Mafias are organized crime groups. Notably, mafias emerge because of the power vacuum left by the lack of state enforcement because of economic, social, political, geographic, prohibition and ethnic distance factors as well as the collapse of state institutions. Mafia organizations started in Italy as early as 1863 (Catino, 2014). Later, they spread to other countries such as the United States (US). In the US, Cosa Nostra Americana was created around 1910 (Varese, 2011). Still, this Italian-American mafia is active despite the intensified crackdown. Based on FBI report of 2005, about 1000 members of the Italian-American mafia are currently active (Mastrobuoni, 2013). This research paper reviews the economic perspective of Italian Mafia in America.
Economically, mafias take part in criminal business activities and provide protection to individuals who participate in both legal and illegal activities. The demand for protection occurs when the government is unable to resolve disputes in permissible markets and as such, entrepreneurs engage in the sale of illegal commodities in illegal markets (Varese, 2011). The individuals under protection are entitled to make predetermined payments to the organization on a regular basis. The reputation of the mafia to pose a threat is essential in encouraging illegal entrepreneurs to purchase protection insurance against extortion by other gangsters.
The emergence of Cosa Nostra Americana is associated with the protection vacuum left after the introduction police reforms. Before the enactment of police reforms, the illegal markets in the US were under the protection of corrupt police officers and local politicians. The moment police reforms were introduced to curb corruption illegal markets such as prostitution and gambling were forced to seek new protectors (Varese, 2011). As such, unemployed immigrants with mafia skills from southern Italy filled the protection vacuum left by police officers and local politicians.
Again, mafias seek to supply commodities which the state has failed or is unwilling to provide. Notably, the expansion of Cosa Nostra Americana in the 1920s and 1930s is associated with government’s unwillingness to allow the sale, manufacturing and transportation of alcohol beverages (Winters, Globokar, & Roberson, 2014).
During Prohibition era, the federal government interdicted everything relating to alcohol beverages except the consumption. The initiative was not comprehensive, and such the Prohibition was a gift to the US mafia. Remarkably, the 18th Amendment, which outlawed the sale, manufacture and transportation of liquors, created vacuum for the establishment of illegal businesses (Eig, 2010). The increased demand for illegal businesses during Prohibition era encouraged many people to seek mafia services.
In some cases, organized crime groups expand their activities into legal distribution and production of goods and services such as investment banking and construction. For instance, with the influx of immigrants in some countries, mafias have shifted their focus from drugs to the administration of migrant reception centers (Politi, 2015). In the US, at the time when alcohol prohibition was petitioned, Cosa Nostra Americana had control of numerous labor unions. Cosa Nostra Americana used these labor unions to establish employer cartels and take over companies (Jacobs, & Cooperman, 2013). In this regard, it was to enforce and maintain “legal” cartels in numerous industries.
In conclusion, the economic activities of Cosa Nostra Americana relate with filling the vacuum left by the government in the provision of commodities and the protection of illegal business activities. The creation and expansion of Cosa Nostra Americana were attributable to the enactment of police reforms and alcohol Prohibition era, as both acts left commodity provision and protection vacuums. In retrospect, Cosa Nostra Americana has existed as an alternative to providing what government agencies have been unwilling or unable to provide to the society.
References
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Politi, J. (2015). Italy’s Mafia learns to profit from the migration crisis. FT.com. Web.
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