Israel's diamond industry has a bloody history

• Author: MORDECHAI BECK
• Published date: 13 October 2021
• Publication title: Jerusalem Post, The: Web Edition Articles (Israel)

To understand this some background is necessary.

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For some centuries diamonds were manufactured in the East, principally in India. Then, in the 18th century, India ran out of raw materials. Up to then, these precious jewels were the province of the very rich. Then in the middle of the 19th century, raw diamonds were discovered in southern Africa. Lots of them. In 1871, Cecil Rhodes (the English-born businessman and politician of South Africa) with the help of the Rothschild family, began the business with the De Beers family at the Kimberly Mines. In 1914, another business was started by Earnest Oppenheimer, a German Jew, who bought a rich area of alluvial diamonds (found at the surface of the earth). With partners from England and America, he founded the Anglo-American Corporation. In the 1920s, Oppenheimer felt strong enough to buy out De Beers. He threatened to flood the market with diamonds unless they agreed to make him Chairman of De Beers. They agreed and made him Chairman in 1929.

Though these are early years, this move set a pattern of what the industry would do from then on. Whenever there was a threat to the industry, De Beers (Oppenheimer kept the name) would make an offer to the would-be disturber, that was difficult to refuse. In fact, both sides in the negotiations could see that De Beers' strategy would be beneficial to everyone concerned – since the market value of the product would be maintained. This is the constant goal at the center of the business and for one clear reason. The fact is that there are more than enough diamonds in the world to be enjoyed by everybody. Anywhere, in fact, where carbon is found is likely to produce the raw material at the base of the industry. What De Beers did was in fact to keep the price of diamonds high by consistently restricting the supply. Although it is easy to blame them, it is obvious that most of those involved worldwide in the discovery, manufacturing and selling of these stones agreed with their philosophy. Greed conquers all.

Nevertheless, this monopoly situation had meant that De Beers were and are, officially at least, not allowed to practice their trade in the US, where they are in contravention of the anti-trust laws. In 1945, the US Justice Department filed an anti-trust case against De Beers and its associates. This was not pursued for technical reasons. But in practice, of course, the move against them was more in the realm of fiction, since anyone who is anyone in the industry pays allegiance to De Beers' central office in London. What goes...