WEBVTT - What Makes Something Valuable? (Finale) 0:00:03.160 --> 0:00:07.240 This is Red Pilled America. A quick question before we 0:00:07.280 --> 0:00:10.000 start the show. How many shows are there out there 0:00:10.039 --> 0:00:12.959 like Red Pilled America. You know the answer, it's zero 0:00:13.160 --> 0:00:16.360 and why because it's hard to produce a storytelling show. 0:00:16.880 --> 0:00:20.680 Join the fanbam and support storytelling that aligns with your values. 0:00:21.040 --> 0:00:24.000 Just go to Redpilled America dot com and click join 0:00:24.079 --> 0:00:26.639 in the top menu. You'll get add free access to 0:00:26.720 --> 0:00:30.640 our entire back catalog of episodes. Help us save America, 0:00:30.680 --> 0:00:31.800 one story at a time. 0:00:34.200 --> 0:00:35.760 Previously on Red Pilled. 0:00:35.600 --> 0:00:40.879 America, diamonds were not valuable because they were rare. They 0:00:40.880 --> 0:00:42.960 were valuable because they were controlled. 0:00:43.159 --> 0:00:46.600 Central banks don't store what's fashionable. They store what works 0:00:46.600 --> 0:00:48.440 when everything else breaks. 0:00:48.159 --> 0:00:50.760 And during the onset of the Great Depression, the smart 0:00:50.760 --> 0:00:52.680 money began accumulating gold. 0:00:52.840 --> 0:00:56.560 European orders from de Beers for industrial diamonds began to climb, 0:00:56.760 --> 0:00:58.840 and Oppenheimer understood what that meant. 0:00:58.920 --> 0:01:02.400 These orders are not the actions of nations preparing for peace. 0:01:02.800 --> 0:01:04.360 They're preparing for war. 0:01:04.680 --> 0:01:08.240 Industrial diamond orders became a proxy for war preparation. 0:01:08.640 --> 0:01:12.520 Scientists at the General Electric Company achieved something that until 0:01:12.560 --> 0:01:16.720 then had been considered impossible. They created a diamond in 0:01:16.760 --> 0:01:22.600 a laboratory. I'm Patrick Carelci and. 0:01:22.520 --> 0:01:23.880 I'm Adriana Cortes. 0:01:24.160 --> 0:01:27.319 And this is Red Pilled America, a storytelling show. 0:01:28.400 --> 0:01:30.880 This is not another talk show covering the day's news. 0:01:31.319 --> 0:01:33.080 We're all about telling stories. 0:01:33.760 --> 0:01:36.880 Stories. Hollywood doesn't want you to hear stories. 0:01:36.920 --> 0:01:41.480 The media mocks stories about everyday Americans at the Globalist ignore. 0:01:42.400 --> 0:01:45.360 You can think of Red Pilled America as audio documentaries, 0:01:45.360 --> 0:01:54.840 and we promise only one thing, the truth. Welcome to 0:01:54.920 --> 0:02:07.560 Red Pilled America. It's a cold night in Brussels, January 0:02:07.680 --> 0:02:11.520 nineteen ninety two, and inside the Royal Windsor Hotel, two 0:02:11.639 --> 0:02:14.680 men sit across from one another at a small dining table. 0:02:16.480 --> 0:02:19.440 To anyone watching, this looks like nothing more than a 0:02:19.520 --> 0:02:23.240 routine business dinner, a supplier and a customer sharing a meal. 0:02:23.919 --> 0:02:26.799 But this quiet dinner will become Exhibit A and one 0:02:26.840 --> 0:02:31.600 of the most consequential antitrust cases in modern industrial history. 0:02:34.200 --> 0:02:37.400 At the table sits Peter Friends, a sales manager for 0:02:37.480 --> 0:02:43.000 General Electric's industrial diamond division. Across from him is Philip l'otier, 0:02:43.360 --> 0:02:46.520 a business executive at Diamont Boert, one of the world's 0:02:46.600 --> 0:02:51.320 largest buyers of industrial diamonds. On paper, Diamont Boert looks 0:02:51.400 --> 0:02:55.000 like just another European company, but behind the scenes, it 0:02:55.080 --> 0:02:59.480 is something more. It's owned in part by Debier's consolidated minds, 0:02:59.840 --> 0:03:02.600 the same company that's had a monopoly on engagement ring 0:03:02.639 --> 0:03:06.920 diamond for over a century. But this night isn't about romance. 0:03:07.120 --> 0:03:11.280 It's about industrial diamonds, the rough, gravelly stones used for 0:03:11.320 --> 0:03:15.000 grinding steel and shaping the modern world. At some point 0:03:15.080 --> 0:03:17.920 during the meal, low Tier quietly slides a list of 0:03:18.000 --> 0:03:22.760 upcoming de Beer's price increases for industrial diamonds. The ge 0:03:22.840 --> 0:03:25.600 man Peter Friends, takes out a pen and writes the 0:03:25.680 --> 0:03:29.880 numbers down. Moments later, Friends leaves the table, then walks 0:03:29.919 --> 0:03:32.959 to a fax machine, and he sends those numbers straight 0:03:33.000 --> 0:03:40.680 to General Electrics headquarters in Ohio. Within days, General Electric 0:03:40.800 --> 0:03:44.640 raises its own prices in near perfect alignment with Debier's, 0:03:44.960 --> 0:03:48.280 and the result across the world, the price of industrial 0:03:48.320 --> 0:03:52.560 diamonds rises, not because of scarcity or increased demand, but 0:03:52.600 --> 0:03:55.800 because the two companies that control roughly ninety percent of 0:03:55.800 --> 0:03:59.960 the global market moved together in silence. To the US 0:04:00.040 --> 0:04:04.640 Department of Justice, this was textbook collusion, two dominant players 0:04:04.800 --> 0:04:09.480 sharing pricing information then coordinated action a cartel dinner hidden 0:04:09.480 --> 0:04:13.080 in plain sight. But what makes this moment so extraordinary 0:04:13.400 --> 0:04:17.800 isn't just the potential illegality. It's the irony, because General 0:04:17.880 --> 0:04:20.960 Electric and De Beer's were never supposed to be allies. 0:04:21.240 --> 0:04:24.800 In fact, they began as mortal enemies. We're at the 0:04:24.800 --> 0:04:28.520 finale of our series of episodes entitled what makes something Valuable? 0:04:28.800 --> 0:04:31.320 We're looking for the answer to that question by telling 0:04:31.360 --> 0:04:34.480 the story of Diamond Powerhouse to Beers, so. 0:04:34.440 --> 0:04:36.640 To pick up where we left off in our last episode. 0:04:36.760 --> 0:04:39.720 By the early nineteen fifties, de Beers had done something 0:04:39.760 --> 0:04:43.320 no company in history had ever accomplished. It had taken 0:04:43.360 --> 0:04:46.720 a stone once reserved for kings and turned it into 0:04:46.760 --> 0:04:51.000 a universal symbol of love. Diamonds had defeated pearls. They 0:04:51.040 --> 0:04:55.599 had conquered Hollywood and embedded themselves into marriage status, aspiration, 0:04:55.960 --> 0:05:00.680 and identity itself. A proposal without a diamond felt almost illegitimate, 0:05:01.120 --> 0:05:04.080 And behind that cultural victory stood a the corporate reality 0:05:04.080 --> 0:05:07.520 that was just a staggering. By the mid nineteen fifties, 0:05:07.600 --> 0:05:10.760 de Beers controlled more than ninety percent of the world's 0:05:10.760 --> 0:05:14.599 diamond supply, and not just gem quality stones, glittering in 0:05:14.640 --> 0:05:19.240 jewelry cases, rough imperfect industrial diamonds that powered the modern 0:05:19.279 --> 0:05:22.400 world as well. These were the stones that cut steel, 0:05:22.640 --> 0:05:26.840 drilled through rocks, and shaped aircraft parts, tank armor, jet engines, 0:05:26.920 --> 0:05:30.799 oil wells, and precision weapons. They were the hidden backbone 0:05:30.880 --> 0:05:35.080 of the twentieth century industry, and prior to the mid 0:05:35.160 --> 0:05:39.120 nineteen fifties, de Beers controlled them all. This was the 0:05:39.120 --> 0:05:42.320 part of the diamond Empire. Few consumers ever saw the 0:05:42.320 --> 0:05:46.320 central selling organization, the enforcement arm of the de Beer's cartel, 0:05:46.560 --> 0:05:51.000 didn't just regulate glamour. It regulated factories, supply chains, and 0:05:51.240 --> 0:05:55.280 manufacturing timelines. If you wanted industrial diamonds, you went through 0:05:55.320 --> 0:05:58.359 de Beers. There was no alternative, and for most of 0:05:58.400 --> 0:06:01.239 the world that monopoly was accepted as simply the cost 0:06:01.279 --> 0:06:04.920 of doing business. But further the United States, that condition 0:06:05.120 --> 0:06:09.240 was intolerable. America had no diamond mines, no domestic supply, 0:06:09.600 --> 0:06:13.479 no independent leverage. Every drill bit, grinding wheel, and position 0:06:13.560 --> 0:06:16.640 tool that relied on diamond abrasives came from a foreign 0:06:16.640 --> 0:06:20.839 cartel controlled by de Beers, a cartel headquartered in Southern 0:06:20.920 --> 0:06:24.760 Africa with deep ties to Britain and no obligation real 0:06:24.960 --> 0:06:29.480 or moral to American national interests. During World War II, 0:06:29.800 --> 0:06:34.560 this dependency had already made US planners deeply uncomfortable. Diamonds 0:06:34.600 --> 0:06:38.080 were strategic in war. They were used to machine tank parts, 0:06:38.240 --> 0:06:42.560 shape aircraft engines, and manufacture weapons with tolerances measured in 0:06:42.680 --> 0:06:45.680 thousands of an inch, and yet the United States had 0:06:45.720 --> 0:06:48.960 been forced to rely on a monopoly it did not control. 0:06:49.360 --> 0:06:52.360 To Washington, this was more than a market issue. It 0:06:52.400 --> 0:06:54.960 was a national security problem. And as the World War 0:06:55.000 --> 0:06:59.640 II fighting intensified, de Beers made clear where its priority stood. Britain, 0:06:59.800 --> 0:07:03.919 the heart of the Empire, came first. Everyone else the 0:07:04.080 --> 0:07:10.480 United States noticed. American officials grew increasingly uneasy as they 0:07:10.520 --> 0:07:13.720 watched a foreign cartel dictate the flow of a material 0:07:13.880 --> 0:07:20.560 essential to wartime manufacturing. Requests for transparency were met with deflection. 0:07:21.120 --> 0:07:25.840 Inventory levels were treated as proprietary secrets. Allocation decisions were 0:07:25.840 --> 0:07:30.880 made behind closed doors in London and Johannesburg. From Washington's perspective, 0:07:31.000 --> 0:07:38.440 the situation was intolerable. Then came the rumors. Intelligence reports 0:07:38.480 --> 0:07:41.840 began to surface that millions of carrots of industrial diamonds 0:07:41.880 --> 0:07:46.160 were finding their way to Nazi occupied Belgium. Belgium had 0:07:46.200 --> 0:07:49.360 long been a center of diamond industry, but under German control, 0:07:49.640 --> 0:07:53.600 any material flowing through Antwerp was by definition serving the 0:07:53.680 --> 0:07:58.720 access war effort. To American analysts, that implication was unavoidable. 0:07:59.080 --> 0:08:01.800 There was only one entity that controlled large stockpiles of 0:08:01.840 --> 0:08:06.880 diamonds to beer. US intelligence tracked one smuggling operation into 0:08:06.920 --> 0:08:10.679 occupied territory, but when investigators tried to follow the trail 0:08:10.760 --> 0:08:12.800 further back towards the mines. 0:08:12.680 --> 0:08:13.400 It vanished. 0:08:13.920 --> 0:08:19.400 The supply chain dissolved into shell companies, intermediaries, and deniable transactions. 0:08:19.760 --> 0:08:24.360 Nothing could be conclusively proven, but suspicion hardened into belief. 0:08:25.000 --> 0:08:30.960 American officials pressed Britain to investigate to Beers directly. Britain declined. Instead, 0:08:31.200 --> 0:08:35.080 they suggested a so called security review be performed. The 0:08:35.160 --> 0:08:37.840 experts that would be selected to conduct it would be 0:08:37.880 --> 0:08:41.360 mining engineers and diamond specialists, all approved by the head 0:08:41.360 --> 0:08:45.680 of de Beers himself, Sir Ernest Oppenheimer. To Washington, the 0:08:45.760 --> 0:08:49.000 approach looked less like an investigation and more like a 0:08:49.040 --> 0:08:54.680 performance trust collapsed. Internal memos from the era described throwing 0:08:54.720 --> 0:08:59.120 alarm amongst defense planners. One conclusion surfaced again and again 0:08:59.200 --> 0:09:03.480 in classified discussions in the next war, the United States could. 0:09:03.280 --> 0:09:04.559 Be cut off entirely. 0:09:05.120 --> 0:09:08.680 De Biers controlled a choke point for diamonds. This was 0:09:08.720 --> 0:09:12.120 not paranoia, it was math. If De Beers chose to 0:09:12.160 --> 0:09:16.240 restrict shipments or redirect them, the US industrial machine would 0:09:16.320 --> 0:09:20.160 grind to a halt within months. Aircraft production would slow, 0:09:20.440 --> 0:09:25.559 tooling precision would degrade. Weapons manufacturing would suffer cascading failures. 0:09:25.840 --> 0:09:28.760 A modern army, it turned out, could not function without 0:09:28.760 --> 0:09:37.200 diamond dust. As the war wound down, the message in 0:09:37.320 --> 0:09:40.839 Washington was clear. The United States could never again allow 0:09:40.880 --> 0:09:44.200 a foreign cartel to control a material so central to 0:09:44.280 --> 0:09:48.480 national defense. The war ended in nineteen forty five, but 0:09:48.559 --> 0:09:52.360 the unease did not the same year, the US Justice 0:09:52.400 --> 0:09:56.880 Department finally moved against the diamond cartel. A formal antitrust 0:09:56.960 --> 0:10:00.520 case was filed against De Beers, accusing it of monopolizing 0:10:00.559 --> 0:10:04.440 the global diamond trade, including in still diamonds vital to 0:10:04.520 --> 0:10:09.360 American defense, but the case collapsed almost immediately. De Beer's 0:10:09.400 --> 0:10:12.720 had no offices on US oil, no executives within reach 0:10:12.760 --> 0:10:16.120 of American courts, and no assets the government could seize. 0:10:16.520 --> 0:10:20.240 So Washington changed their tactic. If it couldn't break the 0:10:20.280 --> 0:10:24.080 cartel through the courts, it would break its leverage through science. 0:10:30.760 --> 0:10:33.600 Life can be pretty stressful these days. You want to 0:10:33.640 --> 0:10:37.280 know what makes me feel better? Licorice from the Licorice Guy. 0:10:38.760 --> 0:10:41.880 Call me crazy, but it's true because I love licorice. 0:10:42.120 --> 0:10:45.040 Longtime listeners of bread Piled America know that licorice is 0:10:45.080 --> 0:10:48.920 my absolute favorite candy, and the very best licorice, hands down, 0:10:49.040 --> 0:10:51.720 comes from the Licorice Guy. I know licorice, and it 0:10:51.760 --> 0:10:54.520 doesn't get any better than this. What truly sets it 0:10:54.559 --> 0:10:57.600 apart is its flavor and its freshness. The softness of 0:10:57.640 --> 0:11:00.760 this licorice will blow your mind. I've never had anything 0:11:00.840 --> 0:11:03.880 like it. The Licorice Guy offers jumbo or licorice in 0:11:04.000 --> 0:11:08.840 nostalgic seasonal flavors a red, blue, raspberry, cinnamon, watermelon, black, 0:11:08.920 --> 0:11:11.520 and apple. Trust me, they are all delicious. What I 0:11:11.640 --> 0:11:13.800 also love about the Liquorice Guy is that it's an 0:11:13.800 --> 0:11:16.559 American family owned business, and you all know that I'm 0:11:16.600 --> 0:11:19.960 a big proponent of supporting American companies. Right now, Red 0:11:19.960 --> 0:11:22.839 Pilled America listeners get fifteen percent off when you enter 0:11:23.080 --> 0:11:27.520 RPA fifteen at checkout. Visit Licoriceguide dot com and enter 0:11:27.760 --> 0:11:32.199 RPA fifteen at checkout that's licoriceguide dot com. They ship daily, 0:11:32.400 --> 0:11:34.960 treat yourself and those you love, and taste the difference. 0:11:38.800 --> 0:11:40.240 Welcome back to red pilled America. 0:11:40.880 --> 0:11:43.240 So by the end of World War Two, the US 0:11:43.320 --> 0:11:47.439 Justice Department filed an antitrust case against a Beers, accusing 0:11:47.520 --> 0:11:51.760 it of monopolizing the global diamond trade, including industrial diamonds 0:11:51.880 --> 0:11:55.839 vital to American defense. But the case collapsed almost immediately. 0:11:56.400 --> 0:11:59.679 De Beers had no offices on US soil, no executives 0:11:59.679 --> 0:12:02.560 within reach of American courts, and no assets the government 0:12:02.600 --> 0:12:06.720 could see. So Washington changed their tactic. If it couldn't 0:12:06.720 --> 0:12:09.040 break the cartel through the courts, it would break its 0:12:09.080 --> 0:12:13.040 leverage through science. In the late nineteen forties, the US 0:12:13.160 --> 0:12:17.280 government quietly began laying the groundwork for a domestic alternative. 0:12:17.720 --> 0:12:21.080 The same wartime research apparatus that had produced radar, jet 0:12:21.120 --> 0:12:25.000 engines and the atomic bomb was repurposed for a new mission. 0:12:25.440 --> 0:12:29.040 The Office of Scientific Research and Development and its successor 0:12:29.080 --> 0:12:34.400 agency began pouring money into fundamental material science. High pressure physics, 0:12:34.520 --> 0:12:39.280 carbon crystallization, metallurgy at extreme temperatures, all components needed to 0:12:39.320 --> 0:12:44.040 theoretically make diamonds in a lab, Scientists experimented with massive 0:12:44.120 --> 0:12:48.160 presses capable of exerting pressures found only deep inside the Earth. 0:12:48.480 --> 0:12:51.440 They toyed with graphite behavior under heat and stress, and 0:12:51.559 --> 0:12:54.480 designed furnaces that could hold temperatures high enough to force 0:12:54.559 --> 0:12:59.320 carbon atoms into new arrangements. Inside the Pentagon, industrial diamonds 0:12:59.360 --> 0:13:03.480 were formally classified as a critical material. Internal mammals warned 0:13:03.520 --> 0:13:07.200 that foreign controlled supply chains were unacceptable, that reliance on 0:13:07.280 --> 0:13:11.640 a single overseas cartel posed an existential risk, and quietly 0:13:11.880 --> 0:13:16.880 American corporations were encouraged to act. Companies like General Electric 0:13:17.400 --> 0:13:21.320 GE had the engineers, capital and laboratories, and now they 0:13:21.360 --> 0:13:25.600 had a mandate reduce dependence onto beers, create a domestic 0:13:25.679 --> 0:13:29.800 source of industrial diamonds, and break the choke point. Sometime 0:13:29.880 --> 0:13:32.960 in the early nineteen fifties, GE launched what it called 0:13:33.000 --> 0:13:36.680 the Super Pressure Project, a secret internal program aimed at 0:13:36.760 --> 0:13:39.840 doing what no one had ever done before, produced diamonds 0:13:39.920 --> 0:13:44.079 without minds. At first, even insiders weren't. 0:13:43.800 --> 0:13:44.880 Sure it was possible. 0:13:45.280 --> 0:13:48.480 Diamonds weren't just carbon. They were carbon arranged in a 0:13:48.640 --> 0:13:52.800 very specific lattice, forged under crushing pressure and intense heat 0:13:53.120 --> 0:13:55.079 over a long geological time. 0:13:55.160 --> 0:13:56.400 But that was the old assumption. 0:13:56.800 --> 0:14:00.480 What if nature's timetable could be accelerated, the Earth's mantle 0:14:00.559 --> 0:14:04.120 recreated in a machine, general election should pursue the answer 0:14:04.160 --> 0:14:07.200 to these questions, and by the mid nineteen fifties they 0:14:07.280 --> 0:14:08.040 had a breakthrough. 0:14:08.240 --> 0:14:11.959 In nineteen fifty four came a landmark in Man's search 0:14:12.040 --> 0:14:15.760 for knowledge about his world. Scientists of the General Electric 0:14:15.800 --> 0:14:19.760 Company in the United States produced man made diamond for 0:14:19.800 --> 0:14:20.720 the first time. 0:14:21.200 --> 0:14:26.040 Inside GE's secret super pressure project, scientists subjected ordinary carbon 0:14:26.120 --> 0:14:30.560 graphite to conditions that until then existed only deep inside 0:14:30.640 --> 0:14:35.360 the Earth pressures, approaching sixty thousand atmospheres temperatures above fifteen 0:14:35.440 --> 0:14:39.800 hundred degrees celsius. They combined carbon with metal catalysts and 0:14:39.920 --> 0:14:43.400 forced it violently into a new form. The result was 0:14:43.440 --> 0:14:47.120 a crystal with the same atomic lattice as a natural diamond, 0:14:47.360 --> 0:14:51.560 the same hardness and structure, the same fundamental identity. These 0:14:51.600 --> 0:14:55.120 were not diamond imitations. There were diamonds, but they were 0:14:55.120 --> 0:14:59.080 not diamonds for engagement rings. They were small, rough, and granular. 0:15:01.600 --> 0:15:05.880 They were industrial diamond. And that distinction mattered because for 0:15:05.960 --> 0:15:09.760 decades the beers had treated industrial diamonds as an afterthought, 0:15:10.000 --> 0:15:13.040 a byproduct of gem mining. Now, for the first time, 0:15:13.200 --> 0:15:16.800 a company outside the cartel could produce diamonds on demand. 0:15:17.360 --> 0:15:20.120 De Beers didn't yet realize it, but the era of 0:15:20.160 --> 0:15:23.840 a diamond being forever quietly began to crack. For the 0:15:23.840 --> 0:15:27.360 first time since Cecil Roads consolidated the diamond fields of 0:15:27.400 --> 0:15:31.000 South Africa, de Beers did not control all diamond supply. 0:15:31.560 --> 0:15:35.360 A US based corporation could now produce diamonds without asking 0:15:35.400 --> 0:15:38.160 permission from the Earth or from the De Beer's cartel, 0:15:42.520 --> 0:15:46.520 and Ernest Oppenheimer understood immediately what that meant, because even 0:15:46.560 --> 0:15:50.120 though these early synthetic diamonds weren't suitable for jewelry, they 0:15:50.160 --> 0:15:54.840 attacked the monopoly at its most sensitive point. Control. Diamonds 0:15:54.840 --> 0:15:58.200 had always drawn their power from scarcity, from the idea 0:15:58.440 --> 0:16:01.960 that they were rare, that they arrived only on nature's timetable. 0:16:02.800 --> 0:16:06.280 Had just demonstrated that this was no longer true, at 0:16:06.360 --> 0:16:10.480 least not for industrial use. And once that spell was 0:16:10.480 --> 0:16:12.920 broken in machine shops, it was only a matter of 0:16:12.960 --> 0:16:16.240 time before the question arose, if diamonds can be made 0:16:16.240 --> 0:16:19.920 for industry, why not for jewelry. De Beers understood the 0:16:20.000 --> 0:16:23.920 danger immediately, and it quietly began making synthetic diamonds itself. 0:16:24.760 --> 0:16:28.520 Ernest Oppenheimer died in nineteen fifty seven, but unlike when 0:16:28.600 --> 0:16:32.200 Rhoades passed, there was no power vacuum. The cartel transitioned 0:16:32.240 --> 0:16:36.400 smoothly from founder to air. Ernest's son, Harry Oppenheimer, was 0:16:36.480 --> 0:16:39.720 already deeply embedded in the business before his father's death. 0:16:40.120 --> 0:16:43.120 He became chairman of Anglo American in nineteen fifty seven, 0:16:43.240 --> 0:16:46.320 and three years later chairman of de Beers, with Harry 0:16:46.320 --> 0:16:49.040 at the helm. In the nineteen sixties, de Beers launched 0:16:49.080 --> 0:16:52.600 its own high pressure, high temperature research programs, the same 0:16:52.600 --> 0:16:57.080 basic approach ge had pioneered. Over time, this secretive research 0:16:57.200 --> 0:17:00.720 arm would formalize into a company with an almost ironic name, 0:17:00.920 --> 0:17:04.760 Element six, reference to carbon's position on the periodic table, 0:17:04.880 --> 0:17:08.080 the building block of diamonds. By the nineteen eighties, you 0:17:08.119 --> 0:17:10.439 would have thought these two behemoth companies would have been 0:17:10.520 --> 0:17:13.680 locked in a brutal zero sum war. On one side, 0:17:13.680 --> 0:17:17.399 to Beers, a century old cartel that had mastered scarcity, 0:17:17.520 --> 0:17:21.480 psychology and control. On the other hand, General Electric, the 0:17:21.520 --> 0:17:25.760 American industrial giant that had learned how to manufacture diamonds, 0:17:26.040 --> 0:17:29.040 but the two weren't at war. The two companies instead 0:17:29.080 --> 0:17:33.640 circled each other cautiously, almost respectfully. As the eighties came 0:17:33.680 --> 0:17:38.080 to a close, the battlefield had stabilized, not into free competition, 0:17:38.280 --> 0:17:42.480 but into something colder, a duopoly. Together, ge and de 0:17:42.560 --> 0:17:46.520 Beers controlled roughly ninety percent of the industrial diamond market. 0:17:46.840 --> 0:17:50.000 They did not need to fight openly. In fact, fighting 0:17:50.040 --> 0:17:54.399 would be disastrous. If either side flooded the market too aggressively, 0:17:54.640 --> 0:17:58.840 prices would collapse. Stability became more valuable than victory, and 0:17:58.960 --> 0:18:02.840 so without formal treaties or public agreements, the industry settled 0:18:02.880 --> 0:18:06.600 in to a tense equilibrium, two giants, one market, and 0:18:06.680 --> 0:18:10.960 a shared interest in keeping diamonds natural and synthetic expensive. 0:18:11.720 --> 0:18:15.000 The two companies learn to move carefully, to watch each other, 0:18:15.160 --> 0:18:22.240 and eventually to align, which brings us back to Brussels 0:18:22.320 --> 0:18:25.760 in January nineteen ninety two, at the Royal Windsor Hotel, 0:18:25.960 --> 0:18:28.560 in a polished dining room, with two men sitting across 0:18:28.560 --> 0:18:31.359 from each other at a small table, the ge man 0:18:31.400 --> 0:18:35.040 Peter Friends, and the executive connected to De Beer's Peter Lotier. 0:18:35.600 --> 0:18:39.240 After dinner, Friends takes de Beer's upcoming price increases and 0:18:39.320 --> 0:18:43.959 faxes those prices directly to GE's headquarters in Ohio. Within days, 0:18:44.040 --> 0:18:48.320 General Electric raises its own industrial diamond prices in parallel 0:18:48.359 --> 0:18:51.480 with de Beers to the US Justice Department. This is 0:18:51.560 --> 0:18:55.840 textbook price fixing, and in nineteen ninety four federal prosecutors 0:18:55.880 --> 0:19:00.520 make their move. General Electric is indicted, so is Debier's, 0:19:00.720 --> 0:19:04.040 though only on paper because de Beer's refuses to appear 0:19:04.080 --> 0:19:10.480 in U s Court g egos to trial. Its defense 0:19:10.560 --> 0:19:15.240 is technical, careful, and narrowly successful. Prosecutors cannot prove that 0:19:15.280 --> 0:19:20.040 the corporation itself knowingly directed collusion without access to Deber's 0:19:20.080 --> 0:19:24.639 internal records unreachable. As long as Debier's remains outside US jurisdiction, 0:19:24.960 --> 0:19:29.280 the case weakens. General Electric is eventually acquitted, but Debier's 0:19:29.320 --> 0:19:33.800 remains under indictment, and the consequences are immediate and lasting 0:19:34.440 --> 0:19:38.679 for years afterward. Debier's executives avoided traveling to the United States, 0:19:38.840 --> 0:19:42.160 entirely knowing they could be arrested the moment they landed. 0:19:42.640 --> 0:19:46.560 The cartel that once operated visibly, confidently and above scrutiny, 0:19:46.840 --> 0:19:51.200 was now exposed. Russia was beginning to sell outside the cartel. 0:19:51.600 --> 0:19:57.720 Canada was developing an independent diamond supply, Australia was moving 0:19:57.720 --> 0:20:00.680 its stones off the de BER's pipeline, and far more 0:20:00.760 --> 0:20:05.399 dangerous than any newly discovered mind technology was accelerating. The 0:20:05.440 --> 0:20:08.800 indictment over Brussels didn't end the diamond cartel, but it 0:20:08.880 --> 0:20:12.240 marked the moment when its powers stopped being absolute. De 0:20:12.359 --> 0:20:16.280 Biers was no longer the unquestioned master of the diamond world. 0:20:16.600 --> 0:20:20.240 It was a company under pressure from governments, from competitors, 0:20:20.320 --> 0:20:24.080 and from science itself. In two thousand, the once head 0:20:24.080 --> 0:20:28.480 of de Bers, Harry Oppenheimer, passed away. His son, Nicki Oppenheimer, 0:20:28.680 --> 0:20:31.480 had taken over De Beers two years earlier, and he 0:20:31.560 --> 0:20:35.760 did something unthinkable. The same year his father died. Niki 0:20:35.840 --> 0:20:39.720 started to dismantle the cartel model, the very system that 0:20:39.760 --> 0:20:43.680 had made to Bers powerful. Cecil Roads built the monopoly, 0:20:43.880 --> 0:20:48.159 or Nestoppenheimer perfected the cartel, Harry Oppenheimer preserved it, and 0:20:48.280 --> 0:20:52.159 Nicki Oppenheimer dissolved it. After more than a century of 0:20:52.240 --> 0:20:55.960 single channel control, De Beers officially ended the central selling 0:20:56.040 --> 0:21:02.679 organization's dominance over global diamond distribution. In its place, to 0:21:02.720 --> 0:21:06.280 Beer embarked on a new strategy, one that sounded almost 0:21:06.400 --> 0:21:11.280 mundane by comparison. It would become a normal company by competing, marketing, 0:21:11.520 --> 0:21:16.240 and selecting partners instead of commanding obedience. This was not evolution, 0:21:16.640 --> 0:21:20.199 it was retreat. The cartel was over in two thousand 0:21:20.240 --> 0:21:24.200 and one, De Biers was taken private. Ownership was consolidated 0:21:24.240 --> 0:21:28.280 among three key players, Anglo American, the Oppenheimer family, and 0:21:28.320 --> 0:21:32.199 the government of Botswana. Removed from public markets, de Beers 0:21:32.200 --> 0:21:36.040 could restructure quietly without shareholder's scrutiny and prepare for a 0:21:36.119 --> 0:21:40.080 future no longer built a monopoly. But there was another motive. 0:21:40.800 --> 0:21:44.480 For decades, De Biers had avoided the United States, unwilling 0:21:44.520 --> 0:21:48.600 to subject itself to antitrust enforcement. Now, with the cartel 0:21:48.640 --> 0:21:52.480 effectively dismantled, the company needed to clean up its legal exposure. 0:21:52.960 --> 0:21:56.240 That meant resolving its long running conflict with the US 0:21:56.320 --> 0:22:00.480 Justice Department. De Biers ultimately settled its anti trust issues, 0:22:00.600 --> 0:22:04.159 paying millions in fines and accepting restrictstions that cleared a 0:22:04.240 --> 0:22:07.720 path for limited re entry into the American market. The 0:22:07.800 --> 0:22:12.400 company that once dictated terms to governments was now negotiating permission. 0:22:12.920 --> 0:22:15.639 And then came the final signal. Of what was really 0:22:15.680 --> 0:22:17.200 happening in the diamond industry. 0:22:17.760 --> 0:22:21.400 In twenty eleven, the Oppenheimer family, the dynasty that had 0:22:21.440 --> 0:22:25.479 transformed to beers into the most successful cartel in modern history, 0:22:25.880 --> 0:22:29.840 sold its remaining stake to Anglo American. Just like that, 0:22:29.920 --> 0:22:32.679 the family that had ruled the diamond world for nearly 0:22:32.720 --> 0:22:36.240 a century was gone. To some, it looked like a 0:22:36.280 --> 0:22:39.800 simple business decision, but to the more discerning watchers it 0:22:39.880 --> 0:22:43.840 appeared to be foresight because by twenty eleven, the pressures 0:22:43.920 --> 0:22:46.359 that had cracked the cartel were no longer peripheral. 0:22:46.600 --> 0:22:47.400 They were central. 0:22:47.960 --> 0:22:52.399 Labs that synthesized diamonds were improving. Detection between natural and 0:22:52.520 --> 0:22:56.040 lab grown diamonds was getting harder. Consumers were beginning to 0:22:56.080 --> 0:23:00.679 ask uncomfortable questions. If lab grown diamonds are chemically diamonds 0:23:00.720 --> 0:23:03.679 and experts can't easily tell them apart, aren't they just 0:23:03.760 --> 0:23:07.680 real diamonds? The forever diamond illusion that had held for 0:23:07.800 --> 0:23:11.200 one hundred years was still standing, but it was no longer. 0:23:10.960 --> 0:23:12.480 Stable, and the people. 0:23:12.240 --> 0:23:15.160 Who knew at best were getting out. Because you see, 0:23:15.240 --> 0:23:18.680 the Oppenheimers knew that scientists had made a breakthrough forty 0:23:18.760 --> 0:23:23.360 years earlier, and that breakthrough was finally becoming economically viable. 0:23:26.840 --> 0:23:29.600 Want to listen to Red Pilled America ad free, then 0:23:29.640 --> 0:23:33.280 become a backstage subscriber. Just go to Redpilled America dot 0:23:33.320 --> 0:23:36.280 com and click join in the top menu. Join the 0:23:36.320 --> 0:23:39.680 fanbam and help us save America one story at a time. 0:23:41.000 --> 0:23:42.520 Welcome back to Red Pilled America. 0:23:43.320 --> 0:23:47.240 In the early nineteen seventies, Deep inside General Electrics labs, 0:23:47.440 --> 0:23:54.520 something quietly extraordinary happened. GE scientists succeeded in producing something new. 0:23:54.560 --> 0:23:58.400 Not dark, opaque diamonds for grinding wheels, but gem quality 0:23:58.480 --> 0:24:03.320 diamond perfectly crystalline, chemically identical to stones pulled from Earth, 0:24:03.720 --> 0:24:06.480 the kind of diamonds that were mounted on engagement rings 0:24:06.480 --> 0:24:10.960 and branded as Forever. The BBC reported on g's breakthrough 0:24:11.000 --> 0:24:11.920 in nineteen seventy. 0:24:12.080 --> 0:24:16.120 Although industrial diamonds have been manufactured before, this secret recipe 0:24:16.160 --> 0:24:20.359 will produce the world's first synthetic gem diamonds. Graphite granules 0:24:20.359 --> 0:24:24.240 are squeezed and fused into a pure, unmarked diamond crystal, 0:24:24.440 --> 0:24:26.159 and they claim that it's fit for the brow of 0:24:26.160 --> 0:24:28.280 a prince or the left hand of a pretty girl. 0:24:28.720 --> 0:24:34.640 It was a stunning moment, and yet the diamond cartel 0:24:34.720 --> 0:24:35.440 didn't feel it. 0:24:35.680 --> 0:24:37.920 Because there was a catch, actually several. 0:24:38.440 --> 0:24:43.200 First, the process was staggeringly expensive. The stones were still small, 0:24:43.440 --> 0:24:47.320 typically around a carrot or less, and producing them required 0:24:47.520 --> 0:24:51.760 enormous energy, massive presses, and extreme temperatures. In other words, 0:24:51.920 --> 0:24:54.800 g could make gem diamonds, but at a cost so 0:24:55.000 --> 0:24:58.080 high that they posed no immediate threat to the natural 0:24:58.119 --> 0:25:02.399 diamond business. At the time, even optimists believed these stones 0:25:02.440 --> 0:25:07.240 would remain scientific curiosities, too expensive, too limited, and too impractical. 0:25:07.680 --> 0:25:11.119 The illusion of diamond scarcity remained intact. But by the 0:25:11.200 --> 0:25:16.119 nineteen eighties that illusion began to weaken, not publicly but technically, 0:25:16.560 --> 0:25:20.879 because GE wasn't alone anymore. Multiple actors had cracked the 0:25:20.920 --> 0:25:25.280 same basic problem Deber's own research teams, Soviet and later 0:25:25.440 --> 0:25:30.080 Russian labs, as well as Japanese and European material scientists. 0:25:30.160 --> 0:25:33.000 All of them could now produce gem quality diamonds in 0:25:33.040 --> 0:25:37.200 a lap, not cheaply, but reliably. High quality Yellow diamonds 0:25:37.200 --> 0:25:44.440 in particular, became easier to manufacture and quietly without fanfare. 0:25:44.720 --> 0:25:47.400 Some of these stones began to slip into the market, 0:25:47.760 --> 0:25:52.000 occasionally mixed with natural diamonds, and passed along without disclosure 0:25:52.280 --> 0:25:55.720 because no doubt, some unscrupulous people in these labs knew 0:25:55.760 --> 0:26:00.000 that detection was becoming difficult Under a jeweler's loop. Many 0:26:00.080 --> 0:26:04.960 of these stones were indistinguishable from natural diamond. Synthetic gems existed, 0:26:05.000 --> 0:26:08.719 but they were niche. The public remained unaware. The diamond 0:26:08.800 --> 0:26:12.320 myths survived another decade, but in the nineteen nineties the 0:26:12.400 --> 0:26:17.399 quiet trickle became a stream. Russian labs expanded their high. 0:26:17.280 --> 0:26:18.800 Pressure, high temperature production. 0:26:19.160 --> 0:26:22.720 They created more stones and lab facilities, and those lab 0:26:22.800 --> 0:26:26.160