Friday, May 15, 2015

A More Ethical Engagement Ring

I am engaged! When I proposed to my wonderful girlfriend (now fiancée), Jessica Hawkinson, I had so many things I wanted to say, I almost forgot to get down on one knee to ask “will you marry me?” I didn’t forget; she graciously said yes; we kissed; we cried; we kissed again, and then she put on the ring – a diamond engagement ring.

If you believe the commercials, women like diamonds; lots of big diamonds. When discussing what type of ring she might want, my fiancée had a different request: she wanted the ring to be as ETHICAL as possible in the sourcing of the materials and the use of labor. Engagement rings are usually composed of primarily diamonds and gold[1] so when thinking about sourcing materials ethically, we are thinking primarily about ethically sourcing diamonds and gold.

For both of us, the meaning behind the ring is the most important thing, and having a ring that means people are exploited or slaughtered to mine precious resources, the environment is freely damaged, or extractive institutions remain in power is not appealing.  

However, going more ethical is much trickier than just going bigger. What makes one purchase decision more ethical than another? For me, the goal was to make a purchase decision that measurably improves lives, the environment, or the world more than walking into a mall store and buying a diamond ring would.


We could choose not to buy a ring, but 1) She wanted a ring 2) I wanted to buy a ring and 3) Choosing a different item doesn’t necessarily resolve ethical issues.

How about a ring with an alternative stone? Alternative stones that don’t have the “bloody” reputation of diamonds are an option, though they share a lot of the same problems as diamonds because they are mined valuables mined in countries with weak, extractive institutions. Some jewelers are able to work with individual suppliers of alternative stones to ensure that those stones are mined under the highest ethical standards. But, you better be really confident in your jeweler because a lot of this is on scout’s honor.

Another potential concern is that alternative stones are softer than diamonds. A diamond is a 10 on the Mohs scale of mineral hardness. Sapphires and rubies are a 9. Emeralds are about a 7.5. So, sapphires and rubies will do better than emeralds standing up to use and abuse, but how could I give my perfect 10 anything less than a perfect 10?

Vintage Rings

Guilt-inducing slogans non-withstanding, I have nothing against buying nice pieces of jewelry in the future, but at this time for better or for worse, diamonds rings still say “engagement” best. One alternative option to the mall store is to go with vintage jewelry or a family heirloom. Bluntly, this is the “used” option.

Maybe great-grandma had a perfectly nice ring which might give the engagement ring extra meaning. Or, buy a vintage ring. Vintage jewelry has the appeal of being eco-friendly (no reprocessing of the raw materials to form a new ring) and that is reflected in the price – vintage is usually cheaper than new. 

For my fiancée and me, we did not have workable family heirlooms or see vintage jewelry that we particularly liked. Hey, the search doesn’t stop when you find the first ethical option; style matters, too!

The Market for Gold

Well, if reusing a ring is not a great option, what about one that uses recycled gold? Gold can be recycled from out-of-style jewelry, broken smartphones, or other electronics. In fact, recycled gold is a source that has already been tapped: approximately a third of the gold on the market is recycled. Buying a 100 percent recycled gold ring seems better than buying one that is not 100 percent recycled, but there is a problem: gold is a fungible commodity[2].

It doesn’t matter where gold comes from. Whether it is used in electronics, rings, or as money, whether it comes from South Africa, Alaska, or recycled electronics, gold is gold is gold. All that matters for the gold market is the total supply and total demand of gold. If I switch to demanding a ring’s worth of recycled gold from a ring’s worth of mined gold, total gold demand (i.e. demand for mined gold plus demand for recycled gold) isn’t reduced. Thus, the incentives facing gold suppliers to supply gold (recycled, mined, or otherwise) stay the same, so their behavior doesn’t change, either.
Buying recycled gold makes you feel better and gives a great story for your ring, but it doesn’t actually change the gold market. It’s hard to see how paying for that great story is more ethical if the criteria for a purchase decision being more ethical is for the purchase to make a measurable difference.

Given this, I felt that reducing my demand for gold by choosing a lower carat band option on the ring was a more ethical way to go (lower carat options use more of other metals where mining may have less impact). This is a delicate trade-off. Quality is important, too![3]

More Ethical Diamonds

Luckily, things in the diamond market aren’t so dire. The jewelry industry has been somewhat on top of things. In conjunction with governments and other organizations, the industry abides by the Kimberley Process, a certification program to “ensure that diamond purchases were not financing violence by rebel movements and their trade allies seeking to undermine legitimate governments.” Companies really do want to try to give customers what they want, and what they do not want is to be funding civil wars.

Because Kimberley Process members account for 99.8% of the global production of raw diamonds, one can imagine the standards are not quite as tight as some consumers would like. For instance, can I really believe Russian-mined diamonds are not funding uprisings in Ukraine?

How about just getting a diamond from a nice, quiet, peaceful country with high standards and strict labor laws like Canada? When you buy a random diamond, there is a chance that it could be Canadian. But, if you want a guarantee that a diamond is Canadian, you have to be willing to pay more. You are certainly paying for peace of mind, but there are downsides. The extra money could be spent to make the world a better place in other ways, the mining still causes environmental impacts that may not be priced into the diamond, and Canadian diamonds may be mined by companies that mine elsewhere.

Lab-Created Diamonds

Diamonds are forever, but that doesn’t mean they have to be forever mined.  A great alternative to mined diamonds that has recently come onto the market are lab-created diamonds.

Lab-created diamonds are actual carbon diamonds; not CZ or glass. Some are made in the USA and polished in Canada, so there are no questions about the labor standards. In addition, they are often cheaper than mined diamonds, freeing up money to do more good in the world (or buy a pint or thirty of ice cream).

What’s really appealing about man-made diamonds is that they are a new product competing directly with mined diamonds. Lab-created diamonds allow you to buy a diamond without buying a mined diamond, and they allow you to support new competition in an industry that historically needs it. Never underestimate the power of competition. That’s a direct force that causes change in the industry now. The more people who demand lab-created diamonds instead of mined diamonds, the more lab-created diamonds will be provided, the more companies are incentivized to innovate, and the less profitable mined diamonds will be.

Given these considerations, I purchased a ring that had a lab-created diamond, lower gold content, and employed people fairly throughout the supply chain. I am happy to say that I proposed with a more ethical diamond engagement ring.   

[1] There are other metals, too, since a pure gold band would be too soft for normal wear. White gold, in particular, is mixed with light colored metals like nickel or palladium and is sometimes plated in another metal like rhodium.
[2] When economists think of fungible goods, gold is often #2, right after cash. However, Dogbert might prefer oil as an example:
[3] Researching this topic has made me aware of the importance of increasing the supply of gold to the market. While I can’t impact the gold market directly now with my ring purchase decision, I can make sure the supply of recycled gold is as high as possible by recycling electronics I have rather than throwing them out. And who knows? Maybe in the future mining asteroids will solve the problem of mining on earth.

Sunday, November 9, 2014

Mastery by George Leonard

I finished reading Mastery: The Keys to Success and Long-Term Fulfillment by George Leonard.

The first sentence of the back cover sums up this book well: "Drawing on Zen philosophy and his expertise in the martial art of aikido, bestselling author George Leonard explains how the process of mastery will enable you to vault over the pitfalls of the quick fix to attain a higher level of excellence and a deeper sense of satisfaction."

The path to mastery, Leonard claims, is not linear; it's a bunch of plateaus with brief spurts of improvement.

People become frustrated on those plateaus, thinking they should be progressing, but aren't. In some cases, your output could actually be worse on a plateau just before you put it all together and get to the next level of mastery. The language Leonard uses reminds me a lot of Seth Godin's more recent The Dip. Godin's picture is different, but the language he uses to describe the dip is very similar to how Leonard describes the plateau.

The big point (once Leonard presents what the path to mastery looks like) is this: to achieve mastery, you have to love the plateau; you have to find joy in regular practice. "At the heart of it," he says, "mastery is practice. Mastery is staying on the path."

I found this book to be a nice description of how learning is not linear and self-improvement is hard. Mastery takes work, and you have to love that work, not just the end result.  In addition to emphasizing the importance of tools to improve your internal well-being and mindset (e.g. use visualization, maintain physical fitness, avoid drugs, negotiate with your own resistance to change),  I also appreciated Leonard's nod to to how external factors positively and negatively affect your path to mastery (e.g. quality of instruction, external motivation such as prizes). A lot depends on our own actions, but sometimes others' actions matter, too.

Wednesday, November 5, 2014

Money Well Spent

Americans spent about $7.4 billion for Halloween.

Americans spend about $7 billion dollars on potato chips annually.

Americans spent about $3.7 billion on the 2014 midterm elections.

There is a lot of money that gets "thrown away" on elections. But for less than the cost of Halloween, or less than the cost of our consumption of potato chips, Americans perpetuate elections that are free and fair enough that leaders and ruling parties from DC all the way down to your local ward voluntarily give up power when they are simply out-voted. That's money well spent.

Saturday, August 16, 2014

Sentences I Didn't Expect to See

From Ken Fisher's The Only Three Questions that Still Count: Investing by Knowing What Others Don't:
Finance Theory is quite clear the only rational basis for placing a market bet is if you believe somehow, some way, you know something others don't know. The only question that counts is: What do you know that others don't?... 
Markets are pretty efficient at pricing all currently known information into today's prices.... Instead, it's surprise that moves the markets (pages x-xi).
These are not sentences I was expecting to see in a book by a billionaire fund manager.

Thursday, August 14, 2014

Finally, Some Quality Ice Cream!

I love ice cream. However, the lack of high quality ice cream shops in Chicago baffles me. Do Chicagoans not like ice cream? Do we ship the good cartons out? Is the regulation of ice cream shops stifling? I am not even kidding.

I mean, look at this picture of one of the "best" options for ice cream in Chicago according to seriouseats:

Pro tip: If you have to smother your ice cream with cheap, sugary toppings to make it taste better, then it's not the best ice cream. (Not that I wouldn't eat a delicious banana split -- you just don't need the best ice cream to make one.)

Luckily, someone heard me scream for some quality ice cream. Jeni's, one of the top two brands in Columbus has opened its doors in the Chicago area last summer. Even better, the other one of the top two brands (another Ohio-founded and my personal favorite), Graeter's, is considering up to four locations in Chicago! I even saw a Graeter's ad for the first time over the weekend, so hopefully that is signalling a serious entry into the market. Graeter's is already in some grocery stores in the area, but just having one Graeter's ice cream shop would probably double the greatness of Chicago as a city.

I can't wait!

Tuesday, August 5, 2014

The Paradox of Choice?

Over a long weekend, I got a chance to visit my friends Tony and Shanna at their new home in Colorado. On Friday we had lunch at Half Fast Subs -- their menu is quite extensive!

The line moved quickly and I chose the N'Awlin's Shrimp Po-Boy. It sounded good and was also one of the specials of the day, so I didn't have to search the menu very long. It was a very good choice.

Thursday, July 31, 2014

Popcorn Estimation

One thing I like to do when traveling out of Midway is to stop at Nuts on Clark for some popcorn. Today, the customer in line in front of me jovially asked the cashier:

"How much would a twenty-eight ounce bag cost? $600? I bet that guy would walk away with a lot of popcorn! But he would be really happy!"

I guess he didn't notice that a two pound bag of popcorn costs only $21.50.

I thought about mentioning that the one pound bag only costs $11.25 but he looked really happy buying two 8 ounce bags for $6 each. Maybe he was sharing.