Blood diamonds civil war

Anybody have any questions on any of those economic and environmental externalities? There are other types of externalities. There are social externalities, and the example I give here is conflict diamonds. Back twenty-five years ago, a lot of the diamonds were mined in Angola or the Democratic Republic of the Congo. They're also mined in the Soviet Union, in South Africa. They were having a civil war in Angola for about forty or fifty years, and in order to pay for the civil war the rebels pressed a lot of the populace — just like they did in Colombia. The rebels in Colombia, in order to finance their war against the government, sold drugs to the United States. In Angola, they forced the people to run the diamond mines, and they would take the money from them, sell the diamonds on the open market. You weren't supposed to be able to do that, we supposedly had an embargo on conflict diamonds. But it's pretty hard to tell the difference between a conflict diamond and a non-conflict diamond. There are actually some ways, but you have to do some destructive testing on the diamond, and that's not very economical. So there's lots of problems with that.

One-sentence example of political externality. Angolan civil war separatists controlling diamond mines.

There are a lot of other externalities, and on Monday I'll talk about a couple of others. I get telling stories and I always go a little bit slower, but that's why it takes twelve lectures to give you two lectures' worth of content. Your homework — you don't have to turn it in, because I don't want to grade it — is to think about, can you think of some externalities of where we're engineering something differently because of some factor? I'll give you another political one — blood diamonds. Anybody know what blood diamonds are? They were having a civil war in Angola, and some of the separatists were taking over the diamond mines.

Social externality example. Tom extends the case to ISIS-era antiquities trafficking as a parallel structure (rebel-finance via tradable extractive goods).

Another externality is social. Conflict diamonds — anyone know what conflict diamonds are?