ARTICLE - How Does the Mafia Work?

gangsters walking down the street with tommy guns - from Penny Post newspaper

MAFIA SPECIAL 1. We look at the real way the Italian mob operates, the symbiotic state-mafia relationship and its fund redistribution network. We will also meet Europe’s most corrupt police force.

 'In an anarcho-capitalist society, who stops the mafia?' asked an online forum. This question will help us untangle some of the complexities of the mob as it addresses some of the central themes involved: the symbiotic state-mafia relationship and its fund redistribution network.


The birth of both Italy and the mafia. A historical coincidence? The ‘who stops the mafia?’ question is basically an extension of an argument constantly levelled at libertarians which posits that any non-state run society would be immediately overtaken by rampaging warlords. Some observers have noted that the mafia and the state are virtually the exact same thing. Where the state exists, the mafia flourishes. It’s certainly no coincidence that the rise of the mob took place over the precise period that statism expanded. In Italy, the mafia went from small-scale localized blood feuds in Sicily to large-scale racketeering when Garibaldi unified the various kingdoms of the region to form the country of Italy in 1861. As one historian astutely put it, the mafia couldn’t afford to be on the losing side. Put another way, the mafia goes where the money is.

Various forms of mafia have been completely misrepresented in popular culture. In fact, before proceeding it might be a good opportunity to take a closer look at how different types of mob behaviour breakdown and put rest to a few ideas which are complete fantasy.


The favours bank. First off, Italy, like most countries, suffers from a type of non-meritocratic way of doing business, often based on family, influence peddling or mutual back scratching. The late Tom Wolfe in Bonfire of the Vanities described the New York equivalent as ‘the favours bank’. Wolfe, if memory serves me well, portrayed high-powered NYC attorneys using their influence in pursuit of personal objectives. This type of behaviour, it could be argued, is merely a synonym of doing business. Who hasn’t had to resort to asking favours or influence from others as we endeavour to promote our own enterprises?


Undercutting the state. On a local level in Italy this type of influence is often thought of as ‘community’. Most southern villages still have patriarchal figures who will bail out needy individuals or families when, for example, someone loses their job or runs into financial hardships. This age old tradition continues mainly because locals have more faith in fellow-community members than in state welfare itself and its notoriously miserly benefits system. Its longevity is also partly due to the fact that the mafia can undercut state prices and offers protection and contract enforcement at more ‘competitive’ rates.


Mob feuding. The next level, which could be labelled ‘inter-family or mob feuding’ (think Godfather films and horse’s heads), certainly exists but, in reality, is over-played and over-publicised. In fact, when one of the characters from the Coppola film states, ‘I don’t like blood, it’s bad for business’ he was summing up the modern mafia ethos quite succinctly. Occasionally mob fighting does spill out onto the sidewalks, as it did in Calabria some years ago, but as one observer put it, the mob only gets violent when they can’t make ‘legitimate easy money’ elsewhere. With the state, they almost always can.


How the mafia really works. The real mafia is not just ‘la famiglia’ in tiny southern villages. It is something totally different. It is a huge corporate enterprise said to contribute 10% to 20% of Italy’s GDP. The typical modern day mobster is a suited business exec virtually indistinguishable from his political cronies. The typical modern mafia scam, par excellence, is rigging public tenders. It’s the oldest trick in the book. The government, in the name of transparency, is forced to put all public work or projects (whose remuneration is over €10,000 - last time I checked) out to public tender. The whole thing is a farce. Most of the ‘competing’ companies are bogus fronts for the mafia.


The most corrupt police force in Europe. The state is completely complicit. The Guardia di Finanza, Italy’s version of the Fraud Squad is openly known to be the most corrupt police corp in Europe. Local business live in fear of them and every single legitimate business in the area where I live has had to pay them off. (Their standard fare is a hefty ‘present’ of firm’s goods. A local glove maker I know had to hand over several hundred gloves as a payment for some supposed fiscal discrepancy. The Guardia di Finanza families eat for budget price in restaurants and they drink their expressos free in local bars.)


The costs. The standard practice is that the money from these public tenders gets awarded to mafia run firms. The public work begins. Then the company folds. This normally occurs after fellow mob members have pocketed huge consultancy fees. The damage to the economy is massive as the entire country is crippled under the weight of literally thousands of taxes to fund this. The environmental consequences are worse still. The entire country is littered with unfinished buildings and projects. Milan’s recent World Exposition, and its myriads of mobster scams, destroyed acres of park land. The supporters claimed that it invigorated the local economy but (as we have shown elsewhere) it came at a cost of €3000 a head per Italian. Naples has nine unfinished hospital projects all paid for with public taxes.


The state capitalism mafia model. Now that we have some idea about how the mob works, it makes the original question far easier to answer: How could an anarcho-capitalist society stop the mafia? Simple. No state – no state mafia. The rise of a robust, entrenched mafia came about because the mob simply used the state as their business model. The backbone is the huge wealth collection and redistribution system. In the case of the state, it’s called ‘taxes’, in the case of the mafia, it’s called ‘il pizzo’ or what ETA used to refer to as the ‘revolutionary tax’ in the Basque country. The mafia takes its cue from state capitalism - the idea that the state should safeguard large-scale industries from failure by propping them up or funnelling cash through them. Think US bank bail-outs. Boeing couldn’t stand up to real free-market capitalist competition without going bankrupt. Neither could so many weapons manufacturers, big pharma companies, tech giants, aero-industry, etc. Neither can Alitalia, the Italian state run airline company that for decades has haemorrhaged billions of tax payer’s money while strengthening and enriching its higher management – basically another mafia. It’s a blatant scam that most gullible tax contributors support, but few of them understand its messy, multi-layered complexities or who is hidden behind. Put another way, honest yet ignorant working folk are directly responsible – they fund it after all.


So bad they even go to jail. The same applies to almost every other sector of the government-mob nexus. State capitalism feeds the mafia. In my local area we have monstrous mob run industries like defence, aerospace and security giants such as Leonardo-Finmeccanica. While ostensibly producing military helicopters and fighter planes for a country that hasn’t been at war for eighty years, the conglomerate has a history littered with case after case of corruption. It’s so bad that people have even been jailed… and that takes some doing in Italy.  


In an anarcho-capitalist society there would be no state and therefore no massive re-distribution of state funds to bad actors. When trade and business are voluntary, companies and individuals sell goods and services that are of far greater social utility. Finmeccanica’s cheapest chopper trades at €11 million. Who the hell are you going to sell that to in an ancap society? Are you going to hop on a plane to Italy aboard one of the state’s mafia funding fleet, or take the honest, cheaper free market option? Exactly. Hence the honest shift towards independent and volantaryist communities using essentially anarchist systems such as the internet, sharing apps, cryptocurrencies, blockchains and any number of other new models. Systems which allow freedom to choose how we spend the fruits of our labour. The dinosaurs have got their days numbered.