Diamond's rubber and cotton African exploitation

[franklin]

Is it possible that diamond's are overpriced as a sort of way to continue exploiting people in Africa? This is probably well known but here is a random website on it

"HOW TO OPERATE A DIAMOND CARTEL: EXPLORING DE BEERS’ DOMINANCE"

prospectjournal.ucsd.edu/index.php/2009/05/key-determinants-of-diamond-cartel-success/

But I have found that allot of people truly thought Leopold was philanthropic because for one thing he had meager resources (relative to what was needed) and had difficulty eaking out a profit. Notice that in the early days a 10% import tax would have made all the difference and made the enterprise profitable, I suppose later imports were not as important as 10,000,000 people were being killed. One important lesson here is that it takes immense resources to exploit people in Africa and still does today

"Scramble for Africa" By Thomas Pakenham
books.google.com/books?id=VeZIcTKTydAC&lpg=RA1-PA397&dq=&pg=RA1-PA397#v=onepage&q=&f=false

The Congo State was overspending its income by nearly three million francs (120,000) a year. The state's whole income was less than the proceeds from one small factory in Europe, about 300,000 francs (12,000) a year, which came from the 15 per cent duty on the existing exports of ivory, rubber, palm oil and the like. Simply to finance this huge deficit without squandering money on new conquests, Leopold needed to raise a mountain of new cash, either as taxes or loans. New taxes meant import duties. But here the Berlin convergence had set an obstacle in his path as menacing as the cataracts below Stanley Pool by guaranteeing free trade for the whole 'conventional' basin of the Congo. This was the most famous clause in the General Act of 1885. It did not affect Leopold's right to tax his own exports, but it meant that Europe was free to send its manufactured goods to the Congo and that Leopold was banned from taxing them

One thing I have to ask is there any good reason cotton had to be grown in the Americas as opposed to other places like India. Perhaps later they started using Indians as standard disposable labor because Africans became too expensive, because people were once willing to go through great expense for African labor as opposed to any other. But are things deliberately being manipulated, like perhaps giving Leopold a large share of the rubber trade, in order to exploit people? Was there a specific reason rubber came from the "Congo Free State". Of course people all over the world are being exploited whither India Europe ect.

[franklin]

One thing about the "abolition movement" is it would raise the price people would be willing to pay for unfortunate Africans, so while it would not affect the price in Africa the people in Brazil would pay more, and the more that was paid the more severe and the more captives from African wars.

[franklin]

Very interesting about the price manipulation of diamonds

"Is a diamond's price a true measure of its value?"

www.straightdope.com/columns/read/2524/is-a-diamonds-price-a-true-measure-of-its-value

De Beers rarely discovers new sources of diamonds; rather, it focuses on controlling existing ones, limiting production, and if necessary buying up surplus gems and stockpiling them to prop up the market. It sets prices arbitrarily and cuts off supplies to dealers who buy through unauthorized channels. On the marketing side, De Beers hired advertising firms, starting with N.W. Ayer in the late 1930s, to render axiomatic the idea that diamonds = true love. De Beers and Ayer didn't invent diamond engagement rings but did rescue a fading concept--in 1932 worldwide diamond sales had been only $100,000. Ayer's ploys ranged from planting news stories about newly betrothed celebrities flaunting big rocks to positioning diamonds as heirlooms, preventing the market from being flooded with secondhand goods. (The market for used diamonds is dismal, by the way.) The campaign worked--U.S. wholesale diamond sales increased from $23 million in 1939 to $2.1 billion in 1979. The J. Walter Thompson agency performed a similar miracle in Japan in the 1960s, essentially creating a tradition of diamond engagement rings out of thin air.

[homeylu]

Hi Franklin, I'm curious to know what was the use of diamonds by Africans in pre-colonial times. i agree that it is an 'exploited' resource, but I would like to know how was it marketed by pre-colonial Africans, if you have knowledge of this. Thanks.

I am aware of the use of gold in pre-colonial periods as a medium of exchange. I do recall that the Mali king, once devalued gold, when he journeyed to Mecca, giving it away like candy. This was well documented in historical sources.

But what about diamonds, what did the Africans use diamonds for? Jewelry? Anyone knows?

[franklin]

As far back as the ancient Ghana empire within the empire itself there was gold inflation and the king took possession of all the gold nuggets to curb this problem. The increase in gold production was not simply stimulated by demand since even before Mansa Musa gave it out like candy world gold prices were dropping so much gold was coming from Ghana. This suggests they were manipulating world prices kind of like what is going on today

I don't know anything about pre-colonial diamonds but it does seem that for that last century there was a drive to artificially raise the price. Obviously today Africans are on the losing end of this economic warfare

[franklin]

This is highly significant because it is entirely related to many of the wars in Africa going on today. I think there is enough evidence to think that Africans were seeking to keep gold prices low while Europeans wanted to push the gold price up. The Gold Coast was supplying a good part of the world supply of gold until a great reversal where it started buying gold, the act of actually selling gold to the Gold Coast would serve to raise world gold prices.

For some evidence that Africans were trying to keep the price low it is found in the fact that many people in Mali hate Mansa Musa because he gave away so much gold. A good explanation as to why Mansa Musa gave away so much gold is that he wanted to lower the price. On the other hand in the 18th century Africans began hoarding gold as the price went up and many kingdoms outright banned the export of gold while Asante simply exported a less amount to Europeans. This is just one article about it but thinking about it more I think the Akan people on the gold Coast were trying to maximize gold exports and they could sell more if it was cheaper, this would connect the history back to ancient Ghana up to the reversal of trade on the Gold Coast. Also not mentioned here was that gold was illegally brought to Africa this perhaps could have amounted to allot that wasn't accounted for

To sum it up, the ancient Ghana empire sought to lower the price of gold, and in the 18th century Europeans pushed it up. The article is attached and can be downloaded

And the fact that the Africans were hoarding it when the price went up would give good reason to believe they were previously trying to keep it low

“Gold, Assortments and the Trade Ounce: Fante Merchants and the Problem of Supply and Demand in the 1770s Author(s)”: George Metcalf Source: The Journal of African History, Vol. 28, No. 1 (1987), pp. 27-41

Electronic page 9 and 10

www.jstor.org/pss/181447

Worse still, they often had to purchase gold from areas west of the Gold Coast proper (such as Appolonia) at I-5 times the price it commanded in the London market in terms of the prime cost of their goods.The reasons for this reversal of the gold trade are still obscure, as a consequence of the cloak of secrecy which the Akan threw over everything relating to gold. (Miles himself undertook an investi-gation of the subject but could produce no answers.) Walter Rodney suggested that Akan gold production began to decline in the early eighteenth century, and link this to the rise in profits that could be made by concentrating on slave production rather than on gold mining. If this is so it is an irony that the Europeans by promoting the slave trade were ultimately forced, much against their wishes, to carry gold to the Gold Coast. A more likely explanation of the phenomenon lies in the increasing monetarization of the Asante economy, described by Joseph LaTorre, and in the consequent hoarding of gold in Asante itself. This in turn provoked a partial monetarization of the Fante economy and undoubtedly increased the value of gold whether it was regarded as a currency or a commodity

Attachments:

[franklin]

This seems familiar to OPEC and how people in America complain about being reliant on other countries and oil prices (meaning the price that was being paid to the Gold Coast).

[franklin]

Somewhere else I had grossly mistaken on the ounce per trade an ounce of gold became worth two ounces of trade I acted as if it was the opposite ratio. However this situation meant that Europeans were obliged to bring more gold to the Gold Coast while everything else seems to have the opposite logic in which bringing more of a certain commodity lowered the price thus affecting African economies and forcing them into reliance. The interesting thing however is that Europeans sold silver to Asia but sold gold to Africa, and with illegal trading as I said it might be possible that a large amount was brought to Africa for one thing since the Europeans normally had to buy gold at 1.5 times the price in goods than what it went for in London that would give huge incentive to bring it to the Coast. On the other hand I think that the lowering of gold prices in the 19th century would be disadvantageous especially in the latter 19th century for example when gold was exploited from South Africa, world gold production increased all over the world and I've heard wages were very low to make profits

While low gold prices might have been a bad thing in South Africa (at least from something I read) the reason that Africans in earlier times would want to keep gold prices low was that was a way to get more control over world gold trade, an example of this is Hausa hats which the Chinese are able to sell because they can make things cheaper

Does anyone think that the thing about the gold prices might be true?

“Nigeria: Manufacturers frown at China’s dumping of cheap products” Friday 12 March 2010 / by Konye Obaji Ori

en.afrik.com/article17137.html

Manufacturers Association of Nigeria (MAN), have bitterly condemned China’s exaggerated dumping of “cheap and substandard” products on the Nigerian market, describing the situation as "disastrous." But Nigerian Association of Small Scale Industrialists (NASSI) have said Nigeria should see China’s invasion as a challenge to local industrialists to improve the quality of their products so they can also compete on the world stage.

According to MAN, the expansion of Chinese goods in Nigerian markets makes nonsense of recent government policy that banned importation of some foreign products as part of a campaign to support local industry, as Nigeria’s major commercial cities are now overloaded with sub-standard textiles, machinery and auto-parts….

…"They have done it not only in Nigeria but in other countries also. I was told recently that they have taken the design of a popular Hausa hat, the Zanna Bukar and are most likely going to bring their own version very soon. That is the Chinese for us," MAN’s Chairman, Mr. Bashir Borodo was quoted as saying.

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[franklin]

After having the price of gold high for all that time Africans were actually hurt when it fell like I said in South Africa wages were low this having allot to do with the price of gold being low. This despite the fact that Africans since the times of ancient Ghana were seeking to keep the price of gold low, this sort of thing is common when it comes to manipulation for example with the southern United States which became the Confederacy, they were fighting to remain dependent on the mother country of Brittan as it was this trade with Brittan in the first place that kept these states underdeveloped with cheap goods from Brittan.

One thing I want to note is that the Chinese are probably interested in raising the purchasing power of Africans so that Africans can buy more Chinese merchandise, especially since recent times since Chinese were affected by the recession. As was shown the Chinese have also designs on producing things specifically for different markets in Africa. This relates back to how the Confederacy was dependent on England because the very cheap goods that were suppressing local development then become something that they need, although cheap imports are hurting places in Africa the raising of prices on these goods also do damage. Although this article is from two years ago:

"China’s stronger currency hurting exports to Africa" February 13, 2008 by SwizStick

www.3plwire.com/2008/02/13/chinas-stronger-currency-hurting-exports-to-africa/

While many Western trade partners view the appreciation of the Chinese RMB favorably, as it makes their products cheaper for Chinese consumers, it also has the equal effect of making Chinese products more costly in their own countries. Some elements within Western governments and the trade industry shrug off such concerns, voicing the opinion that it can only help domestic manufacturers. However, in Africa it’s a different story as many consumers have come to rely on low-cost Chinese made goods much more heavily then some of the Western countries:

Concerns about rising inflation in China are also pushing Beijing to allow for more frequent fluctuation in the exchange rate. On Monday the yuan hit a record high of 7.1996 per US dollar. And analysts forecast the yuan could gain between five and nine per cent this year.

A stronger currency will not only erode the margins of traders but also make Chinese exports ranging from clothing and shoes to batteries and steel more expensive for African consumers who have become increasingly dependent on China-made goods.

China exported some $8 billion of manufactured products to the continent in 2006, according to UN trade data, including $257.5m to Kenya, almost five times the amount in 2000. Kenya also buys significant quantities of Chinese machinery, textile yarn, vehicles, batteries and steel.

[franklin]

homeylu, do you think it is possible that Africans were using the same kind of economic manipulation that Europeans are using today?

[franklin]

Steel can be included here when it comes to manipulation of prices of different items. Diamond's rubber, cotton, gold, cheap manufactured goods and steel

Apr 19, 2010 17:14:15 GMT -5 Charlie Bass said:

www.uh.edu/engines/epi385.htm

In the text it says:

[Anthropologist Peter Schmidt wanted to see a working kiln, but he had a problem. Cheap European steel products reached Africa early in this century and put the Hayas out of business. When they could no longer compete, they'd quit making steel.]

[anansi]

Well yes diamonds are not rear as a matter of fact before and even in early colonial times in Southern Africa there was a place where you could just walk up and pick-up the rocks just laying around..it is kept artificially low.

[franklin]

That really breaks the heart and also how it only benefits a few since everyone else is tricked into believing diamonds are rare or that diamonds are forever. I have a theory the same was done with sugar (in the late 17th century) by promoting consumption and driving out competition because for a time period the price was so low because of oversupply, despite the fact that sugar was a rare and expensive commodity for centuries

“The Royal African Company”
By K. G. Davies


books.google.com/books?id=qUN-VpQPvlwC&lpg=PP1&dq=&pg=PA337#v=onepage&q=&f=false

And these low levels (low levels of price), it should be remembered, were achieved at a time when, of all the English sugar-colonies, only Barbados and Nevis were producing at anything like full capacity. Had Jamaica and the others been intensively exploited and given over entirely, as Barbados was, to a sugar cultivation, the fall in price would have been even more catastrophic. . It was bad enough for planters and merchants alike. Small wonder that the former had difficulty in paying their debts to the company, or that the latter sought ways to escape from a trade that left little or no room for profit.

books.google.com/books?id=qUN-VpQPvlwC&lpg=PP1&pg=PA341#v=onepage&q&f=false

the company wrote to Antiqua in 1687: 'Though we loose much by sugers, yett the tobacco turnes much worse to account'…..

For the company and probably for other importers, the sugar-trade in this period has the appearance of an unfortunate necessity, undertaken in order that capital might be repatriated.

[franklin]

Concerning gold prices during the Scramble for Africa

Rita M. Byrnes, ed. South Africa: A Country Study. Washington: GPO for the Library of Congress, 1996.

Gold and Diamonds

countrystudies.us/south-africa/66.htm

[Gold mining companies traditionally kept expenses to a minimum by paying low wages. Gold mines became known for their often exploitative labor policies, including the use of migrant workers on limited contracts, strict worker control in company compounds, and difficult working conditions. Labor costs were especially important in determining profits, because the price of gold was set at US$35 per ounce through the 1960s. After the price of gold was allowed to float in 1968, it gradually rose in response to market demand, and companies could afford to produce less and still earn even greater profits. They then began to expand operations into so-called low-grade-ore mines. The volume of South African gold production fell, and gold prices skyrocketed to an all-time high of US$613 per ounce in 1980.]

[homeylu]

Apr 19, 2010 16:02:05 GMT -5 franklin said:

homeylu, do you think it is possible that Africans were using the same kind of economic manipulation that Europeans are using today?

Well as far as gold is concerned, it was so abundant in West Africa, that it didn't have much value to them; they were making dog collars of gold it was so worthless.

It's worthiness came to fruition when the North African began using gold as a medium of exchange; to create coins. As coin production increased, the need for gold increased. So the middle-man (Ancient Ghana/ and the Tuareg) had to find something worthy of trade for the Africans in the south.

So I would say they manipulated or rather marketed the use of salt for these purposes. Although sub-saharans had sufficient enough salt for survival, new uses of salt had to be introduced to make it worthy of a trade, such as it's use in preserving foods, and maintaining hydration in the desert.

As the demand for gold increased with the arrival of the Arabs and the introduction of gold to the Europeans who found several other uses for it, the Ghana Kingdom became more aware of it's value, and kept a grasp on the trade, by 'hiding' it's sources from the Arabs and other North Africans. In other words, they could not allow it to be known how abundant this resource was in sub-Sahara Africa, otherwise it would jeopardize their trading position.

I think Takruri pointed out to you on another thread, about how they would even go so far as to mythologize stories of cannibal Africans; anything to keep this knowledge of the source of gold sacred for several centuries.

It was around the time when Leo Africanus explored further south, that the realization of how abundant gold was in this area, that assisted in the rise of the exploitation of this commodity to Europeans.

Remember that slaves were a commodity as well, especially once the Americas became settled. When Leo Africanus first explored Mali, he recorded that the inhabitants there were so wealthy, that they all held several slaves in abundance, as well as livestock and gold. All of which would eventually be exploited by Europeans themselves, as they bypassed the so-called middle men and began to extort slaves, gold, and other major resources from Africa.

These are some of the coins used in Ancient Ghana (in the British Museum of African Theft )




Other Gold artifacts of pre-colonial Africa (Just to get an idea of what they were doing with gold.

Gold sandals, they were ballers




Before Hip Hop, the Africans had the bling (16th century gold necklace)