A
Diamond in the Rough
Renée Rose Shield Mines the Closed Culture Of New
York City's Venerable 47th Street
By
ALIZA PHILLIPS
Even during the years of urban decay when New York City could hardly be considered the crown jewel of American metropolises, 47th Street between Fifth and Sixth avenues remained, as it had been, a proverbial diamond in the rough.
As the epicenter of the city's Diamond District, today the block is home to more than 2,600 independent businesses that traffic in the cutting, trading and selling of the world's most precious stones. Set north of the hustle and bustle of Grand Central Station and south of the heart of commercial midtown, the block offers bargains and jewelry galore, along with a peek into the not-often-mined, closed culture of a trade still dominated by Old World Jewish jewelers and the wave of chasidic and Middle Eastern Jewish cutters and salesman who followed them into the trade.
As Renée Rose Shield tells it, in these days of the global economy, the diamond industry — like other businesses long entrenched in their ways — finds itself at a crossroads. Faced with sharper competition from South Africa's dominating De Beers Investment conglomerate, which in 2000 took steps toward marketing its own stones for the first time, the middlemen of 47th Street are being forced to find new ways to sell their wares.
"Profit margins are increasingly narrow because of increasing consolidation within the trade," said Shield, an anthropologist and the author of "Diamond Stories: Enduring Change on 47th Street" (Cornell University). "De Beers has changed, and it has consolidated, and it's dealing more and more with wealthier customers. There's a need to cut out the middleman along the way, and the middlemen are the guys upstairs with 10 children."
Shield, a clinical associate professor of community health at Brown University, hails from a family of immigrants from Antwerp that had been involved in the diamond trade in Europe. (Her brother, Forward arts and culture editor Daniel Asa Rose, has also discussed the family's history in the trade in his book "Hiding Places: A Father and His Sons Retrace Their Family's Escape from the Holocaust.") With changes afoot on 47th Street, a tour with Shield is a chance to see how the Diamond District has changed over the years, and how it has remained the same.
We met recently on a warm spring day, wandering up and down the block past the closed-to-the-public Diamond Dealers Club, the focus of Shield's book, "where the diamond-business movers and shakers come to buy and sell their precious goods." Shield led us into the New York Jewelry Center, one of the block's many "exchanges," bazaar-like halls where dealers of diamonds, pearls, antique jewels and the like hawk their wares to fellow merchants, the about-to-be-married and the public at large.
In their stall at the back of the center, Esther and Daniel Navaro, who have been married for 52 years and followed their children to New York from Israel, said that business has been slow for a while. Back in Tel Aviv, they had also been in the business, but here, where they traffic in "ruby, sapphire, emerald," Daniel confided in a thick Israeli accent, there has little business for half a year. "We just spend money to come here and go home," Esther said.
At the front of the hall, Babak Chafé, an immigrant from Iran — "Yes, Jewish. Circumcised" — did not seem to be experiencing a slowdown in business. As he answered calls and bantered with his fellow merchants, he told us that business has been "fantastic." "Down for other people, but not for me," Chafé said with bravado, noting that he got into the game of selling platinum and diamond Italian clasps on the recommendation of a friend. "Love of money," was another reason the Great Neck, Long Island, resident cited. "I'm a Yankee now."
Shield said the industry took hold in the area after World War II, when it moved north from Manhattan's financial district. Belgian Jews who had fled the Nazis pioneered the business in America, bringing their trade with them from the Old World to the New. These men, many of whose families had worked in the trade for generations, started out at a time
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Diamond Stories: Enduring Change on 47th Street
June,
2002
by Renee Rose Shield
Cornell
University Press, 288 pages ($29.95)
Review
by Robert Rosenberg
The Thrill of the Trade -- in Diamonds
New York's diamond exchange is highly idiosyncratic, yet a new book on it
reveals important clues about how markets work.
Markets -- whether
for stocks, bonds, commodities, or even ideas -- dominate the global economy.
In fact, much of the recent Internet Revolution was built on the notion of creating
new markets: business-to-consumer markets, business-to-business exchanges, and
electronic bazaars, where everything from steel to freelance services could be
traded.
Then there's the diamond market, a complex yet loosely structured system that's part souk, part multibillion-dollar global exchange. This curious blend is what makes Diamond Stories: Enduring Change on 47th Street such an engrossing read.
Ninety-five percent of all diamonds imported into the U.S. pass through New York's 47th Street between 6th and 7th Avenues. Author Renee Rose Shield provides a rich, rare glimpse into how this secretive market operates. High-tech wizardry? Not here. Men sit across from each other, throwing back and forth pieces of paper stuffed with diamonds. It's virtually unencumbered by formal contracts. Breaches and disputes are settled through arbitration.
INSIDE THE VAULT. How can such a complex, high-stakes market function in this way? To answer that question, Shield, who is related to several diamond traders, takes readers high above the raucous, bustling sidewalks of Midtown Manhattan and into the Diamond Dealers Club, a high-security "human vault" located in a nondescript office building off Fifth Avenue. It's in the DDC that business is carried out via a sophisticated web of social relationships, which the author explores through interviews with actual traders.
The scene she sets is surreal: long tables with men sitting across from each other, waiting to be shown a dazzling stone like no other. Traders, who carry expanding wallets filled with diamonds enclosed in elaborately folded paper parcels, sit and toss these parcels to one another. When a diamond catches a potential buyer's eye, he'll examine it under a loupe.
All the while, the men are schmoozing, complaining about business, trading stories and jokes, and engaging in what Shield refers to as the "dance of deal-making." When an offer is finally accepted, the parcel paper with the stone is placed in a small manila envelope with the buyer's name written across the seal.
GETTING PERSONAL. The players' fascination with all the aspects of the business -- moving and showing stones, buying and selling, matching orders and expectations, negotiating terms of credit -- is what emerges most strongly. And while the market for diamonds may seem unique, it has much in common with the stock, bond, and commodities markets: Diamonds are actually quite abundant, almost a commodity, really. The market is linked globally, and information, rumor, and "noise" affect it and its participants.
What's unique to the diamond business is the level of trust that predominates and the importance of one's personal reputation. "Even when deal-making is private, people know whether you are behaving correctly, suspect whether you are succeeding, doubt whether you can be trusted," Shield notes. "In a profound way, one's life is an open book."
While Shield is an anthropologist by training, Diamond Stories is more a well-told tale than a scholarly book. And although it does tell the story of diamond mining, beginning in 1867 with the discovery by an 8-year-old boy of a pebble later identified as a 21-carat diamond, the book isn't a history of the diamond cartel. That story has been told more fully elsewhere.
MARKET MUSTS. Likewise, Diamond Stories doesn't go into much detail about the diamond trade's effects on Africa, though Shield tells how the illicit trade has financed civil wars throughout the continent. At the same time, she notes, diamonds have been a positive economic force in nation-building in Botswana, Namibia, and South Africa.
And while diamonds may be synonymous with Africa in the popular imagination, Shield points out that the gems are actually mined throughout the world, with the biggest, most recent finds coming in Australia, Russia, and South America.
If the Internet Revolution and the scandals roiling the deregulated markets in energy and telecom have shown anything, it's how hard it is to create a market. From Diamond Stories, we can extrapolate a few key ingredients for success: trust between the participants, a high level of energy and excitement, and, finally, something that has been overlooked by most economists and theorists -- participants who revel in the joy of exchange.
when Jews were barred from most professions. The business soon attracted New York's growing chasidic population, many of whom were attracted to the business in part because working with fellow Jews allowed them to practice their traditions with ease. Today, newcomers to the rapidly changing business include Israeli and Russian immigrants. A mix of languages from Flemish to Yiddish to Hebrew can be heard on the street.
It's a myth that joining the diamond trade is or was a way to get rich quick, said Shield, whose uncles Moishe and Shmiel worked in the business until their deaths a few years back. And while chasidic men dressed in long, black coats still stop one another on the sidewalk to chat, the age when business deals were sealed on the street with a handshake and a "mazel" have passed because of security concerns, Shield said. Life on the floor of the Diamond Dealers Club is changing as well. Success once relied on personal relationships, and while contacts are still paramount today, "making it" calls more and more for entrepreneurial ingenuity.
During the 14 years Shield worked on "Diamond Stories" — she is also a full-time mother of four — she would travel into the city from her home in Massachusetts and spend nights with one or more of her relatives. On visits to the Diamond Dealers Club with her uncles, she watched with an anthropologist's eye as they conducted business deals, and she studied the painstaking handiwork of the diamond polishers in a small factory. Without her family connections, Shield said, she would never have gained access to the club, which, true to its name, prides itself on its insider nature and has become more security conscious than ever.
Shield came to her research in part because of her interest in aging — her last book was on nursing homes. "It's an industry that supports opportunities in continuing to work," she said, noting that the social nature of the diamond business provided sustenance for the elderly. "There's a certain flexibility. This old person can come in at 10 o'clock on a Tuesday and leave at 2 o'clock to go to the doctor and maybe come back, or maybe not be there the next day." It's no surprise, then, that the diamond trade is perceived as a graying businesses, said Shield. Adding to this is the fact that children, like many of Shield's generation, are no longer as likely to join the family business. Only among the chasidic workers do sons tend to follow in their fathers' footsteps.
"Secular Jews, their children go to university and discover law, medicine and other things. The chasidim have less broad a canvas to explore, and they're going to stay closer to home," said Shield.
But for now, at least, despite the challenges the small businesses face, 47th Street remains a place where one can take a snapshot of American immigration, assimilation and transmogrification. The famed Gotham Book Mart is still in its incongruous place in the middle of the block, although its owner recently put it up for sale and is looking for cheaper digs in the neighborhood. Mike's Candy, lodged in a jewelry-shop filled alleyway between 47th Street and 48th Street, still dishes out sugary kosher delights.
And young couples looking to buy an engagement ring still wander the same passageways, past the burly men with cardboard sandwich boards offering a better deal just a few doors down.
Neighborhoods may come and go, but a diamond is forever.
