Minerals, Collecting, and Value across the US-Mexico Border

6. Mineral Marketplaces, Arbitrage, and the Production of Difference

6 In November 1977, a prospector named Felix Esquivel entered the Ojuela mine in Mapimí, Durango, Mexico, and discovered a pocket of over twenty specimens of legrandite (a zinc arsenate). He and his brother sold them to a dealer, Jack Amsbury, via his Mexican agent Shorty Bonilla , for 48,000 old pesos, or approximately $4,000. Amsbury, with the help of Gene Schlepp, a Tucson dealer, resold the best piece (later christened the Aztec Sun) from the pocket (figure 6.1) to Miguel Romero for $30,000. Felix Esquivel reported to us that the buyer (he did not remember who) did periodically pay him 1,000 new pesos—between $60 and $100, depending on the year—as further remuneration. Romero held onto it for the rest of his life, planning to donate it with the rest of his collection to the University of Arizona Mineral Museum, where the best of his collection was on loan for many years (see chapter 4). In 2008, his heirs sold it to a Lebanese collector for something in the neighborhood of $1.7 million. The vast sums made on this one piece emerge through a process of arbitrage: that is, profit made by taking advantage of price differences for the same commodity in different markets. The opportunity for arbitrage creates markets for mineral specimens—if the chance to make a fantastic profit by buying a mineral at its source and reselling it in Tucson or another marketplace did not exist, the mineral economy would be a fraction of what it is. In the financial world, arbitrage often refers to the nearly simultaneous purchase and sale of financial commodities (securities, foreign exchange ) to take advantage of price discrepancies. However, the term has been used more broadly to refer to things like maneuvering between different regulatory contexts in banking and elsewhere (regulatory arbitrage ), offshore production to take advantage of a cheaper labor market Mineral Marketplaces, Arbitrage, and the Production of Difference Minerals, Collecting, and Value across the U.S.-Mexico Border 164 (geographic arbitrage), or the appellation d’origine contrôlée system (cultural arbitrage) (Ghemawat 2003). Much of this literature assumes difference solely as a precondition rather than an effect of arbitrage.1 And in the cases of labor and capital costs, it also assumes that this difference is likely to disappear. Indeed, economic theory argues that arbitrage undercuts the conditions of its own existence (for a discussion of the temporal implications of this, see Miyazaki 2003). The more people practice arbitrage, the smaller the gap Figure 6.1. The Aztec Sun legrandite specimen, Ojuela mine, Mapimí, Durango, Mexico. © Jeff Scovil. Reprinted with permission. Mineral Marketplaces, Arbitrage, and the Production of Difference 165 between markets that makes arbitrage possible is supposed to become. The formation of mineral markets in Tucson and Mapimí not only depends on the ongoing production of difference (among places, people, and objects), but also that the very practices of arbitrage between these markets help to create difference. At least sometimes, difference can be an effect of arbitrage as well as a cause. The Mapimí market has been around for over fifty years, and opportunities for arbitrage are not going away. This is evident to anyone who goes to the two places, but actually quite hard to measure, for two reasons. First, some dealers enter into long-term financial relationships with suppliers so that it is difficult to bound and compare particular transactions. Second, dealers typically will not tell people how much they spent for a particular piece and to ask would court distrust (this taboo against asking is a strategy that helps to keep the price gap open).2 However , the profit realized on the above-mentioned legrandites is high but not preposterous, particularly for a new and unexpected find. Moreover, though prices in Mapimí are going up, they are not rising so much as to force the arbitrage gap to close. Because Tucson is only a one or two days’ drive from Mapimí and many Mexican miners and local mineral dealers have crossed the border multiple times (for instance, to work as carpet-layers in Denver and elsewhere), transportation costs and political boundaries cannot fully explain this situation. These markets’ heavy dependence on arbitrage would suggest that the gap in prices would close as economic equilibrium is reached. Why, then, does the gap persist over time? One answer lies in the uneven access to social and cultural capital...