ajaz_eco_204_2012_2013_chapter_16_Market_Power

From there he went on buying up the countrys diamond

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Unformatted text preview: d British accents and pressed cotton shirts mark them out as the sort who might other wise be employed by Her Majesty’s secret service, to vacuum up diamonds that seep onto the market in such places as Angola and Congo -Kinshasa. The system today works in much the same way as it did when Cecil Rhodes first hatched his plans for a diamond em pire a century ago. He observed that, uncontrolled, the industry dug out too many diamonds, flooded the market and prompted a collapse in prices. Apart from low-quality industrial diamonds, the stones had no practical use that would help prop up their price. The answer was to support prices artificially by seizing control of all the mines. In 1888 Rhodes founded De Beers Consolidated Mines, merging two of the biggest mines in South Africa (De Beers and Kimberley). From there, he went on buying up the country’s diamond mines until he controlled 90% of the world’s gemstones, most of them extracted by pitifully paid African workers under fierce surveillance. From that point, market control derived fro...
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This document was uploaded on 01/19/2014.

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