– The international diamond cartel led by De Beers (a South African corporation controlled by the Rothschild Bank in London) has been the most successful cartel in history, controlling the global diamond supply and prices for over a century.
– De Beers’ success has been enabled by the South African government, which nationalized all diamond mines and only granted mining licenses to De Beers and its allies, effectively enforcing the cartel.
– The diamond cartel has also been able to maintain control by persuading other global diamond producers to market their diamonds through De Beers’ Central Selling Organization.
– However, the cartel’s control is now being threatened by events in Angola, where the end of the civil war and a drought have allowed independent prospectors to access and mine diamonds outside of De Beers’ control.
– With the Angolan government unable to enforce the cartel, an estimated 50,000 prospectors have flooded the diamond-rich Cuango Valley, producing an oversupply that De Beers is struggling to buy up.
– The influx of “illegal” Angolan diamonds is forcing De Beers to take heavy losses, leading the company to cut dividends for only the second time since WWII.
– The cartel’s control mechanisms, such as production quotas, are also being threatened as individual firms may try to secretly evade the restrictions.
– The collapse of the diamond cartel would likely benefit consumers, who have been paying artificially high prices due to De Beers’ monopolistic practices.
– The diamond cartel’s success has relied on government intervention and enforcement, rather than true free market competition.
– The future of the diamond cartel is now in jeopardy, as free market forces and independent producers challenge De Beers’ longstanding control of the global diamond trade.
By Murray N. Rothbard
Moro Blanco 
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