1.

Sapphires have many uses. Because of their hardness they're useful as an abrasive; you can make sandpaper out of them. Because of their strength and some other special properties, they're used as a high-tech engineering material, for instance in dental implants and as a support for integrated circuits. And they're visually beautiful, so people make jewelry out of them.

If you want a sapphire, there are basically three ways to get one. The first way is kind of boring, but the only practical way for most of us: lots of people, for various reasons, already have sapphires. So you can get yours from some other human being. For instance, you could buy it, steal it, receive it as a gift, or similar. But that raises the question of where the sapphires come from in the first place.

It turns out that sapphires are naturally occurring. They're formed by geological processes in the Earth's crust, and in places where they occur, it's possible to dig them out of the ground. That's the second way of getting them, and it's been an important industry in some places for centuries.

The third way is to use technology to create sapphires. If you melt aluminum oxide, with some trace additives to create the colour, in a special high-temperature furnace, you can solidify it into a sapphire crystal.

It is possible to determine which of those latter two processes a given sapphire came from - but it isn't easy. At the level of an ordinary user, natural sapphires (created by geology and dug out of the ground) are indistinguishable from artificial sapphires (created in a flame furnace). They're available in the same range of colours. They make equally good sandpaper. They make visually identical jewelry. All the practical applications of sapphires work equally well with both kinds. In order to tell the difference you have to put the crystals under a microscope and have someone with a lot of expert skill look at them, in which case they'll probably be able to tell the difference by comparing whether the minor imperfections are more typical of those created by one or the other process. But I emphasize that the origin of the crystal makes no difference to any practical application.

Or does it?

Here's the thing: if you want to buy a very good quality blue sapphire, cut for jewelry use and having the weight of five carob seeds (one gram), the price will be about $12,000. Gem pricing is a very complicated business and it depends on many variables, and for the moment I'm skipping over the important issue of "heat treatment"; but that number is good enough for this discussion. If you want to buy a comparable artificial stone - same weight, same colour, same clarity, and I emphasize indistinguishable to the end user - the price will be more like $200. That's a factor of 60 difference between the two.

Why?

2.

I said it before, but I'll say it again: artificial sapphires are indistinguishable from natural ones for all practical purposes. Artificial sapphires are real sapphires. They're not something other than sapphires being used as a substitute. It's not like comparing diamond with cubic zirconia, where they're different chemical substances and so cubic zirconia doesn't really have exactly the same properties (hardness, light refraction, and so on) as diamond. All sapphires are alpha-aluminum oxide; they really are that substance, no matter where they came from.

There are differences that make it possible to distinguish the two sources, but you need both special equipment and expert knowledge to find them when you specifically look for differences. Even the experts have been fooled on occasion, as the technology of creating artificial sapphires has improved over the years. It is not reasonable to claim that there's any physically-real property of natural sapphires that makes them better for any purpose. Even technically advanced users, like the sandpaper manufacturers, won't see any difference in their results from using natural or artificial sapphires, all other things being equal. You can't tell by looking at your sapphire jewelry whether it's made with natural or artificial stones.

But there must be something special about those natural sapphires if people remain willing to buy them at a sixty-to-one premium. What?

Maybe the people who buy natural sapphires are just stupid. But the people who buy natural sapphires have a lot of money to do it with, because natural sapphires are expensive. People don't get to have that much money if they're in the habit of spending it foolishly. Human stupidity goes pretty far, but it doesn't seem like it's a plausible explanation all by itself.

Maybe it's the situation of the "greater fool." Anything, even if it has no or negative value, can be a good buy at a high price if you're confident of selling it to someone else at an even higher price. That's how speculative bubbles work - people buy South Sea shares or whatever, even at absurdly high prices, not because they really want to have those things, but because they expect to find someone else, a "greater fool," to sell it to at a profit later. It's sound business and a great way to make money as long as you aren't the last fool in line. But with a long-term industry like sapphire mining, it's hard to believe that that's what's going on. Speculative bubbles last a year or two. The technology for making artificial sapphires has existed for more than a century. If the price gap between natural and artificial sapphires were purely due to a speculative bubble, the bubble should long since have collapsed with all the natural stones in the hands of the biggest fools and the original sellers long since out of the business. Sapphire mining should not exist anymore. Instead, the price gap persists. It's clear that there is a substantial population who consider natural sapphires to be worth far more than artificial sapphires for themselves, not just because they hope to find greater fools later, and in fact that population is big enough to support the industry.

Maybe there is some kind of environmental issue involved; in other words, maybe the people who buy sapphires are interested in the side effects of the sapphire-obtaining process, and they want a stone that has been associated with the side effects of mining rather than the side effects of manufacture. This kind of thing does make an important difference in some other markets, notably with diamonds: people who buy diamonds want, and will pay more for, diamonds that are not "conflict diamonds." They want to know that theirs were mined without being part of certain exploitive activities that harm human beings. If artificial gem diamonds were available, this factor would be one of their selling points, a reason to prefer them over natural diamonds. Similarly, some people want to eat either farmed, or wild-caught, fish in preference to the other, specifically because of different environmental impacts associated with the different ways of getting fish. On that particular issue it's not even clear which one is better environmentally, it probably depends on finer details, and there are other important reasons to prefer one or the other also; but the point is that many people do care about the distinction in some way. When it comes to sapphires, it's hard to imagine any environmental metric by which mining natural sapphires has less impact than manufacturing artificial ones, but maybe we could imagine that sapphire buyers for some perverse reason want to buy the more environmentally damaging product. Well, we can simulate that for them - let's sell artificial sapphires with a promise that we'll release X number of tonnes of toxic chemicals into the environment for each one sold; or exploit Y number of indentured miners, or whatever it takes. In the alternative, if people really do think that manufacture of artificial sapphires causes greater environmental harm, then let's apply more technology and figure out how to make green sapphires, with as little environmental impact as possible. Note that even with current technology, artificial sapphires are made from bauxite, about the closest thing you'll get to a renewable mineral, and the furnaces are fuelled with carbon-free hydrogen; meanwhile, natural sapphires are by nature a non-renewable resource. It sure sounds like this kind of reason would lead to artificial sapphires being preferred; and yet, people still pay much more for natural ones. So, assuming we create whatever level of environmental impact people want, whether it's higher or lower, is it plausible that this kind of effort will create a situation where natural and artificial sapphires sell at the same price?

Maybe those microscopic differences between natural and artificial sapphires are more important than I claimed. Maybe people actually can, on some subliminal level, see the tiny inclusions in the stones and perceive the natural-style inclusions as more beautiful than the artificial-style inclusions. Well then, let's perfect the technology. With a little more work we can surely create artificial sapphires that really will be indistinguishable from natural ones even to the experts. We can get the inclusions right, we can get the isotope ratios right, we can get the "silk" right, and so on. If we completely exclude any possibility of there being any physical difference between natural and artificial sapphires, will sapphire buyers be willing to pay the same price for the two?

Maybe it's not any physical property of the natural sapphires, but their rarity, that makes them more valuable. The Earth won't yield up very many natural sapphires, far fewer than people would like to have, whereas the supply of artificial sapphires is effectively unlimited. So let's make some rare artificial sapphires! I'd like to introduce you to Mr. S. Narayanann, Master Gem Artificer. He operates the #14 Sapphire Furnace at the historic factory in Uzhavoor, making top-quality artificial sapphires by a difficult and labour-intensive process. Being human, he is mortal, and won't live forever; after he retires, there will never again be any more artificial sapphires made by him. Each one comes with a Certificate of Authenticity proving that it really came from S. Narayanann and the #14 Sapphire Furnace. Such gems are, obviously, very much rarer than natural sapphires - both in terms of the number available per year, and the number of years they'll be available. So, will sapphire buyers be willing to pay, let's say, the bargain price of $50,000 for one of the genuine authentic #14 Sapphire Furnace artificial sapphires made by Mr. S. Narayanann and comparable to natural stones valued at $12,000 (common as dirt, by comparison) and other artificial stones valued at $200 (beneath contempt)?

Maybe it's not rarity, but something special about the fact that the gems were dug out of the ground. So let's dig artificial sapphires out of the ground! We'll make some artificial sapphires and bury them, and then build a mine and dig them back up. For a small added fee, let's say an extra $5000, we'll even give you a teaspoon and let you dig up your sapphire yourself. What a treat! Will these stones be worth the same as natural sapphires?

Maybe there is something special about the random properties of a natural product. Maybe sapphire buyers like the fact that no two natural stones are exactly identical - each one has its own slightly different size and its own slightly different shape and pattern of inclusions. If you describe precisely the stone you want to buy, it's quite probable that no natural stone perfectly meets that description - unlike an artificial stone which can be custom-made to order. In some industrial applications that require tight control of physical properties, this seems like a big win for the artificial sapphires; and yet, people continue to pay much more for the natural sapphires. So let's make randomized artificial sapphires! We'll throw out our Six Sigma books, let the manufacturing process run out of control, and start taking customer orders and delivering products that don't actually meet the customers' specifications. Will this method of doing business allow us to get the same prices for our artificial sapphires that people are willing to pay for natural sapphires? Will we be able to stay in business at all?

Maybe there is something special about the mental state of the buyer, associated with their knowing the intangible fact that the sapphire is natural. As they say, beauty is in the eye of the beholder. In that case, let's create the valuable mental state in some other way. We'll sell artificial sapphires but we'll tell the buyers that they're getting natural ones, and charge natural-sapphire prices! Since the buyers want to have the mental state that comes from believing they're getting natural sapphires, it is clear that we are doing them a big favour by helping them to have that mental state. Is this a good idea?

3.

We sent an unskilled weekend rockhound to Sri Lanka, an island famous for its sapphire mining, but to a particular district in Sri Lanka where nobody has looked for sapphires before. After poking around for a while looking for sapphires, he said he couldn't find any. So we sent in a highly trained mining engineer, with a Ph.D. in geology, to investigate the same area, and she found valuable sapphires there. So we have learned something: it matters who is doing the digging.

We sent the weekend rockhound to mining school until he got a degree, and then sent him back to the same spot in Sri Lanka, and this time he, too, was able to find sapphires. So we've learned another thing: sapphire-finding is a skill that can be learned.

We sent them both to Coober Pedy, Australia, the opal capital of the world, and told them to look for sapphires there. The weekend rockhound got distracted in the opal mines and didn't find any sapphires. He found about $5 worth of opals, and had a lot of fun. The professional mining engineer said, "There are no sapphires here. The rocks in this place are not the kind of rocks in which sapphires occur; the geological history of this place does not include the processes that form and transport sapphires; you're wasting my time."

We know that it matters who is doing the digging; we know that sapphire-finding is a skill that can be learned. So it appears that our mining engineer isn't so hot after all - she didn't have the skill to dig up sapphires in Coober Pedy. Should we send her back to mining school? Should we fire her and find a better engineer, one who could dig up sapphires in Coober Pedy? Or should we go dig somewhere else?

We asked an expert on achieving goals in life, who said, "Anywhere you go, you will be there; the one constant is you. As a result, you cannot hope to experience change outside yourself until you stop being afraid of change inside yourself. The engineer must give up her defeatist, bitter negative attitude that talks about what is 'not' possible, and transform herself into someone who is no longer afraid to affirm the reality of sapphires in her life."

We asked an expert on education, who said, "Texas A&M has a good geology program. She should get a B.A. from there!"

We asked a guy on the Internet, who said, "You should use artificial sapphires, they're much cheaper!"