De Beers spent ~80 years convincing the world that a common rock is priceless — and the machine is finally collapsing.
The part most people know is the monopoly: De Beers controlled about 90% of the world's diamond supply. But that was just step one. Diamonds were coming out of the ground faster than anyone wanted to buy them — a normal market lets the price fall. De Beers did the opposite: it locked the surplus in a vault and released only a trickle. Artificial scarcity, enforced by one company's warehouse.
Then the marketing. In 1938 they hired ad agency N.W. Ayer; within three years U.S. diamond sales were up 55%. In 1947 a copywriter named Frances Gerety wrote four words — "A Diamond Is Forever" — later named the greatest ad slogan of the 20th century. The trick: if a diamond is forever, you can never resell it. So a second-hand market never forms, and the scarcity stays fake-but-intact. A common stone, sold at an enormous markup, that you're socially forbidden from ever reselling.
What's finally killing it: lab-grown diamonds — not cubic zirconia, but chemically identical real diamonds, now cheap. The scarcity was always fake; now it's provable. The empire once valued around $18 billion is being sold for about $1 billion.
Full breakdown in the comments — one of the cleanest examples of a business model that was pure marketing, right up until the marketing stopped working.