For most of the 20th century, DeBeers -- a company founded in South Africa by Europeans milking the benefits of colonialism -- controlled almost all of the world's diamond market and used it to great advantage. Diamonds aren't actually that rare, but by hording and locking up vast quantities, DeBeers realized that it was easy to keep the price artificially high. Once they were able to create the idea that diamonds are a symbol of love and that a man must present one to his future bride, billions of dollars began to pour in. "A diamond is forever," was a phrase cooked up by a marketing firm hired by DeBeers, and it was voted the best advertising slogan of the last century.
Wheat, on first glance, doesn't seem to have much in common with diamonds. The staple grain is grown by farmers around the world, and bread, in various forms, is basic of sustenance for people everywhere. One Wall Street firm apparently saw some similarities between the two. In a stunning article in this month's Harper's magazine titled "The Food Bubble," Frederick Kaufman writes about investment bank Goldman Sachs entrance into the grain futures market and how that led, in 2008, to huge price increases, food riots in more than 30 countries and tens of millions of starving people.
The irony is that, according to the story, "The wheat harvest of 2008 turned out to be the most bountiful the world has ever seen..." The bubble eventually burst, but not before Goldman made millions of dollars on the misery of desperate people around the world, and the price of wheat has never come back down to pre-bubble levels.
Diamonds are a luxury item, but people cannot survive without food, yet Goldman and other banks and investment companies are now buying and selling commodities futures to make themselves richer with no regard for the consequences to real people. I've often thought it outrageous that some people own vast swaths of land and multiple houses while others are homeless or live in shacks, but the manipulation of food prices for profit is even more clearly evil and should be unacceptable to everyone. However, it's happening right now -- in the name of free-market capitalism.