Here's some extensive history of the De Beers company (cartel) for anyone who really want to know the story behind it.
Up to 1982: http://www.theatlantic.com/doc/198202/diamond
Mostly recent history up to 2001: http://money.cnn.com/magazines/fortune/fortune_archive/2001/02/19/296863/index.htm
An article from 2008 about some the effect of the class action suits filed against it: http://www.baltimoresun.com/business/investing/bal-bz.ym.diamonds22jan22,0,1693898.story
The following is from the artcle from 1982, so it's somewhat outdated. I'm copying it in, because it provides some insight into just how powerful the eight decade De Beers marketing campaign was and is.
“Except for those few stones that have been destroyed, every diamond that has been found and cut into a jewel still exists today and is literally in the public's hands. Some hundred million women wear diamonds, while millions of others keep them in safe-deposit boxes or strongboxes as family heirlooms. It is conservatively estimated that the public holds more than 500 million carats of gem diamonds, which is more than fifty times the number of gem diamonds produced by the diamond cartel in any given year. Since the quantity of diamonds needed for engagement rings and other jewelry each year is satisfied by the production from the world's mines, this half-billion-carat supply of diamonds must be prevented from ever being put on the market. The moment a significant portion of the public begins selling diamonds from this inventory, the price of diamonds cannot be sustained. For the diamond invention to survive, the public must be inhibited from ever parting with its diamonds.”
Basically, the marketing created such a strong sentimental value for diamonds that they are almost never sold, thus protecting the controlled supply that has supported the diamond industry since it began.
I don't know how to respond to De Beers. I'm disgusted by their ethics and disturbed by their power, but I'm in awe of their genius and, most of all, their patience. I've never heard of a marketing campaign implemented with such a long-term view. They gained little for the first couple decades, building up the sentimental value of diamonds for the childhood and young adult years of an entire generation. It almost rivals the programs talked about in works of fiction like Dune.