Thanks to Kevin Kelly’s list of the 100 Best Magazine Articles Ever, I came across this 1982 Atlantic article, “Have You Ever Tried to Sell A Diamond?” by Edward Jay Epstein.

Most of the controversy today attached to De Beers seems to be its alleged financial role in propping up African strife. Hence the term, conflict, or “blood diamonds“. De Beers supported reforms for conflict-free diamonds, though that didn’t stop Leo DiCaprio’s “Blood Diamond” from being made.

But Epstein’s article was written in 1982, before much of the African conflict that led to diamond-for-arms selling, and so the ~10,000 word piece is all about De Beers’ unparalleled ability to drive consumer demand for diamonds, a scheme that – minus the death and suffering – is as unsettling as the idea of inadvertently propping up Third World conflicts.

During the “Blood Diamond” movie uproar, the NYT’s Donald McNeil Jr. wrote that “creating new markets is the genius of DeBeers. Getting African-American men to wear bling works for them as well as their 1950’s campaigns to get Japanese brides to demand solitaires.” The creation of the latter market makes up one of the most interesting sections in Epstein’s 1982 article, as he describes how De Beers turned post-war Japan into the second biggest market for diamonds.

Until 1959, Epstein writes, Japan hadn’t even allowed for diamonds to be legally imported. In 1967, when De Beer’s began its campaign, only 5 percent of Japanese brides received diamond rings. In 14 years, Epstein writes, that percentage rose to 60 percent.

Their strategy? Good ol’ Euro/Western-envy:

Until the mid-1960s, Japanese parents arranged marriages for their children through trusted intermediaries. The ceremony was consummated, according to Shinto law, by the bride and groom drinking rice wine from the same wooden bowl. There was no tradition of romance, courtship, seduction, or prenuptial love in Japan; and none that required the gift of a diamond engagement ring. Even the fact that millions of American soldiers had been assigned to military duty in Japan for a decade had not created any substantial Japanese interest in giving diamonds as a token of love.

J. Walter Thompson began its campaign by suggesting that diamonds were a visible sign of modern Western values. It created a series of color advertisements in Japanese magazines showing beautiful women displaying their diamond rings. All the women had Western facial features and wore European clothes. Moreover, the women in most of the advertisements were involved in some activity — such as bicycling, camping, yachting, ocean swimming, or mountain climbing — that defied Japanese traditions. In the background, there usually stood a Japanese man, also attired in fashionable European clothes. In addition, almost all of the automobiles, sporting equipment, and other artifacts in the picture were conspicuous foreign imports. The message was clear: diamonds represent a sharp break with the Oriental past and a sign of entry into modern life.

I had always thought that diamonds were the pinnacle of a frivolous consumerism: it’s a rock. And not even that practical when compared to other fashion accessories. But I would’ve chalked my attitude up to being a cheap bastard who, if I had the money, would blow it all on a fancy diamond just to show everyone that hey, I really do love my fiancee, and here’s the giant, extremely valuable ring to prove it.

But, according to Epstein, diamonds weren’t even all that rare or precious. From the time De Beers became big, to when Epstein’s article was written, the company has had to devise some amazing marketing campaigns to assure buyers that diamonds would always be valuable. The most well-known of these initiatives was the “Diamonds are forever” campaign, named by AdAge has the best slogan of the century and still used today.

As Epstein wryly notes, “diamonds can in fact be shattered, chipped, discolored, or incinerated to ash” but the mantra, besides affirming the permanence of the rock (and by association, the relationship in which it was given), pushed the idea that diamonds should not be resold.

And so anyone who tried to resell their diamonds, Epstein wrote, would find that in some cases, they would’ve gotten a better return on investment by stuffing money under their mattresses. In one notable experiment, a magazine bought £400 worth of diamonds. Nine years later, the highest price those diamonds fetched, when adjusting for inflation, was £167…a nearly 60% drop in value.

The magazine tried the experiment again, with a larger gem and in a one-year period. The gem’s resale value dropped 25 percent. When they tried reselling an even more expensive gem, purchased one week earlier, their loss was 62 percent (again, to repeat, in one week).

Even stealing diamonds was a terrible scheme; in one case, a thief got only $200 for diamonds insured at $50,000.

So with millions of carats entering the market each year, and with very few of existing diamonds being sold or destroyed, how did De Beers keep the price up? Just brilliant marketing. For older married women who needed to be reminded how much they were loved, there was the “eternity ring,” encrusted with as many as 25 small diamonds. Why small diamonds? Because De Beers needed to handle the influx of the smaller rocks coming from the Soviet Union, according to Epstein. The unintended consequence of De Beers convincing women that size didn’t matter was, amusingly enough, a setback to sales of large diamonds.

At the time Epstein’s article was published, De Beers was reportedly scrambling to buy up the world’s supply with diamonds as more sources were being found. Epstein concluded that the company and its “diamond invention” might “disintegrate and be remembered only as a historical curiosity.”

Clearly, since 1982 when Epstein published, this hasn’t happened. Despite being hit hard by the global recession, De Beers recently posted a 74 percent increase in year-to-year sales, with net earnings of $255 million (this graphic purports to show a relatively stable price for diamonds). The supply seems to be as strong as when Epstein wrote, with De Beers predicting that they’ll produce 40 million carats next year.

If we lowball the world’s annual output of diamonds at about 100 million carats per year, that means ~3 billion carats of diamonds have been produced since Epstein wrote, entering a marketing ecosystem in which it is taboo to destroy or resell diamonds. And, judging by the most cursory of Google searches, those old diamonds aren’t getting any more valuable.

I’ve only summed up a small part of Epstein’s article. It only gets better; read the entirety of it here. Also, The Atlantic’s Stuart Reid, in 2006, mentioned Epstein’s piece in a roundup of other Atlantic articles about diamonds and the trouble they’ve caused in Africa.

Visit Epstein’s homepage to read the book version of The Atlantic’s piece.