A Critique of “Speculative Commodities”: Rethinking the Value and Commodification of Gem-Resources Under Extractive Capitalism

ABSTRACT

The value of many natural resources is not fixed; it depends on factors both intrinsic and external to the commodity; such is the case of precious stones. These commodities are termed “speculative commodities.” Here, I take the example of gemstones and conceptually trace and analyse the process of their commodification, with the help of Marxist theory and its various derivatives. The process of commodification and value addition that these resources go through are unique: partly, value is added and created through labour and their specialised artisanal crafts, but the major part of the profit is generated through discursive mechanisms of stories and narratives, the manipulation of supplies, and the manufacturing of demands through advertisements around each stone to make it valuable and pricey. The diamond and gemstone industry reaps extravagant profits from the otherwise useless pieces of stones – barring some industrial uses and the aesthetic value that they have. But their aesthetic dimension hides the greed, lust, violence, and aggression inherent in their commodification – many of these stones emerge from conflicts in the Global South – and that this source and history only add to their allure.

KEYWORDS:

• Commodification
• commodity pathway diversion
• supply chain capitalism
• diamond
• coloured gemstones

Acknowledgements

I would like to thank my respondents for their participation in interviews and informal discussions that allowed me to better understand the field. I owe a great deal of gratitude to Professor Kuntala Lahiri-Dutt, without whose encouragement this article would not have been written.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 Though commodification and commoditisation are sometimes used interchangeably, the term commoditisation, is used as a technical term in the context of business theory in the 1990’s and signifies a process by which the market for an already existing product has become a commodity market due to availability of range of products and stiff competition of price and quality, thus moving away from monopoly market to perfect competition market (Rushkoff 2005).

2 Alienation, commodity fetishism, and reification are integrated into the “labour theory of value.” The concept of reification has been further discussed and elaborated by Lukács ((1923) 1972).

3 The sources of gemstones are, generally, located at the surface – just a few feet below the topsoil of the ground and these are easy to mine with little investment and unsophisticated tools – but these are scattered over a wide area; therefore, large companies are generally not interested in organized mining. The sources of diamonds are available at greater depth, and concentrated along a vertical column, called Kimberlite pipes, and extraction requires investment, technology, and sophisticated engineering. But these sources are also concentrated at one place, and diamonds – which are more expensive than gemstones – can yield windfall profits; therefore, large companies invest in mining. Artisanal mining of diamonds – mainly in secondary mining areas, which develop around primary mines, and in riverbeds –is scattered in nature, and artisanally mined diamonds therefore travel through the same supply chains as gemstones (Roy Chowdhury and Lahiri-Dutt 2019).

4 Even studies that show that Diamonds and Gemstones can be an alternative investment say that it should be done with caution, and only to diversify the investment portfolio, but precious metals such as Gold is most certainly a better investment (Ariovich 1985; Low, Yao, and Faff 2016).

5 Interview with a diamond trader (associated with D Damas Company) in Kolkata, India on 10 August 2019.

6 Interview with an artisanal miner in Chanthaburi, Thailand on 9 July 2016.

7 Emeralds can be produced artificially in the lab through Chatham process (commercially since 1945) and Rubies through the Verneuil process since 1902 (Watkins 2020).

8 Thomas also (1991) also talks about “entangled objects” and the roles they play as commodities and as gifts.

9 Interview with a gem trader in Kolkata, India, who regularly buys gemstones and diamonds through auctions, on 12th August 2019.

10 For details on the debate between Karl Marx (labour theory of value) and Adam Smith (price of commodity), please see Ormazabal (2006).

Additional information

Funding

Research Fund (International Faculty Support), HSE University.