Diamonds are Forever

From Dialectic of Enlightenment:

How formalized the procedure is can be seen when the mechanically differentiated products prove to be all alike in the end. That the difference between the Chrysler range and General Motors products is basically illusory strikes every child with a keen interest in varieties. What connoisseurs discuss as good or bad points serve only to perpetrate the semblance of competition and range of choice … the universal criterion of merit is the amount of “conspicuous production” of blatant cash investment. The varying budgets in the culture industry do not bear the slightest relation to factual values, to the meaning of the products themselves. (113)

This phenomenon is remarkably well documented; recent research in marketing shown just how accurate Adorno’s and Horkheimer’s above claim really is. Robert Cialdini, author of Influence: the Psychology of Persuasion, lists six “weapons of influence,” which he applies to marketing.

1. Reciprocity - People tend to return a favor
2. Commitment and Consistency - If people commit, orally or in writing, to an idea or goal, they are more likely to honor that commitment because of establishing that idea or goal as being congruent with their self image. See also: cognitive dissonance.
3. Social Proof - People tend to do things that they see other people are doing.
4. Authority - People will tend to obey authority figures, even if they are asked to perform objectionable acts.
5. Liking - People are easily persuaded by other people that they like.
6. Scarcity - Perceived scarcity will generate demand.

Here are two cases applying these principles:

1. A common tactic used by appliance sellers is to always have 30 to 50% of the stock regularly listed as on sale. When the customer sees the one they are interested in they ask if it is available and they are told that the salesman is pretty sure that he just sold the last one to a customer earlier that day. Suddenly, the appliance on sale has become scarce. This leads the customer to ask if the salesman could check to make sure there is not another one in stock. Surprise: there almost always is. In fact, if there isn’t, it’s usually because the distributor is purposely under-stocking certain goods to create the illusion of scarcity, and therefore the illusion of value.
2. A suit salesman (“Sid”) and his brother (“Harry”) came up with a rather unorthodox tactic in the thirties: Sid would tell the customer, who was trying on a suit in front of a three way mirror, that he, Sid, had a hearing problem. As they continued to talk, Sid would constantly ask the customer to speak louder. If they customer wanted the price of the suit, Sid would yell to his brother at the back of the store: ”Hey Harry how much for this suit?” Harry would say: “For that beautiful all-wool suit? $42 dollars.” At that point Sid (having appeared to have misheard his brother) would look at the customer and say “$22 dollars.” Thinking that they were getting a great (if unscrupulous) deal on an expensive product, customers would impulsively buy the suit.

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As it turns out, Horkheimer and Adorno were right: there is basically no connection between price and value. Our conceptions of economic worth are entirely determined by (capitalistic) manipulation of Cialdini’s six principles, or “weapons.” Currency becomes a lot like language: there is no relationship between thoughts, symbols, and referents, and if you look closely enough, everything breaks down to a metaphor—a flawed attempt, as Nietzsche points out, to grasp reality. Consider diamonds:

http://www.youtube.com/watch?v=L3hYIq7lIDU&feature=related

We’re told that diamonds are worth money because they’re rare (scarce), because other people think they’re worth money (social proof), and because advertising agencies tell us they’re worth money (authority). We have been conditioned to represent diamonds with romantic relationships (i.e. with people that we like or even love)—with whom we will undoubtedly reciprocate by buying and giving even more (hopefully expensive) material goods. Better yet, we have been conditioned to see ourselves in light of certain ideals—namely, responsibility, stability, and permanence—of which diamonds are a symbol (commitment and consistency).

That's the story.  Here's reality:

Diamonds have no value. We have been told that they’re scarce because it gives them the illusion of value, and this view had been propagated through advertising and cultural expectations of gift-giving. In reality, you could go to Africa and practically trip over them. The worth of a diamond is determined not by the quality of the diamond, or who found the diamond, or who killed how many people to procure the diamond, but rather (first) who inspects and cuts the diamond, and (second) who sells the diamond. There is nothing in a diamond but the ideals that we’ve been told it represents.

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