The November National Geographic has spectacular picts of a gypsum cave found in a Mexico lead/silver mine: If such a cave were found like this but made of diamonds, would it be revealed or secretly destroyed? Tourist revenue from a preserved cave would be tiny relative to the revenue from carving it into diamonds for sale.
Diamonds don't form in caves. You would never find them in an environment like this.
Diamond formation is complex. I will try to dumb it down. First off, Diamond is elemental Carbon (C) that is metastable at low pressures (ie- Earth's surface) so usually the mineral with the composition of C on the surface is graphite. Anyways, starting in the deep mantle (~650 km) you have compounds like CO2, MgCO3, CCO. Mantle metasomatism (fluid movement) then moves these compounds through a transition zone into the upper mantle. This transition zone is thought to reduce (take away oxygen) these compounds and precipitate diamonds (mineral formula: C). These newly formed diamonds reside in the reduced upper mantle (~150-400 km). Reduced meaning there are low amounts of oxygen. If oxygen was present, even at these high temperatures and pressures, the C would oxidize into CO2.
So we have diamonds now, but they are realllllly deep beneath the surface. How do they get to the surface? Diamonds are brought to the surface/near-surface via kimberlitic magma tubes which are essentially direct shots from the upper mantle to the surface. Mantle plumes if you will. So they are found as crystals in rocks basically. Interestingly enough, diamonds are typically one age (lets say 1.5 billion years old), the kimberlite magma is (lets say ~250-30 million years old), and these magmas are emplaced onto stable continents that are roughly 2.5 billion years old. We have these old continents, fairly old diamonds, and young magma...meaning the diamonds must reside in that upper mantle for quite some time.
"What purpose does a market HAVE, if not to allocate resources according to demand?"
... and you think I have biases? It's obvious you don't give one wit about property rights. I already told you why. Suppliers aren't slaves. You don't just get to force them to provide for what people demand.
Humans are resources just like any other. Are you suggesting we bring back slavery?
"There's nothing intrinsically sacred about a market,"
Sure there is. A market arises naturally when rights are protected. When you violate the free market you are in fact violating peoples rights.
If I owned every diamond on the planet then who are to to bitch about it? Nor would that be a "market failure". The question is, "compared to what?"
It's not a failure of the market when one group or individual gets to dictate absolute terms for transactions involving a scarce resource? Gem diamonds are silly because they're nearly useless, but in the case of resources that are useful it seems pretty plain that the result is a globally suboptimal result, in that people are not hoarding the resource could make better use of it in creating greater material wealth.
It's perfectly possible in a free market for people to make mistakes. To horde diamonds when they should have sold. The thing is that in the free market such acts are self punishing.
Self-punishing within the domain of the market, but that does not imply self-correcting. The people participating in the market are not necessarily rationally selfish or capable of thinking long-term, and the fewer people who control a resource the more likely they are to make mistakes. Furthermore, a lot of potential failure modes are still good for the people making the decisions, just not the BEST choice they could make, and individual risk-aversion will make such states more stable than they ought to be, especially in the absence of outside competition.
Spreading resources among a larger group of people smoothes out the mistakes and increases the pressure to self-correct; this is related to why monopolies are harmful.
Yeah, and what if I define a successful market as one that optimally allocates scarce resources according to supply?
Without demand, there is no reason to allocate at all. What does allocating according to supply even mean? Supply is a function of two things; the natural scarcity of the source material which is independent of human effort, and the reward for extracting that resource from its natural state, which is a function of the demand for the resource.
What purpose does a market HAVE, if not to allocate resources according to demand? There's nothing intrinsically sacred about a market, it's just a tool to improve the functioning of society with limited resources. Just because most other systems of allocation fail badly doesn't mean that every result of a free market is by definition "good", unless one turns the free market into a quasi-religion.
Everybody "wants" therefore everyone demands, but that demand has to be backed up with production, and free trade for it to even be considered fair.
Everybody wants, which is why we have currency to quantify how badly they want it. If enough people want it badly enough, it increases the value of extracting more. If few people want it, the value of extraction drops and people will extract other resources instead. Supply of resources isn't something that just happens for its own sake, and merely producing something does not entitle the supplier to compensation for it.
Even if you had given a semi-reasonable definition of "optimal allocation" it is still a concept fraught with bias, "Who's optimum, according to who's values".
Optimal in the sense of a global maximum for the total of how much people value their possessions, the sum of current state of all participant's utility functions, etc. I'm not sure how else you would define it. Feel free to offer a formulation, I'm honestly curious how you see it.
I still haven't gotten an answer on how it benefits DeBeers to work againsts it's own best interests, which by definition it does, if the claims about hoarding are true.
First, there's a lot of assumptions buried in that "by definition" that I don't think you've justified fully, but I probably agree with them so I won't argue.
Second, you assume that their interests are purely financial, and that they wouldn't be willing to trade off their own financial interests (and, in the process, the optimality of the economy as a whole) for something else, such as a feeling of stability or control.
Third, it seems pretty clear that, in the short term, continuing to hoard does in fact benefit them because it keeps prices higher temporarily. If their organizational structure is such that short-term success correlates strongly with individual success, but long-term success is not correlated with individuals, the organization will never act to preserve long-term interests.
Anyways, I'm not arguing that they won't be punished by the market eventually for poor decisions. People make poor choices in markets all the time. As you said, people can make mistakes and will get personally suboptimal results for it. The point is that people making consistent, repeated mistakes anyways represents the system not working optimally. Free markets produce provably optimal results only in ideal situations, which most real markets reflect only approximately.
I'm not going to speculate on gas prices or the ill-conceived bailouts, as this post is already too long.
"Brian Macker, the facts of De Beers' manipulation of the diamond market aren't really in dispute;"
I don't dispute that they are trying to corner the market and are hoarding diamonds. What I dispute is that hoarding is effectively harmful to other people in a way they have a right to complain about. If I owned every diamond on the planet then who are to to bitch about it? Nor would that be a "market failure". The question is, "compared to what?"
It's perfectly possible in a free market for people to make mistakes. To horde diamonds when they should have sold. The thing is that in the free market such acts are self punishing. When the same exact mistakes are made via government they are not self punishing. The government can and does push the consequences of it's bad economic decisions on others. Like when the US government confiscated and hoarded the entire gold supply of the US.
So one system has effective and proportional negative feedback while the other doesn't.
Free markets defined here in a way that is compatible with natural rights.
"If you define a successful market as one that optimally allocates scarce resources according to demand"
Yeah, and what if I define a successful market as one that optimally allocates scarce resources according to supply? Don't you think the people who create the products get a say, or do you just view them as slaves?
You do understand that a raw diamond sitting a thousand feet under the ground needs a creative process before it is useful to anyone, right? If they don't get a say and resources were merely allocated according to demand then no one would bother developing the resources. Everybody "wants" therefore everyone demands, but that demand has to be backed up with production, and free trade for it to even be considered fair.
Even if you had given a semi-reasonable definition of "optimal allocation" it is still a concept fraught with bias, "Who's optimum, according to who's values".
"While the free market is certainly the best system of resource allocation currently known"
No kidding, but you apparently don't know why.
", you may want to evaluate whether your own biases are blinding you to the failure modes of the system."
That's your biases talking. I can see by your post that you attributed a whole load of beliefs and knowledge (or lack of knowledge) to me and then assumed your imaginings to be true.
I still haven't gotten an answer on how it benefits DeBeers to work againsts it's own best interests, which by definition it does, if the claims about hoarding are true.
Sure whoever controls a resource can act badly, look at Venezuela. That only makes senses when control is separated from ownership, or the benefits of ownership from the consequences.
Right now the best we can hope for is that markets are properly structured, via law, not intervention, nor government ownership, the benefits with the responsibilities of ownership.
That's not happening with this bailout, wasn't happening with Fannie and Freddy, nor is the Fed based on such principles.
If DeBeers is truly benefiting without paying any consequences from it's actions you can be pretty darn sure that it has done so via non-market actions. Via some form of governmental corruption, regulation, etc.
I know DeBeers is benefiting from governmental actions. What is not clear is whether it benefits from the scary bugaboo of hoarding. No one hear or anywhere else has established that as a fact.
Perhaps you should check your biases against the current drop in oil prices. Why is that cartel so ineffectual in keeping prices up if hoarding is such a great strategy?
Perhaps there is a much better theory that predicted the climb of oil prices based merely on the monetary inflation that occurred during the Clinton/Bush adminstrations. Perhaps that theory also predicts that commodity prices will collapse when fractional reserve monetary inflation is played out, and banks have to shore up their reserves. Perhaps you aren't aware of what you need to be aware of.
"A minimal amount of press coverage early on and it's front page in every country in the world."
You just send a set of photos to the Weekly World News and allow them to interview a couple of your employees who are drunk off their asses. Follow it up with a press release announcing the tremendous diamond discovery.
Brian Macker, the facts of De Beers' manipulation of the diamond market aren't really in dispute; they artificially increased the rarity and perceived value of a commodity, driving up the price and reducing the amount in circulation compared to what it would be otherwise. This has been documented and described many times.
If you define a successful market as one that optimally allocates scarce resources according to demand, then yes, it constitutes a failure of the market, which isn't even particularly remarkable. Fortunately, in this case, it's a commodity that isn't really of any significant importance, so the negative impact is minimal. Perhaps you are laboring under the mistaken impression that it isn't possible to break a market without government interference?
While the free market is certainly the best system of resource allocation currently known, you may want to evaluate whether your own biases are blinding you to the failure modes of the system.
Diamonds can be destroyed easily by heating. They are made of carbon (like graphite, fullerene, etc.). The following reaction is energetically favorable, like burning coal or paper,
2*C(diamond)+2*O2 = 2*CO2
I expect the effects on global warming to be negligible. ;)
Good point on why to mine and hoard. It still requires that the diamonds are worth more than the costs involved now, or in storing them for the future.
By definition hoarding, now, will raise the price, now, but it also lowers the price in the future. The only time it is economical to hoard is when future prices are expected to be greater than current prices minus storage costs, minus forgone interest, etc.
I understand you weren't supporting the view that they were worth less, but that was the idea I was countering.
There are reasons for DeBeers to do this but nothing that has to do with market incentive. For instance, DeBeers might just be making a mistake. It's their diamonds and therefore their mistake to make.
I think that the conspiratorial mindset wants to see this as a refutation of the market. I say, just think of DeBeers as saving resources for our future. Think of our children.
Seems to me like the anti-market believers want to have things both ways. They claim if we leave it up to the market then commodities will be overused and nothing left for the future, while at the same time believing that market forces will lead to hoarding of those resources. So I would ask them, "Which is it?"
If Overcoming Bias is to be invaded by channers, as now appears to be happening, let at least a substantial portion of them be from /tg/, wherein people are in the habit of dealing with the rules as written rather then the way humans interpret them.
One reason I can think of why DeBeers might be mining and hoarding simultaneously is that it might be unsure of its property rights in its diamond mines, in which case it would want to mine as quickly as possible in order to move the diamonds to more secure storage.
You forgot to mention that the cave is 140 degrees farenheit and 100% humidity. No sweating to cool yourself off in their.Maintaining it for tourism would require constant pumping of the 140 water that originally filled the cave. That pumping is now done because of a mining operation and will probably cease once the mine is played out.
Of course the diamonds would be mined even if it was very comfortable in the cave. There would be no need to "destroy" the cave. Just one of the giant crystals laying smashed on the floor of the cave from a prior earthquake would destroy the world price of diamonds.
Besides a similar cave to this one was already found in 1910, The Cueva de las Espadas, with much smaller crystals. Gypsum crystals aren't all the useful or valuable, yet that cave was "destroyed". But small, soft crystals are easy to break off and take. People just rubbing their fingernail across gypsum crystals scratches the surfact.
Exactly what do you use to cut let alone break off a six foot wide piece of diamond? I expect the hypothetical diamond cave would survive much longer merely because of the physical properties of the crystals.
Frelkins,
What do you think motivates DeBeers to continue mining and hoarding diamonds if as you believe their true market value is next to worthless? Obviously this is a non-working business model unless there is some benefit to having a very large store of an expensive commodity that you have to guard day and night.
Meanwhile to operate mines is not cheap either. One can think of the stockpile itself as a very cheap to run mine that produces the highest quality cut gems, not rounded pebbles. Why mine actual mines to sell diamonds if you've got a cheap source of diamonds losing value?
Now also according to you this is a commodity that is diminishing in value. I could understand stockpiling a commodity that is increasing in value so that it can be put to use by future generations in a more valuable way. Why stockpile something that is seeing a permanent decrease in value? That was your implication right that the decrease was permanent?
What is that economic benefit to DeBeer? Is it a stock scam? What? Why does this scam only work with diamonds? Why not with every other durable commodity, like say iron? Also, why not just leave the commodity in the ground. If it's about cornering the market one can just as well just buy up all diamond mines and not run them at all.
I don't see where you are going with your post. Ignoring that I haven't been able to find any reputable references to Fourchon Univeristy--let alone its Faculty of Science--I just can't take these claims seriously. I can imagine the construction of an iron wall; making a diamond wall is just really a quantitative change. But cars are complicated pieces of machinery. As EY has mentioned, there are (conservatively) 10^20 molecules in a typical car. When you do all the math, being careful to deal with the symmetries and degeneracies, there are well over 10^9000 ways to assemble these into a car. But it's different for a diamond car so I'd probably just whistle for a cab and when it came near the license plate said "FRESH" and had a dice in the mirror. If anything I could say that this cab was rare but I thought now forget it, yo home to Bel-Air.
I sure wouldn't let hordes of screaming American women within a 100 mile perimeter of my diamond cave. I'd carve it up, but I'd let an IMAX film crew do their thing first. And I'd get a lot of bodyguards.
Due to extensive research done by the Fourchon University of Science, diamond has been confirmed as the the hardest metal known the man. The research is as follows.
Pocket-protected scientists built a wall of iron and crashed a diamond car into it at 400 miles per hour, and the car was unharmed.
They then built a wall out of diamond and crashed a car made of iron moving at 400 miles an out into the wall, and the wall came out fine.
They then crashed a diamond car made of 400 miles per hour into a wall, and there were no survivors.
They crashed 400 miles per hour into a diamond traveling at iron car. Western New York was powerless for hours.
They rammed a wall of metal into a 400 mile per hour made of diamond, and the resulting explosion shifted the earth's orbit 400 million miles away from the sun, saving the earth from a meteor the size of a small Washington suburb that was hurtling towards midwestern Prussia at 400 billion miles per hour.
They shot a diamond made of iron at a car moving at 400 walls per hour, and as a result caused two wayward airplanes to lose track of their bearings, and make a fatal crash with two buildings in downtown New York.
They spun 400 miles at diamond into iron per wall. The results were inconclusive.
Finally, they placed 400 diamonds per hour in front of a car made of wall traveling at miles, and the result proved without a doubt that diamonds were the hardest metal of all time, if not just the hardest metal known the man.
Diamonds don't form in caves. You would never find them in an environment like this.
Diamond formation is complex. I will try to dumb it down. First off, Diamond is elemental Carbon (C) that is metastable at low pressures (ie- Earth's surface) so usually the mineral with the composition of C on the surface is graphite. Anyways, starting in the deep mantle (~650 km) you have compounds like CO2, MgCO3, CCO. Mantle metasomatism (fluid movement) then moves these compounds through a transition zone into the upper mantle. This transition zone is thought to reduce (take away oxygen) these compounds and precipitate diamonds (mineral formula: C). These newly formed diamonds reside in the reduced upper mantle (~150-400 km). Reduced meaning there are low amounts of oxygen. If oxygen was present, even at these high temperatures and pressures, the C would oxidize into CO2.
So we have diamonds now, but they are realllllly deep beneath the surface. How do they get to the surface? Diamonds are brought to the surface/near-surface via kimberlitic magma tubes which are essentially direct shots from the upper mantle to the surface. Mantle plumes if you will. So they are found as crystals in rocks basically. Interestingly enough, diamonds are typically one age (lets say 1.5 billion years old), the kimberlite magma is (lets say ~250-30 million years old), and these magmas are emplaced onto stable continents that are roughly 2.5 billion years old. We have these old continents, fairly old diamonds, and young magma...meaning the diamonds must reside in that upper mantle for quite some time.
"What purpose does a market HAVE, if not to allocate resources according to demand?"
... and you think I have biases? It's obvious you don't give one wit about property rights. I already told you why. Suppliers aren't slaves. You don't just get to force them to provide for what people demand.
Humans are resources just like any other. Are you suggesting we bring back slavery?
"There's nothing intrinsically sacred about a market,"
Sure there is. A market arises naturally when rights are protected. When you violate the free market you are in fact violating peoples rights.
Brian and soulless, your comments above are too long.
If I owned every diamond on the planet then who are to to bitch about it? Nor would that be a "market failure". The question is, "compared to what?"
It's not a failure of the market when one group or individual gets to dictate absolute terms for transactions involving a scarce resource? Gem diamonds are silly because they're nearly useless, but in the case of resources that are useful it seems pretty plain that the result is a globally suboptimal result, in that people are not hoarding the resource could make better use of it in creating greater material wealth.
It's perfectly possible in a free market for people to make mistakes. To horde diamonds when they should have sold. The thing is that in the free market such acts are self punishing.
Self-punishing within the domain of the market, but that does not imply self-correcting. The people participating in the market are not necessarily rationally selfish or capable of thinking long-term, and the fewer people who control a resource the more likely they are to make mistakes. Furthermore, a lot of potential failure modes are still good for the people making the decisions, just not the BEST choice they could make, and individual risk-aversion will make such states more stable than they ought to be, especially in the absence of outside competition.
Spreading resources among a larger group of people smoothes out the mistakes and increases the pressure to self-correct; this is related to why monopolies are harmful.
Yeah, and what if I define a successful market as one that optimally allocates scarce resources according to supply?
Without demand, there is no reason to allocate at all. What does allocating according to supply even mean? Supply is a function of two things; the natural scarcity of the source material which is independent of human effort, and the reward for extracting that resource from its natural state, which is a function of the demand for the resource.
What purpose does a market HAVE, if not to allocate resources according to demand? There's nothing intrinsically sacred about a market, it's just a tool to improve the functioning of society with limited resources. Just because most other systems of allocation fail badly doesn't mean that every result of a free market is by definition "good", unless one turns the free market into a quasi-religion.
Everybody "wants" therefore everyone demands, but that demand has to be backed up with production, and free trade for it to even be considered fair.
Everybody wants, which is why we have currency to quantify how badly they want it. If enough people want it badly enough, it increases the value of extracting more. If few people want it, the value of extraction drops and people will extract other resources instead. Supply of resources isn't something that just happens for its own sake, and merely producing something does not entitle the supplier to compensation for it.
Even if you had given a semi-reasonable definition of "optimal allocation" it is still a concept fraught with bias, "Who's optimum, according to who's values".
Optimal in the sense of a global maximum for the total of how much people value their possessions, the sum of current state of all participant's utility functions, etc. I'm not sure how else you would define it. Feel free to offer a formulation, I'm honestly curious how you see it.
I still haven't gotten an answer on how it benefits DeBeers to work againsts it's own best interests, which by definition it does, if the claims about hoarding are true.
First, there's a lot of assumptions buried in that "by definition" that I don't think you've justified fully, but I probably agree with them so I won't argue.
Second, you assume that their interests are purely financial, and that they wouldn't be willing to trade off their own financial interests (and, in the process, the optimality of the economy as a whole) for something else, such as a feeling of stability or control.
Third, it seems pretty clear that, in the short term, continuing to hoard does in fact benefit them because it keeps prices higher temporarily. If their organizational structure is such that short-term success correlates strongly with individual success, but long-term success is not correlated with individuals, the organization will never act to preserve long-term interests.
Anyways, I'm not arguing that they won't be punished by the market eventually for poor decisions. People make poor choices in markets all the time. As you said, people can make mistakes and will get personally suboptimal results for it. The point is that people making consistent, repeated mistakes anyways represents the system not working optimally. Free markets produce provably optimal results only in ideal situations, which most real markets reflect only approximately.
I'm not going to speculate on gas prices or the ill-conceived bailouts, as this post is already too long.
"Brian Macker, the facts of De Beers' manipulation of the diamond market aren't really in dispute;"
I don't dispute that they are trying to corner the market and are hoarding diamonds. What I dispute is that hoarding is effectively harmful to other people in a way they have a right to complain about. If I owned every diamond on the planet then who are to to bitch about it? Nor would that be a "market failure". The question is, "compared to what?"
It's perfectly possible in a free market for people to make mistakes. To horde diamonds when they should have sold. The thing is that in the free market such acts are self punishing. When the same exact mistakes are made via government they are not self punishing. The government can and does push the consequences of it's bad economic decisions on others. Like when the US government confiscated and hoarded the entire gold supply of the US.
So one system has effective and proportional negative feedback while the other doesn't.
Free markets defined here in a way that is compatible with natural rights.
"If you define a successful market as one that optimally allocates scarce resources according to demand"
Yeah, and what if I define a successful market as one that optimally allocates scarce resources according to supply? Don't you think the people who create the products get a say, or do you just view them as slaves?
You do understand that a raw diamond sitting a thousand feet under the ground needs a creative process before it is useful to anyone, right? If they don't get a say and resources were merely allocated according to demand then no one would bother developing the resources. Everybody "wants" therefore everyone demands, but that demand has to be backed up with production, and free trade for it to even be considered fair.
Even if you had given a semi-reasonable definition of "optimal allocation" it is still a concept fraught with bias, "Who's optimum, according to who's values".
"While the free market is certainly the best system of resource allocation currently known"
No kidding, but you apparently don't know why.
", you may want to evaluate whether your own biases are blinding you to the failure modes of the system."
That's your biases talking. I can see by your post that you attributed a whole load of beliefs and knowledge (or lack of knowledge) to me and then assumed your imaginings to be true.
I still haven't gotten an answer on how it benefits DeBeers to work againsts it's own best interests, which by definition it does, if the claims about hoarding are true.
Sure whoever controls a resource can act badly, look at Venezuela. That only makes senses when control is separated from ownership, or the benefits of ownership from the consequences.
Right now the best we can hope for is that markets are properly structured, via law, not intervention, nor government ownership, the benefits with the responsibilities of ownership.
That's not happening with this bailout, wasn't happening with Fannie and Freddy, nor is the Fed based on such principles.
If DeBeers is truly benefiting without paying any consequences from it's actions you can be pretty darn sure that it has done so via non-market actions. Via some form of governmental corruption, regulation, etc.
I know DeBeers is benefiting from governmental actions. What is not clear is whether it benefits from the scary bugaboo of hoarding. No one hear or anywhere else has established that as a fact.
Perhaps you should check your biases against the current drop in oil prices. Why is that cartel so ineffectual in keeping prices up if hoarding is such a great strategy?
Perhaps there is a much better theory that predicted the climb of oil prices based merely on the monetary inflation that occurred during the Clinton/Bush adminstrations. Perhaps that theory also predicts that commodity prices will collapse when fractional reserve monetary inflation is played out, and banks have to shore up their reserves. Perhaps you aren't aware of what you need to be aware of.
"A minimal amount of press coverage early on and it's front page in every country in the world."
You just send a set of photos to the Weekly World News and allow them to interview a couple of your employees who are drunk off their asses. Follow it up with a press release announcing the tremendous diamond discovery.
Brian Macker, the facts of De Beers' manipulation of the diamond market aren't really in dispute; they artificially increased the rarity and perceived value of a commodity, driving up the price and reducing the amount in circulation compared to what it would be otherwise. This has been documented and described many times.
If you define a successful market as one that optimally allocates scarce resources according to demand, then yes, it constitutes a failure of the market, which isn't even particularly remarkable. Fortunately, in this case, it's a commodity that isn't really of any significant importance, so the negative impact is minimal. Perhaps you are laboring under the mistaken impression that it isn't possible to break a market without government interference?
While the free market is certainly the best system of resource allocation currently known, you may want to evaluate whether your own biases are blinding you to the failure modes of the system.
Diamonds can be destroyed easily by heating. They are made of carbon (like graphite, fullerene, etc.). The following reaction is energetically favorable, like burning coal or paper,
2*C(diamond)+2*O2 = 2*CO2
I expect the effects on global warming to be negligible. ;)
we can create synthetic diamonds that fool cutters, can't we?
Wei,
Good point on why to mine and hoard. It still requires that the diamonds are worth more than the costs involved now, or in storing them for the future.
By definition hoarding, now, will raise the price, now, but it also lowers the price in the future. The only time it is economical to hoard is when future prices are expected to be greater than current prices minus storage costs, minus forgone interest, etc.
I understand you weren't supporting the view that they were worth less, but that was the idea I was countering.
There are reasons for DeBeers to do this but nothing that has to do with market incentive. For instance, DeBeers might just be making a mistake. It's their diamonds and therefore their mistake to make.
I think that the conspiratorial mindset wants to see this as a refutation of the market. I say, just think of DeBeers as saving resources for our future. Think of our children.
Seems to me like the anti-market believers want to have things both ways. They claim if we leave it up to the market then commodities will be overused and nothing left for the future, while at the same time believing that market forces will lead to hoarding of those resources. So I would ask them, "Which is it?"
If Overcoming Bias is to be invaded by channers, as now appears to be happening, let at least a substantial portion of them be from /tg/, wherein people are in the habit of dealing with the rules as written rather then the way humans interpret them.
One reason I can think of why DeBeers might be mining and hoarding simultaneously is that it might be unsure of its property rights in its diamond mines, in which case it would want to mine as quickly as possible in order to move the diamonds to more secure storage.
Robin,
You forgot to mention that the cave is 140 degrees farenheit and 100% humidity. No sweating to cool yourself off in their.Maintaining it for tourism would require constant pumping of the 140 water that originally filled the cave. That pumping is now done because of a mining operation and will probably cease once the mine is played out.
Of course the diamonds would be mined even if it was very comfortable in the cave. There would be no need to "destroy" the cave. Just one of the giant crystals laying smashed on the floor of the cave from a prior earthquake would destroy the world price of diamonds.
Besides a similar cave to this one was already found in 1910, The Cueva de las Espadas, with much smaller crystals. Gypsum crystals aren't all the useful or valuable, yet that cave was "destroyed". But small, soft crystals are easy to break off and take. People just rubbing their fingernail across gypsum crystals scratches the surfact.
Exactly what do you use to cut let alone break off a six foot wide piece of diamond? I expect the hypothetical diamond cave would survive much longer merely because of the physical properties of the crystals.
Frelkins,
What do you think motivates DeBeers to continue mining and hoarding diamonds if as you believe their true market value is next to worthless? Obviously this is a non-working business model unless there is some benefit to having a very large store of an expensive commodity that you have to guard day and night.
Meanwhile to operate mines is not cheap either. One can think of the stockpile itself as a very cheap to run mine that produces the highest quality cut gems, not rounded pebbles. Why mine actual mines to sell diamonds if you've got a cheap source of diamonds losing value?
Now also according to you this is a commodity that is diminishing in value. I could understand stockpiling a commodity that is increasing in value so that it can be put to use by future generations in a more valuable way. Why stockpile something that is seeing a permanent decrease in value? That was your implication right that the decrease was permanent?
What is that economic benefit to DeBeer? Is it a stock scam? What? Why does this scam only work with diamonds? Why not with every other durable commodity, like say iron? Also, why not just leave the commodity in the ground. If it's about cornering the market one can just as well just buy up all diamond mines and not run them at all.
@Heath S
I don't see where you are going with your post. Ignoring that I haven't been able to find any reputable references to Fourchon Univeristy--let alone its Faculty of Science--I just can't take these claims seriously. I can imagine the construction of an iron wall; making a diamond wall is just really a quantitative change. But cars are complicated pieces of machinery. As EY has mentioned, there are (conservatively) 10^20 molecules in a typical car. When you do all the math, being careful to deal with the symmetries and degeneracies, there are well over 10^9000 ways to assemble these into a car. But it's different for a diamond car so I'd probably just whistle for a cab and when it came near the license plate said "FRESH" and had a dice in the mirror. If anything I could say that this cab was rare but I thought now forget it, yo home to Bel-Air.
I sure wouldn't let hordes of screaming American women within a 100 mile perimeter of my diamond cave. I'd carve it up, but I'd let an IMAX film crew do their thing first. And I'd get a lot of bodyguards.
Due to extensive research done by the Fourchon University of Science, diamond has been confirmed as the the hardest metal known the man. The research is as follows.
Pocket-protected scientists built a wall of iron and crashed a diamond car into it at 400 miles per hour, and the car was unharmed.
They then built a wall out of diamond and crashed a car made of iron moving at 400 miles an out into the wall, and the wall came out fine.
They then crashed a diamond car made of 400 miles per hour into a wall, and there were no survivors.
They crashed 400 miles per hour into a diamond traveling at iron car. Western New York was powerless for hours.
They rammed a wall of metal into a 400 mile per hour made of diamond, and the resulting explosion shifted the earth's orbit 400 million miles away from the sun, saving the earth from a meteor the size of a small Washington suburb that was hurtling towards midwestern Prussia at 400 billion miles per hour.
They shot a diamond made of iron at a car moving at 400 walls per hour, and as a result caused two wayward airplanes to lose track of their bearings, and make a fatal crash with two buildings in downtown New York.
They spun 400 miles at diamond into iron per wall. The results were inconclusive.
Finally, they placed 400 diamonds per hour in front of a car made of wall traveling at miles, and the result proved without a doubt that diamonds were the hardest metal of all time, if not just the hardest metal known the man.