Historical Case Studies of Proto-Mafia Origins
The Russian Mafia and the Gulag System
The Russian Mafia has its roots in the Vory-v-zakone ("thieves with a code"), a criminal fraternity that emerged within the Soviet Gulag system between the 1920s and 1950s. The Vory followed a strict code: no cooperation with authorities, no paying of taxes, and a refusal to work.
Following the fall of communism, the sudden spread of property ownership (demand) met a massive supply of former soldiers and KGB officers looking for work. Empirical evidence shows a strong correlation between the density of the mafia and proximity to former Gulags; specifically, the presence of vory was a strong predictor of local mafia presence in the 1990s.
The Japanese Yakuza
Similar to the Russian experience, the Yakuza developed during the Meiji Period (1868–1911). This era saw a dramatic increase in private property rights that the state could not yet fully enforce. Consequently, groups of disenfranchised samurai and hoodlums stepped in to provide private enforcement in sectors like real estate and corporate monitoring.
The Sicilian Mafia and La Cosa Nostra
In Sicily, the Mafia expanded by providing coercive capabilities to a new class of landowners and politicians who used these services to seize land from peasants.
When Italian migrants moved to the United States, they brought these traditions with them. The Italian-American Mafia, or La Cosa Nostra (LCN), found fertile ground during the US Alcohol Prohibition era and the real estate booms in cities like New York and Chicago. To manage the resulting complexity and reduce inter-family violence, they established The Commission in 1931, a governing body to coordinate disputes among the various "families".
The Migration of Organised Crime
OCGs do not remain static; they migrate strategically to maximize profit and minimize risk. This movement is driven by two distinct sets of factors.
Pull and Push Factors
- Pull Factors: These are forces that draw a group to a new territory, such as lax law enforcement, high levels of impunity, poorly regulated economic sectors, or new opportunities for cross-border smuggling.
- Push Factors: These are forces that drive a group away from its current setting, such as increased legal enforcement in the home country or displacement by a more credible authority.
Strategic vs. Unintended Movement
Migration can be strategic, where groups move to seek new resources or markets. However, it can also be unintended. A notable example is the "cockroach effect," where aggressive repressive policies in one area cause criminal groups to scatter and relocate to more vulnerable regions.
An example of this occurred in Italy, where the "Confino law" (imposing resettlement of criminals in different provinces) inadvertently contributed to the national spread of criminal organisations.
The Economic Consequences of Expansion
The expansion of OCGs is not a victimless economic shift; it imposes significant costs on local economies.
- Macroeconomic Impact: OCG presence generally has a detrimental effect on GDP and employment.
- Human Capital and Productivity: Criminality reduces investment in human capital and creates inefficiencies that lower firm productivity and stifle innovation.
- Market Distortions: OCGs create high uncertainty in credit markets, which acts as a deterrent to Foreign Direct Investment (FDI). They also cause the misallocation of public resources, often through the exploitation of government procurement contracts.
Case Study Note: In the 1980s, the expansion of Italian OCGs into regions like Apulia and Basilicata was fueled by the influx of relief money following a major earthquake, which lacked a strong legislative framework for management, allowing the mafia to exploit procurement contracts.
The Role of Legislation: RICO
In the United States, the legal response to the expansion of LCN was the Racketeer Influenced and Corruption Organizations Act (RICO), enacted in 1970. RICO allowed prosecutors to target the entire structure of a criminal organization rather than just individual crimes. The landmark Mafia Commission Trial (1985-1986) used RICO to successfully indict the heads of the Five Families, dealing a massive blow to the organized hierarchy of La Cosa Nostra.
