Friday, July 22, 2016

The Business of Diamonds and Dogs


Almost everything the diamond industry tells us about their product is a lie.

For one thing, diamonds are not particularly rare. They are found all over the world and in such quantities that the only way the diamond cartel can keep prices up is by putting more than 70 percent of all diamond production into a vault.

And why is this industry so interested in telling us that a "diamond is forever?"

Simple: they don't want us to try to sell a diamond once it is bought. Not only would resale further flood the already-glutted market, but it would also reveal an essential truth: diamonds are a really lousy investment.

It turns out that buying a diamond is the financial equivalent of flushing your money down the toilet. You buy retail and sell wholesale, and can never hope to recoup the difference.

Why am I talking about diamonds?

Simple. Diamonds and dogs have been variously described as a girl or a man's best friend.

And though they would seem to have nothing in common, diamonds and dogs are not so far apart in terms of marketing methods and marketing problems.


Think about it.

The world of diamonds is being hammered by three forces: 1) a flood of diamonds on the market as new sources come on line from Russia, Africa, and Australia; 2) the slow but stead rise of genuine laboratory-made diamonds and the perfection of cubic zirconia, and; 3) a rising social stigma attached to diamonds as a result of television new shows and documentaries which have (correctly) associated wedding and engagement rings with the human atrocities behind blood diamonds.

Are dogs really that different?

The canine equivalent to cubic zirconium are shelter and rescue dogs.

These "throw away" dogs shine every bit as bright as their Kennel Club brethren, but do so at a fraction of the cost, and often with less up keep as well.

The canine equivalent of laboratory diamonds are "designer dogs" created whole cloth by non-AKC breeders who promise "hybrid vigor" from Puggles, Labradoodles and Chiweenies.

As for the glut of dogs on the market, that can can be seen at any shelter. The only difference here is that instead of putting the dogs in a vault, we kill them in gas chambers or with a blue solution of sodium pentobarbital.


Which leaves us with the changing social construct behind owning a Kennel Club dog.

That construct has been changing for some time now -- one reason Kennel Club registrations have declined 53 percent in the last 15 years.

One of the powerful forces shaping the world of dogs has been the Internet. With the rise of online communication, the word has gotten out that breed after breed of Kennel Club is statistically less healthy than a shelter dog.

The diseases, defects and deformities change from breed to breed, of course, but almost all the Kennel Club dogs now seem to be struggling under a horrific genetic load: jaw-dropping rates of cancer, juvenile cataracts, liver disease, hip dysplasia, deafness, endocrine issues, blood problems ... the list goes on and on.

Who wants to be part of that? No one!

And so we have a perfect parallel.

In a world in which the ashes of your dead wife (or dog) can be turned into a real diamond, why would anyone buy an anonymous stone mined in Sierra Leone at the point of a gun by a man who eats human flesh and rapes 12-year old girls?

And when the jewelry store at the local mall will sell you a cubic zirconium ring in a gold mount for $80, why would anyone shell out $20,000 for something that will not "do the job" any better?

No one smart, that's for sure!

And the same is true for most dogs owners who only want a pet.


Just as "conflict diamonds" left blood stains on the ring fingers of new brides, so too have the defects, diseases, and deformities of Kennel Club dogs become a quiet indictment at the end of a leash.

Who wants to be associated with such misery and depraved indifference to outcome? No one!

And that is a real problem, for both dog dealers and diamond merchants.


When you are selling a commodity that is almost entirely devoid of all practical value, and whose price is based solely on romance, myth and misinformation, it does not take too much to generate a market collapse.

Are we there yet? Not quite, though it safe to say that "the market is down" as far as both diamonds and dogs is concerned.

And interestingly enough, neither the diamond cartel nor the American Kennel Club seem to have a program for recovery.

Is there a way forward for the Kennel Club? I think there is, but it will require fundamental changes in the way the Kennel Club registers and evaluates dogs.

Only by improving the health of their product (and the utility of their product in the case of working dogs), can the Kennel Club hope to change the story being told, and hope to compete head-to-head with shelter dogs and just-invented hybrids.

Americans will pay more for a better product, and we will beat a path to the door of someone who offers one.

But, as the American car industry is finding out, we will NOT pay more for a product that is burdened with moral baggage, costs more, and is breaking down all the time.

We may be slow, we may be ignorant, and we may even forget a lot, but we are not stupid.

2 comments:

Joe Mama said...

"When you are selling a commodity that is almost entirely devoid of all practical value, and whose price is based solely on romance, myth and misinformation, it does not take too much to generate a market collapse."

Great sentence. Much wisdom. Thanks for writing this post. An economist might write "utility" instead of "practical value", but it is still a great sentence.

Susan said...

I'll take a dog over a diamond any day!