Pretty green stones.

The excitement related to a recent mining discovery raises an interesting question about security and authenticity. Take this report from the BBC, for example:

The South African company says it has asked the president of the World Federation of Diamond Bourses to carry out the examination.

Experts have been sceptical about the discovery, saying the light-green stone may turn out to be a fluorite crystal.

But the firm insists it could still turn out to be a diamond.

Will the joy of the observer be lessened if it does turn out to be fluorite rather than diamond? I guess I am not a fan of diamonds to begin with, and do not really understand the fascination, so if someone told me the pretty green stone I was looking at was green fluorite I would be no less impressed. In other words, is value more tangible if it comes from complicated and obscure (even proprietary) tests or from less quantifiable expression and feeling?

Security sometimes is driven by the murky veins of marketing and sales, as explained by the Atlantic Monthly:

The diamond invention—the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem—is a relatively recent development in the history of the diamond trade. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however, huge diamond mines were discovered near the Orange River, in South Africa, where diamonds were soon being scooped out by the ton. Suddenly, the market was deluged with diamonds. The British financiers who had organized the South African mines quickly realized that their investment was endangered; diamonds had little intrinsic value—and their price depended almost entirely on their scarcity. The financiers feared that when new mines were developed in South Africa, diamonds would become at best only semiprecious gems.

The major investors in the diamond mines realized that they had no alternative but to merge their interests into a single entity that would be powerful enough to control production and perpetuate the illusion of scarcity of diamonds. The instrument they created, in 1888, was called De Beers Consolidated Mines, Ltd., incorporated in South Africa.

Fascinating. So again, what is so special about the diamond versus fluorite if not its actual appearance or properties? It seems it is the ruse of rarity.

No wonder the press is feeding on speculation about the likelihood of such a giant diamond being “possible”. A calculated control mechanism to prevent value fluctuation may be at work here, perhaps the same one that helped avert the market collapse in the 1980s predicted by the Atlantic Monthly.

As Blaise Pascal once said “We know truth, not only by reason, but also by heart.”