Diamonds Are De Beers’ Best Friend : THE LAST EMPIRE: De Beers, Diamonds, and the World <i> By Stefan Kanfer (Farrar, Straus & Giroux: $25; 374 pp.) </i>

There is a photograph I recall from the mid-1980s, a grainy, wire-service shot from an airport in Zambia. It showed a group of white men, clad in business suits and carrying briefcases, walking abashedly across the Tarmac to a reception committee of blacks. The visitors were a delegation of South African industrialists, come to seek diplomatic dialogue, if not quite separate peace, with the exiled and outlawed African National Congress.

Which, I wondered in the aftermath, was the more shocking? That the commercial establishment had flouted its own government at a time South Africa was convulsed by township insurrection and about to declare a state of emergency? Or that Pretoria let the dissidents go unpunished without so much as a banning order?

Stefan Kanfer’s outstanding new book, “The Last Empire: De Beers, Diamonds and the World,” answers both of those questions and a multitude more, stretching back over more than a century. He has taken the investigative journalist’s credo--”Follow the money”--and used the history of the famous diamond cartel as an organizing principle for understanding the epic tragedy of South Africa. More than that, he has actually justified the book’s hyperbolic subtitle, tracing the tendrils of De Beers Consolidated Mines and its parallel in the gold business, Anglo American Corporation, from Cape Town to Siberia, from London to Tel Aviv.

I cannot swear how much wholly original material Kanfer delivers, especially given the similar scope of Geoffrey Wheatcroft’s 1986 book, “The Randlords,” but he performs a first-rank job of synthesis and storytelling. “The Last Empire” abounds in careful research, intelligent analysis, graceful prose, just the sort of elements a reader has every right to expect, but so distressingly rarely finds, in prominent nonfiction. Reading this book, I was reminded of the sensation one experiences watching an Olympic figure-skater execute the compulsories: What looks so effortless is, rather, the result of painstaking craft.

Kanfer’s narrative concentrates on the period between 1867, when diamonds are first discovered near the hamlet of Kimberley, and 1992, when De Beers and Anglo America have grown to control 1,300 subsidiary businesses, 90% of the world’s diamonds and 10% of its gold. The vivid set-pieces along the way range from the raucous life of a boom town to the creation of the “Diamonds Are Forever” advertising campaign to the gay love affair conducted by Sir Cecil Rhodes, his only evident sabbatical from imperialistic adventures.

“The Last Empire,” though, adds up to much more than the sum of even such savory parts. A contributing editor of Time and the author of previous books on the Hollywood blacklist and the Catskills resorts, among other topics, Kanfer argues with both force and fact that every important event in modern South African history, from the Boer War to the imposition of apartheid to the detente with the A.N.C., derived in large measure from the diamond industry’s actions. The discovery of diamonds in Kimberley encouraged the British to colonize South Africa. The role of British and Jewish men in the development of De Beers--most notably Rhodes, Barney Barnato, and Ernest Oppenheimer--stimulated the traditional animosity of Afrikaners toward both groups. And the diamond industry, for all the corporate liberalism its leaders have espoused in the last 40 years, grew rich on the exploitation of black labor that apartheid codified. The hated pass law, in fact, had its origin not with such apartheid theorists as Daniel Malan but in the diamond-mining camps under the control of English colonialists.

If Harry Oppenheimer, the recently retired chairman of De Beers, thought that providing access to Kanfer might have earned him a sympathetic, not to say sycophantic, chronicle, then he must be dreading the decision now. For all their racism and anti-Semitism, the Afrikaners in “The Last Empire” at least express a world-view in something other than dollars, pounds, and rand. The only constant for the barons of De Beers, Kanfer makes clear, is making money. They covertly dealt with anyone who had enough diamonds to undermine the cartel’s hegemony, even such official enemies of South Africa as the Soviet Union and newly independent, black-ruled “frontline states.” Independent Israeli diamond dealers could be pressured into capitulation; Swedish and American creators of artificial diamonds could be acquired and so neutralized. It is small wonder that OPEC considered the diamond cartel to be its role model.

As for the progressive politics that several generations of Oppenheimers embodied, Kanfer reduces that, too, to an accountant’s calculation. He writes of Harry in the wake of the right wing’s epochal victory in the Parliamentary elections of 1948: “Now, as the Nationalists began to implement their harsh racial laws, he appeared to be the essence of moderation and decency. Recognized as the Opposition’s most articulate representative, he spoke out freely on two topics, money and race . . . Harry took a pragmatic approach: whatever the moral background, racial divisiveness was driving investors away. That was bad for business, bad for South Africa, bad for whites as well as blacks.”

Which brings a reader to that moment on the Tarmac in Zambia, and which convincingly explains why De Beers could get away with such seeming trea son. The diamond oligarchy has become, in some respects, more important than the government. It could not have been a secret to the ruling National Party in those years that De Beers was diversifying and internationalizing its operations so thoroughly that the threat of its leaving south Africa never needed be uttered. (Harry Oppenheimer, in public, waxed adamant about staying the course.) Without De Beers and its billions, what would white South Africa have had worth fighting a race war over?

Now that State President F. W. De Klerk has brought perestroika to Pretoria, such a critical moment may never come. But anyone following the difficult progression toward democracy in South Africa would do well, after reading Stefan Kanfer, to watch not only Nelson Mandela or Cyril Ramaphosa but also the middle-aged executive named Nicholas Oppenheimer, heir to the diamonds and gold and influence.

There is less reason than ever, in this period of political transformation, to doubt what Cecil Rhodes said decades ago: “I often go and sit at the edge of the De Beers mine and look at the blue diamondiferous ground, reaching from the surface . . . and I reckon up the value of the diamonds in the blue and the power conferred by them. In fact, every foot of blue ground means so much power.”