Economists are already scratching their heads over how to rename the Diamond-Water-Paradox. Yup, it seems likely that, in the near future, the old name could fail to convey the central message. Why? The answer lies in what is called man-made, synthetic or cultured diamonds.

First of all, some background information:

Synthetic diamonds were first produced on February 16, 1953 in Stockholm by the QUINTUS project of ASEA, Sweden's major electrical manufacturing company using a bulky apparatus designed by Baltzar von Platen. The discovery was kept secret and in 1955 the General Electric Research Laboratory announced the invention of the first reproducible process for making diamonds. Ergo, synthetic diamonds are nothing new. Tiny synthetic diamonds are used in saw blades for cutting asphalt and marble, in drill bits for oil and gas drilling, and even as an exfoliant (substance for removing dead skin cells) in cosmetics.

For quite some time there have been rumors around that GE can already produce diamonds that are visually indistinguishable from their mined counterparts but decided not to engage in the jewelry business. Some people say that agents from De Beers with dark sunglasses were seen arriving at and leaving GE's corporate headquarters. A gentlemen's agreement? If one takes into account that GE would have to produce quite a lot of diamonds to be able to sell them at reasonable prices (economies of scale) and that the value of diamonds would drop tremendously since scarcity is no longer an issue, one can assume that De Beers could came up with incentives for GE to enter such an agreement.

But now, armed with inexpensive, mass-produced gems, two startups (Gemesis and Apollo Diamond) are launching an assault on the De Beers cartel. Here is the superb story.


Picture shows Malaysian model Kavita Kaur with one of the world's most expensive 'diamond' gown in Kuala Lumpur (2002). The gown, worth 19 million ringgit ($5 million) has almost 2,500 diamonds hand-sewn in by its creator American Anne Bowen. In total, the diamonds on the gown weight 625.25 carats.