^Obsolescence: ^Publishing, ^Technology, ^and ^the ^Future ^of ^the ^Academy ^| ^Overconsumption ^| ^Brooks ^Stevens
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u/kaukamieli [+1] (20 hours later)
Sure, but "lifetime-limiting design" might as well happen because it's cheap and that's what consumers want. I'm not saying the stuff could not be built better. I'm saying there doesn't have to be malicious intent in this.
edit: and I'm still talking mosty about the appliances like washing machines and stuff. Sure, disposable digital cameras are stupid.
u/Farmerbob1 [+2] Level 1 author (20 hours later)
Ah, in my opinion, it is very close to malicious to intentionally design products to be built to a lower standard. I do recognize that others do not necessarily share this mindset.
If there were a range of appliances offered with large differences in durability and cost, then I could believe that it was consumer choice driving the market. There really aren't though. Very few appliances of any type are designed to last more than a few years. When you go to buy an appliance, you don't have a choice to buy a 50-year model or a 5-year model. Not all customers want cheap appliances, but that's all that is offered.
u/kaukamieli [+1] (20 hours later)
I have this feeling that when they started offering cheaper less solid things, people wanted them, and thus we don't anymore have the "old good ones".
If you are sure they'd be a success, why not put up a business around them? :)
u/Farmerbob1 [+1] Level 1 author (21 hours later)
Engineering of a product is more than just designing it once, and then taking it to a fabrication shop and making it happen.
For years, the appliance industry adjusted it's designs based on what was failing. If X failed on a regular basis after a short time, a design alteration was required to address that failure.
These days, it's the opposite. The appliance industry adjusts it's designs based on what is NOT failing. If, after 5-7 years or so, there are very few reports of failure of X, that means that X and/or the components that support X can be engineered to a lower standard because it exceeds the planned life of the appliance.
Starting an appliance business that would immediately become a priority lawsuit and talent-poaching target of every single competitor on the market after they understand the goals of the company is FAR from anything that I'm interested in. There are not very many appliance manufacturers in the world. It's not as far from the OP's example of DeBeers as most people believe.
u/derefr [+1] (4 days later)
The comparison of diamonds to aluminum is making me picture smartphones with the entire shell (including the screen) being one continuous piece of diamond. Doesn't seem like a half-bad idea.
u/kaukamieli [+4] (2 hours later)
The monopoly is great at manipulating people. People think natural diamonds are somehow better than lab made, because they are "real". Even when lab made are perfect and purer than "real" diamonds.
I've been thinking I should buy a shitload of lab made diamonds, rubies, sapphires and emeralds at least for counters for board games. And to fill some pouches for cosplays, giveaways and other fancy things.
not really that rare, but it's common knowledge only among people who have the resources to buy them?
Except that because of internet lots of people know about it. And people who can afford big ones might not know or care. It's a status symbol now regardless of it's value. It's a fucking diamond.
how would you sell your secret stash of diamonds
I'd fill a bathtub with them, go in myself, and make a viral video of them! "Wanna buy a diamond? Well below the 'market price'." Then I'd rise from the tub and have diamond underwear on for everyone's surprise.
Yeaaa maybe I'd just wanna show off instead of selling them.
u/xamueljones [+2] My arch-enemy is entropy (4 hours later)
Ow, ow, ow...my throat hurts from laughing so hard at your comment. Can I have a diamond to soothe my pain?
u/kaukamieli [+2] (5 hours later)
Glad to make someone's day better. :) Too bad I got none of those diamonds. :(
u/eaglejarl [+3] (52 minutes later)
There are "we buy diamonds and gold" stores everywhere. They give you only a fraction of the value, of course, but converting diamonds into quick cash isn't hard.
u/kaukamieli [+2] (2 hours later)
I think the question means that if you were Debeers and had this mountain of diamonds. I don't think those shops could handle that volume, so better to sell them bit by bit.
What other uses do diamonds have than drilling and breaking stuff?
u/Izeinwinter [+2] (7 hours later)
They have very nifty thermal, optical and mechanical properties. A cheap way to mass produce them would be a very large boon to engineering. At the current price point.. not so many uses justify that cost.
u/kaukamieli [+3] (7 hours later)
So if the monopoly would collapse and diamonds would become dirt cheap, how much could things get better, from that engineering point of view?
u/Izeinwinter [+1] (17 hours later)
Mined stones are small, which limits the market to small optics - better cellphone cameras, basically - and the semi-conductor industry, which could find uses for debeers entire hoard easily enough. Synthesis is the holy grail here not just because it is cheaper, but because it gets you diamonds in large sizes, which expands potential uses enormously.
u/Bowbreaker [+1] Solitary Locust (a day later)
At the current price point.. not so many uses justify that cost.
I thought artificial diamonds weren't that expensive to make?
u/Izeinwinter [+1] (2 days later)
Compared to the price of mined gems, no. Compared to glass and carbon composites? They kind of are. Mostly however, the limit on use is currently that we can only make them in very limited sizes and shapes. If you want a scalpel sized blade or an aperture window for a laser, then sure, that can be made in diamond. Lenses for eyeglasses, however? No can do. Heck, "we can't make them large enough" is a major limit on synthetic diamond for use in semi-conductors.
u/eaglejarl [+1] (6 hours later)
Ah. I understood the referent in "how would you sell" to mean me, not DeBeers. My bad.
u/lsparrish [+0] (10 hours later)
Diamonds are extremely good thermal conductors. Copper (extremely good for a metal) is 400 W/m.k, whereas diamond is 2200. So you could use it as a heat exchanger in most applications where copper is. Diamond is also corrosion resistant, so you can use it in seawater. It could also be used as a building material, if you have enough of it. Structures could be much taller than steel structures due to the better strength to weight ratio. Shaping it as desired might be difficult, but there are laser based approaches to cutting, welding, sintering, etc.
u/Draconomial [+2] Sunshine Regiment (a day later)
Ooooh, I want a diamond CPU heatsink! Oh, and it turns out that we do make thermal compound out of diamond, yay!
And after further research, I now know that graphite heat sinks are a thing.
u/Sceptically [+1] (12 hours later)
I don't think diamond is tough enough to make a good structural material in building.
u/lsparrish [-1] (13 hours later)
It's one of the strongest naturally occurring substances.
Edit: Toughness is something else, which typically relies on a balance of strength and ductility.
u/rationalidurr [+1] If fighting is sure to result in victory, then you must fight! (15 hours later)
Diamonds are brittle though, The harder a material is the less likely it is for it to deform under force and the more likely it is for it to break. I think that's what /u/Sceptically was referring to.
Limited knowledge of material properties from high-school and internet searches are my source so I could be wrong.
u/lsparrish [+1] (2 days later)
Yes, they are more brittle than steel, but is toughness/brittleness actually the limiting factor on construction? What evidence do we have of that? Concrete and glass are more brittle than steel as well (possibly more so than diamond), yet often play a structural role in large buildings despite this.
Perhaps the ideal way to use diamond supports would be something like a tensegrity structure. The primary shock absorbers would be the cables, which could of course be something with ultra-high tensile strength (diamond nanothreads, carbon nanotubes, carbon fiber, etc). The diamond supports might also be separated by a thin layer of steel, aluminum, etc, or maybe even a pneumatic shock absorption system. As long as no sudden shock hits the diamond pieces, the structure is safe.
It would also likely be best to use pure synthetic diamond rather than natural diamond, as brittleness is partly tied to flaws in the structure.
u/autowikibot [+1] (2 days later)
#####
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#### Tensegrity:
Tensegrity, tensional integrity or floating compression, is a structural principle based on the use of isolated components in [compression](https://en.wikipedia.org/wiki/Compression_(physical)) inside a net of continuous [tension](https://en.wikipedia.org/wiki/Tension_(mechanics)), in such a way that the compressed members (usually bars or struts) do not touch each other and the prestressed tensioned members (usually cables or tendons) delineate the system spatially.
The term tensegrity was coined by Buckminster Fuller in the 1960s as a portmanteau of "tensional integrity". The other denomination of tensegrity, floating compression, was used mainly by Kenneth Snelson.
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^Interesting: ^Tensegrity ^(Castaneda) ^| ^Cloud ^Nine ^(tensegrity ^sphere) ^| ^Crown ^of ^Thorns ^(woodworking) ^| ^Cleargreen ^Incorporated
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u/Sceptically [+1] (a day later)
It's one of the hardest. Toughness is a different thing. As /r/rationalidurr mentioned it's quite brittle.