8 ms·

What is the difference between a diamond and an expensive handbag or other accessory? If a thing is worth what people pay, how come diamonds are a scam and oth

What is the difference between a diamond and an expensive handbag or other accessory? If a thing is worth what people pay, how come diamonds are a scam and other items not? I have a hard time grasping this everytime an anti-diamond article pops up. I can see the logic in not using that kind of money on a ring, but not what's so special about the price/scarcity/fashion of diamonds compared to other luxury goods.

kuschku 8y ago
Natural diamonds are exactly the same as synthetic ones. Except you have to pay much more, and people have to suffer unnecessarily in mines for it.
starbugs 8y ago
Who said that other items are not a scam as well? I think the point the author is trying to make is that you can invest your money more wisely if you buy something that retains its value instead of depreciating drastically the moment you close the transaction.
charlesdm 8y ago
Just another guy pointing out WHY they're a ripoff. Most luxury goods are "ripoffs" (from a financial point of view). Yet plenty of people love buying luxury items for the feeling it gives them and the experience, and because the item (in comparison to a non luxury item) is still much better. Nothing wrong with that in my view. Personally I don't share they view they're a ripoff, but to each their own. Have you ever bought a mechanical watch? I have, and I loved the experience -- from researching and exploring it, to visiting a few jewellers, to getting a good deal, to finally getting the item. I look forward to the day when I can buy my (to be) wife amazing pieces of jewellery, regardless of the price.
- deleted 8y ago
  [deleted]
- stinos 8y ago
  Yet plenty of people love buying luxury items for the feeling it gives them For me that is the huge rip-off next to the financial part: for a lot of these luxury items the extra money doesn't get you proportionally more or better functionality nor quality (2 things which are imo actually worth money since they give you something practical and useful back). It's often more about looks and how it feels. But do the people really care about the looks themselves, or rather how they are perceived by others? And is that really worth pursuing? And does buying a feeling really work and how long does this feeling last? Also is the feeling 'real' or is it just made-up in the end because culture tells you it's like that?
  - charlesdm 8y ago
    Why would it be a rip off? You act as if 'overcharging' for something is always a rip off. If I'm walking in a desert without water.. I'll likely be billing to pay (a lot) more than if I had a bottle with me. Luxury goods often have more price elasticity compared to other items, but they still deliver value to the people buying them. Not that you need an entire Louis Vuitton collection, but splurging can be fun. It's really not your call to make whether spending on luxury items is worth pursuing -- depends on how high your income and wealth is. Also: perception is everything in the world. Someone who is well dressed is generally taken more seriously than the same person in a hoodie and wearing sweatpants.
    - stinos 8y ago
      You act as if 'overcharging' for something is always a rip off. Syntactically those 2 terms indeed have a similar feel to them - 'over' doesn't have a good connotation in 'overcharging'. But I'm not sure why you think I consider them to always be equivalent, I don't. they still deliver value to the people buying them It's exactly the worth of that (perceived) value I was questioning. It's really not your call to make whether spending on luxury items is worth pursuing -- depends on how high your income and wealth is. You're not claiming I cannot take part in this discussion if my income isn't high enough, are you :] Anyway, rest assured: my income and wealth are such that I could buy more than a bunch of VT bags or rings with diamonds or whatever. Even more I'm no stranger to having bought overpriced luxury items in a distant past so I kind of know what I'm questioning here. Ha, it's exactly the reason I'm questioning it. But even if it were not why would I not be allowed to ask questions about other's motives? Also: perception is everything in the world Correction: a part of the world. A part which is way too big for my liking and for which I consider myself extremely fortunate I don't have to deal with it often. I want to be taken serious for who I am and not because of what I look like. Also: one can look well dressed (to whatever standard) in clothes which don't cost a dime so there's a fine line between 'well dressed' and 'expensively dressed so it must be well'.
- marklgr 8y ago
  Signaling is also a strong component of luxury; you let everyone know that you have means, good tastes, and that you belong to such and such circle. Some brands don't even bother to deliver superior quality products, they just "sell the signal" -- the term "ripoff" then feel adequate.
pfortuny 8y ago
No: it is not a scam. It is a monopoly, which is different. They are a luxury good because the inly seller makes them so, without a real motive (they are not scarce). Louis Vuitton bags are scarce by manufacture but this is not artificial.
- aunty_helen 8y ago
  The motive is profit. >Louis Vuitton bags are scarce by manufacture but this is not artificial. Are you suggesting that LV bags are scarce because for the 4000$ price range they can't figure out a way to make more bags? I would make the suggestion that their scarcity is entirely atrificial to inflate prices.
  - Guest9812398 8y ago
    > I would make the suggestion that their scarcity is entirely artificial to inflate prices. You're suggesting people pay $4,000 for a LV bag because LV is limiting their supply and they're difficult to find? I don't think that's the case. They're expensive because only LV can produce bags with their logo, and they're charging as much as people are willing to pay. Artificial scarcity might be the case for a special edition bag, or a Nike or Adidas shoe produced in a unique color with a limited run of 100 products. But, that's not the core of their business or the source of their overall higher prices. In short, LV bags are simply not scarce.
    - aunty_helen 8y ago
      >You're suggesting people pay $4,000 for a LV bag because LV is limiting their supply and they're difficult to find? I'm really not
      - Guest9812398 8y ago
        You said there's an artificial shortage of LV bags which is causing the inflated prices. I can't see any other way to interpret what you said.
- 8y ago
nizmow 8y ago
I'm not sure you read the article. It's not about the wearing of diamonds in itself, but more the shady business practices of diamond companies and the awful conditions of diamond mines.
pjc50 8y ago
Handbags don't get quite as many people killed in the process of their manufacture and shipment. There's a real problem with conflict diamonds. Even if you buy one with a non-conflict pedigree, you're still supporting the price.
- ngngngng 8y ago
  Non-conflict pedigrees are a scam. There's no way to track diamonds and prove a particular diamond came from a non conflict mine.
giancarlostoro 8y ago
The other thing is: sentimental value. People have been proposed to with diamond rings and the truth is, they're not looking for make a profit from said diamond, if the value drops to nothing it's still a symbol of their marriage and a basis for the beginning of memories leading up to their marriage and so on. Sentimental value is worth more than diamonds. I say this having proposed with a diamond ring knowing I may be somewhat annoyed if I found out it was worthless tomorrow, but it wont take it away, it's not like we plan on selling it off someday or something.
FrozenVoid 8y ago
>What is the difference between a diamond and an expensive handbag or other accessory? There is no 'expensive handbag' cartel enforcing artifical scarcity and preventing resale of used handbags.
stfwn 8y ago
There is no difference. This article might as well be about expensive handbags or colleges, but it so happens it's not. The underlying idea is to rethink what you spend your money (i.e. your time) on so that you get the most out of it for you. For me the underlying principles boil down to two main ideas: * Priorities. I personally value a great laptop over a great rug and a nice piano over a nice couch, so I will adjust my spending accordingly. This works within categories as well; I would value what the stone is/does materially over what the stone is/does culturally. * Consider diminishing returns. When making a buying decision I look at what is available in the category and what the value for money curve looks like. A phone that costs 400 bucks is a significant upgrade over one that is 200, but adding another 200 won't bump the specs as much. This is not to say I'd never buy the more expensive stuff, but only if I prioritize it accordingly.
danielbarla 8y ago
One difference is that nobody thinks that they should invest vast amounts of money in handbags, with the explicit promise that handbags are eternal and an implied promise that you will be able to convert it back to money at a trade in of roughly 1 to 1, if you need to.
coldtea 8y ago
>What is the difference between a diamond and an expensive handbag or other accessory? Usually there's way less war, slave and child labor involved in the making of a handbag.
- tssva 8y ago
  I'll concede less war. The production of fashion goods including luxury handbags involves a pretty good amount of slave and child labor.
  - coldtea 8y ago
    Depends on the brand. Luxury handbags are also wholly made in the US, France, Italy, and so on, in anything like slave and child labor situations... (Besides even the worst sweatshop is probably better than the best mine).
jdietrich 8y ago
De Beers have spent most of a century convincing people that a large diamond is a mandatory part of an engagement proposal. You mightn't be affected by this propaganda campaign, but a lot of people are. Lots of other luxury goods are bullshit, but none of them are marketed as an essential part of a normal life. Nobody feels under pressure to buy a Louis Vuitton handbag or a Rolex watch just to get engaged. De Beers have effectively re-invented the dowry, with the significant difference that unlike diamonds, cattle or gold keep their resale value.
paulgb 8y ago
Diamonds have pretty effectively been marketed across the class spectrum as something you have to buy to get engaged, to the point of the "two month (salary) rule" being a thing. Other luxury goods don't have that.
- rusk 8y ago
  Flowers when I mess up ... handbag when I really mess up ... cards flowers and chocolates on valentines day ... chocolate at Easter ...
branchless 8y ago
Artificial scarcity in watches https://www.theguardian.com/business/2018/may/18/richemont-destroys-nearly-500m-of-watches-in-two-years-amid-buyback-policy https://www.theguardian.com/business/2018/may/18/richemont-d...
deleted 8y ago
[deleted]
sametmax 8y ago
The selling pitch. Nobody is saying your designer handbag is naturally rare. They explicitly say "we produce it in a small number so that it's exclusive".
dreamfactored 8y ago
Luxury goods prices are largely related to the cost of production in the form of quality rather than any other form of scarcity. The question they answer is 'what is the very best product possible?' Luxury leather bags for example have a huge degree of craftmanship (which is why fakes are mostly lousy and very distinguishable). This is why they become a well-known brand in the first place - it's a mark of quality in design and production. Rimowa is an example where they have had to constantly innovate in order to maintain a quality edge. Service is another area - if you buy a Hermes silk tie, you can get it cleaned and pressed for life for free at any Hermes shop in the world (cleaning and pressing silk ties is incredibly hard and they often get destroyed by dry cleaners). The problem occurs when the brand itself becomes the cash cow as a result of this consistency in quality, and businesses start to exploit this. They will usually slap their brand on an outsourced production line product and charge a premium. Occasionally that might be justified by the product having a great distinguishing design to compensate but often it's not the case - and that's where we start to think of it as a bit of a scam. An example is Church's Shoes. From 1873, they were around the highest quality brogues in the world available at any price (short of bespoke shoes) and were handmade in workshops in Northampton. In the 1990s Prada bought them and started transferring production of all but a top end line to Italy, where the shoe manufacturing was partly automated and inferior. Unless you are buying the handmade bench grade shoes, you are now paying extra for the name and probably being a bit of a mug unless you are very attached to the particular design. Now that brand is tarnished for the high end shoe market and dependent on consumer ignorance for the rest. (As a sidenote, a lot of the craftspeople who worked for Church's before the takeover moved to the other Northampton shoe makers who used to be considered lesser quality and some of those brands are slowly moving into the luxury end as a result of the quality improvements.) I will very happily buy a nobrand or knockoff where there is no functional difference or the price tradeoff doesn't justify the difference, but often top end goods can justify their price.
obelix_ 8y ago
No difference. Just that mindless consumption culture turns people with brains into ants running an ant hill. So there will always be opposition.
tcgv 8y ago
One big difference is that many men feel obligated to buy expensive diamond engagement rings to their pretenders to "show his love", i.e., the three salary rule[1]. This kind of cultural/social pressure was built from a long history of, one could say brilliant, marketing campaigns. [1] https://www.financialsamurai.com/the-new-rule-for-engagement-ring-buying/ https://www.financialsamurai.com/the-new-rule-for-engagement...
auganov 8y ago
It's a valid point but diamonds are definitely a bit different. Luxury fashion items are differentiated. Most of the time they don't have identical substitutes. And when they do they might be hard to get and illegal. Diamonds are much more pure in how few effects make for its value. The point is - I don't think anti-diamond crusaders are being randomly selective.
lucideer 8y ago
> What is the difference between a diamond and an expensive handbag or other accessory? They're technically equivalent, but not equal. Both are artificially scarce, don't have a high intrinsic or practical value relative to other products that serve equivalent practical purposes. Both are produced by very large, sometimes monopolistic entities. Diamonds are different because: 1. Normal fashion -vs- concerted De Beers ad campaign Demand for bags is largely governed by fashion, which—while it may confound some, and is certainly artificially controlled/steered by large commercial entities—is at least a somewhat organic thing that: - (a) has a long human tradition - (b) has some variance over time - (c) at least slightly various across the general mainstream population according to personal taste Demand for diamonds on the other hand is a recent, deliberate invention by a single entity and is quite consistent across the relative diversity of individuals in (western) mainstream populations. 2. Scale of external social pressure Social pressure to have a fashionable, authentic, labelled bag is relatively high for a certain subset of the population, it pales in comparison to multiple generations of family members relentlessly obsession over the most important day of your life on your behalf.
dalbasal 8y ago
No difference between a diamond and an expensive handbag, inherently. Diamonds are just a very illustrative & extreme example of that. For example, engagement rings. The custom puts an alarming number of people into financial bother for no "real" reason. The fact that both the custom and the value of the gem are "fake" or at least fictional is easier to demonstrate for diamonds than it is with gold, Gucci handbags or Harvard education. Gold is at least valuable in the money sense. It has a market price. Diamond pricing is much more opaque. The custom was also invented in recent memory, unlike the custom of costly weddings which can also be an unreasonably burdensome but non-negotiable bit of culture. Both are customs. Both are invented. Both can be bad. Both (as industries) have a get-in-debt economic norm fattening it. But the diamond example is just more illustrative. More fake. Lots of industries have horrible labour practices in countries where they can, but diamonds are an illustrative case for this too..
known 8y ago
Resale value?
mlrtime 8y ago
At least with a Chanel bag you can often sell it for the price you paid (with inflation) if you keep good care of it for years. I know this anecdotally. Since there is no scarcity in diamonds you are lucky if you get 50% back.

kuschku 8y ago

Natural diamonds are exactly the same as synthetic ones. Except you have to pay much more, and people have to suffer unnecessarily in mines for it.

starbugs 8y ago

Who said that other items are not a scam as well? I think the point the author is trying to make is that you can invest your money more wisely if you buy something that retains its value instead of depreciating drastically the moment you close the transaction.

charlesdm 8y ago

Just another guy pointing out WHY they're a ripoff. Most luxury goods are "ripoffs" (from a financial point of view). Yet plenty of people love buying luxury items for the feeling it gives them and the experience, and because the item (in comparison to a non luxury item) is still much better. Nothing wrong with that in my view. Personally I don't share they view they're a ripoff, but to each their own. Have you ever bought a mechanical watch? I have, and I loved the experience -- from researching and exploring it, to visiting a few jewellers, to getting a good deal, to finally getting the item. I look forward to the day when I can buy my (to be) wife amazing pieces of jewellery, regardless of the price.

deleted 8y ago
[deleted]
stinos 8y ago
Yet plenty of people love buying luxury items for the feeling it gives them For me that is the huge rip-off next to the financial part: for a lot of these luxury items the extra money doesn't get you proportionally more or better functionality nor quality (2 things which are imo actually worth money since they give you something practical and useful back). It's often more about looks and how it feels. But do the people really care about the looks themselves, or rather how they are perceived by others? And is that really worth pursuing? And does buying a feeling really work and how long does this feeling last? Also is the feeling 'real' or is it just made-up in the end because culture tells you it's like that?
- charlesdm 8y ago
  Why would it be a rip off? You act as if 'overcharging' for something is always a rip off. If I'm walking in a desert without water.. I'll likely be billing to pay (a lot) more than if I had a bottle with me. Luxury goods often have more price elasticity compared to other items, but they still deliver value to the people buying them. Not that you need an entire Louis Vuitton collection, but splurging can be fun. It's really not your call to make whether spending on luxury items is worth pursuing -- depends on how high your income and wealth is. Also: perception is everything in the world. Someone who is well dressed is generally taken more seriously than the same person in a hoodie and wearing sweatpants.
  - stinos 8y ago
    You act as if 'overcharging' for something is always a rip off. Syntactically those 2 terms indeed have a similar feel to them - 'over' doesn't have a good connotation in 'overcharging'. But I'm not sure why you think I consider them to always be equivalent, I don't. they still deliver value to the people buying them It's exactly the worth of that (perceived) value I was questioning. It's really not your call to make whether spending on luxury items is worth pursuing -- depends on how high your income and wealth is. You're not claiming I cannot take part in this discussion if my income isn't high enough, are you :] Anyway, rest assured: my income and wealth are such that I could buy more than a bunch of VT bags or rings with diamonds or whatever. Even more I'm no stranger to having bought overpriced luxury items in a distant past so I kind of know what I'm questioning here. Ha, it's exactly the reason I'm questioning it. But even if it were not why would I not be allowed to ask questions about other's motives? Also: perception is everything in the world Correction: a part of the world. A part which is way too big for my liking and for which I consider myself extremely fortunate I don't have to deal with it often. I want to be taken serious for who I am and not because of what I look like. Also: one can look well dressed (to whatever standard) in clothes which don't cost a dime so there's a fine line between 'well dressed' and 'expensively dressed so it must be well'.
marklgr 8y ago
Signaling is also a strong component of luxury; you let everyone know that you have means, good tastes, and that you belong to such and such circle. Some brands don't even bother to deliver superior quality products, they just "sell the signal" -- the term "ripoff" then feel adequate.

pfortuny 8y ago

No: it is not a scam. It is a monopoly, which is different. They are a luxury good because the inly seller makes them so, without a real motive (they are not scarce). Louis Vuitton bags are scarce by manufacture but this is not artificial.

aunty_helen 8y ago
The motive is profit. >Louis Vuitton bags are scarce by manufacture but this is not artificial. Are you suggesting that LV bags are scarce because for the 4000$ price range they can't figure out a way to make more bags? I would make the suggestion that their scarcity is entirely atrificial to inflate prices.
- Guest9812398 8y ago
  > I would make the suggestion that their scarcity is entirely artificial to inflate prices. You're suggesting people pay $4,000 for a LV bag because LV is limiting their supply and they're difficult to find? I don't think that's the case. They're expensive because only LV can produce bags with their logo, and they're charging as much as people are willing to pay. Artificial scarcity might be the case for a special edition bag, or a Nike or Adidas shoe produced in a unique color with a limited run of 100 products. But, that's not the core of their business or the source of their overall higher prices. In short, LV bags are simply not scarce.
  - aunty_helen 8y ago
    >You're suggesting people pay $4,000 for a LV bag because LV is limiting their supply and they're difficult to find? I'm really not
    - Guest9812398 8y ago
      You said there's an artificial shortage of LV bags which is causing the inflated prices. I can't see any other way to interpret what you said.
8y ago

nizmow 8y ago

I'm not sure you read the article. It's not about the wearing of diamonds in itself, but more the shady business practices of diamond companies and the awful conditions of diamond mines.

pjc50 8y ago

Handbags don't get quite as many people killed in the process of their manufacture and shipment. There's a real problem with conflict diamonds. Even if you buy one with a non-conflict pedigree, you're still supporting the price.

ngngngng 8y ago
Non-conflict pedigrees are a scam. There's no way to track diamonds and prove a particular diamond came from a non conflict mine.

giancarlostoro 8y ago

The other thing is: sentimental value. People have been proposed to with diamond rings and the truth is, they're not looking for make a profit from said diamond, if the value drops to nothing it's still a symbol of their marriage and a basis for the beginning of memories leading up to their marriage and so on. Sentimental value is worth more than diamonds. I say this having proposed with a diamond ring knowing I may be somewhat annoyed if I found out it was worthless tomorrow, but it wont take it away, it's not like we plan on selling it off someday or something.

FrozenVoid 8y ago

>What is the difference between a diamond and an expensive handbag or other accessory? There is no 'expensive handbag' cartel enforcing artifical scarcity and preventing resale of used handbags.

stfwn 8y ago

There is no difference. This article might as well be about expensive handbags or colleges, but it so happens it's not. The underlying idea is to rethink what you spend your money (i.e. your time) on so that you get the most out of it for you. For me the underlying principles boil down to two main ideas: * Priorities. I personally value a great laptop over a great rug and a nice piano over a nice couch, so I will adjust my spending accordingly. This works within categories as well; I would value what the stone is/does materially over what the stone is/does culturally. * Consider diminishing returns. When making a buying decision I look at what is available in the category and what the value for money curve looks like. A phone that costs 400 bucks is a significant upgrade over one that is 200, but adding another 200 won't bump the specs as much. This is not to say I'd never buy the more expensive stuff, but only if I prioritize it accordingly.

danielbarla 8y ago

One difference is that nobody thinks that they should invest vast amounts of money in handbags, with the explicit promise that handbags are eternal and an implied promise that you will be able to convert it back to money at a trade in of roughly 1 to 1, if you need to.

coldtea 8y ago

>What is the difference between a diamond and an expensive handbag or other accessory? Usually there's way less war, slave and child labor involved in the making of a handbag.

tssva 8y ago
I'll concede less war. The production of fashion goods including luxury handbags involves a pretty good amount of slave and child labor.
- coldtea 8y ago
  Depends on the brand. Luxury handbags are also wholly made in the US, France, Italy, and so on, in anything like slave and child labor situations... (Besides even the worst sweatshop is probably better than the best mine).

jdietrich 8y ago

De Beers have spent most of a century convincing people that a large diamond is a mandatory part of an engagement proposal. You mightn't be affected by this propaganda campaign, but a lot of people are. Lots of other luxury goods are bullshit, but none of them are marketed as an essential part of a normal life. Nobody feels under pressure to buy a Louis Vuitton handbag or a Rolex watch just to get engaged. De Beers have effectively re-invented the dowry, with the significant difference that unlike diamonds, cattle or gold keep their resale value.

paulgb 8y ago

Diamonds have pretty effectively been marketed across the class spectrum as something you have to buy to get engaged, to the point of the "two month (salary) rule" being a thing. Other luxury goods don't have that.

rusk 8y ago
Flowers when I mess up ... handbag when I really mess up ... cards flowers and chocolates on valentines day ... chocolate at Easter ...

branchless 8y ago

Artificial scarcity in watches https://www.theguardian.com/business/2018/may/18/richemont-destroys-nearly-500m-of-watches-in-two-years-amid-buyback-policy https://www.theguardian.com/business/2018/may/18/richemont-d...

deleted 8y ago

[deleted]

sametmax 8y ago

The selling pitch. Nobody is saying your designer handbag is naturally rare. They explicitly say "we produce it in a small number so that it's exclusive".

dreamfactored 8y ago

Luxury goods prices are largely related to the cost of production in the form of quality rather than any other form of scarcity. The question they answer is 'what is the very best product possible?' Luxury leather bags for example have a huge degree of craftmanship (which is why fakes are mostly lousy and very distinguishable). This is why they become a well-known brand in the first place - it's a mark of quality in design and production. Rimowa is an example where they have had to constantly innovate in order to maintain a quality edge. Service is another area - if you buy a Hermes silk tie, you can get it cleaned and pressed for life for free at any Hermes shop in the world (cleaning and pressing silk ties is incredibly hard and they often get destroyed by dry cleaners). The problem occurs when the brand itself becomes the cash cow as a result of this consistency in quality, and businesses start to exploit this. They will usually slap their brand on an outsourced production line product and charge a premium. Occasionally that might be justified by the product having a great distinguishing design to compensate but often it's not the case - and that's where we start to think of it as a bit of a scam. An example is Church's Shoes. From 1873, they were around the highest quality brogues in the world available at any price (short of bespoke shoes) and were handmade in workshops in Northampton. In the 1990s Prada bought them and started transferring production of all but a top end line to Italy, where the shoe manufacturing was partly automated and inferior. Unless you are buying the handmade bench grade shoes, you are now paying extra for the name and probably being a bit of a mug unless you are very attached to the particular design. Now that brand is tarnished for the high end shoe market and dependent on consumer ignorance for the rest. (As a sidenote, a lot of the craftspeople who worked for Church's before the takeover moved to the other Northampton shoe makers who used to be considered lesser quality and some of those brands are slowly moving into the luxury end as a result of the quality improvements.) I will very happily buy a nobrand or knockoff where there is no functional difference or the price tradeoff doesn't justify the difference, but often top end goods can justify their price.

obelix_ 8y ago

No difference. Just that mindless consumption culture turns people with brains into ants running an ant hill. So there will always be opposition.

tcgv 8y ago

One big difference is that many men feel obligated to buy expensive diamond engagement rings to their pretenders to "show his love", i.e., the three salary rule[1]. This kind of cultural/social pressure was built from a long history of, one could say brilliant, marketing campaigns. [1] https://www.financialsamurai.com/the-new-rule-for-engagement-ring-buying/ https://www.financialsamurai.com/the-new-rule-for-engagement...

auganov 8y ago

It's a valid point but diamonds are definitely a bit different. Luxury fashion items are differentiated. Most of the time they don't have identical substitutes. And when they do they might be hard to get and illegal. Diamonds are much more pure in how few effects make for its value. The point is - I don't think anti-diamond crusaders are being randomly selective.

lucideer 8y ago

> What is the difference between a diamond and an expensive handbag or other accessory? They're technically equivalent, but not equal. Both are artificially scarce, don't have a high intrinsic or practical value relative to other products that serve equivalent practical purposes. Both are produced by very large, sometimes monopolistic entities. Diamonds are different because: 1. Normal fashion -vs- concerted De Beers ad campaign Demand for bags is largely governed by fashion, which—while it may confound some, and is certainly artificially controlled/steered by large commercial entities—is at least a somewhat organic thing that: - (a) has a long human tradition - (b) has some variance over time - (c) at least slightly various across the general mainstream population according to personal taste Demand for diamonds on the other hand is a recent, deliberate invention by a single entity and is quite consistent across the relative diversity of individuals in (western) mainstream populations. 2. Scale of external social pressure Social pressure to have a fashionable, authentic, labelled bag is relatively high for a certain subset of the population, it pales in comparison to multiple generations of family members relentlessly obsession over the most important day of your life on your behalf.

dalbasal 8y ago

No difference between a diamond and an expensive handbag, inherently. Diamonds are just a very illustrative & extreme example of that. For example, engagement rings. The custom puts an alarming number of people into financial bother for no "real" reason. The fact that both the custom and the value of the gem are "fake" or at least fictional is easier to demonstrate for diamonds than it is with gold, Gucci handbags or Harvard education. Gold is at least valuable in the money sense. It has a market price. Diamond pricing is much more opaque. The custom was also invented in recent memory, unlike the custom of costly weddings which can also be an unreasonably burdensome but non-negotiable bit of culture. Both are customs. Both are invented. Both can be bad. Both (as industries) have a get-in-debt economic norm fattening it. But the diamond example is just more illustrative. More fake. Lots of industries have horrible labour practices in countries where they can, but diamonds are an illustrative case for this too..

known 8y ago

Resale value?

mlrtime 8y ago

At least with a Chanel bag you can often sell it for the price you paid (with inflation) if you keep good care of it for years. I know this anecdotally. Since there is no scarcity in diamonds you are lucky if you get 50% back.