How the Mob Gets Rich Off of Recessions

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The Mafia has always profited from economic crisis. Recessions fill up the mob's coffers and boost its social standing. In fact crime is one of the few sectors of the economy that thrive in moments of financial decline. Just look at the past decade, when the United States suffered a collapse in its housing market, Italy risked default, and Greece, Spain, and Portugal came to the brink of bankruptcy. During all that time, drug trafficking reached unprecedented heights of prosperity.

 It's always been this way. In the Great Depression, the Italian-American mob, which was already reaping the benefits of Prohibition, saw its business grow even more. The consumption of alcohol and drugs increased as uncertainty about the future caused people to seek refuge in them, the penniless and destitute turned more often to loan sharks, and general hopelessness about the future spurred the rise of Mafia-organized gambling, sports betting, and illegal lotteries.

And it doesn't end there. The Mafia exploits these moments of uncertainty to validate its organizations and to build consensus in society. After the stock market crashed in 1929, Al Capone decided to mobilize his restaurant and garment businesses to feed and clothe Chicago's poor. (In the 1980s, Pablo Escobar would reprise this demagoguery when he offered to pay Colombia's public debt out of his own pocket.)

 

While politicians and the press worried about how to end the Depression, the Italian-American bosses gloated in the situation, using it as an opportunity to reorganize and relaunch their illicit enterprises. It was during that period, for example, that the Chicago Outfit was consolidated. It was at the end of the 20s that Lucky Luciano came to understand the importance of the heroin trade. And it was in 1931 that gambling was legalized in Nevada and the bosses conquered Las Vegas.

Only in the early 1930s, when America had caught a glimpse of the way out of the crisis, did US institutions begin to truly concentrate on the fight against the Mafia. At that point the first arrests were made: Luciano and Al Capone ended up in jail, but they had established themselves so well during the recession that they successfully managed all of their ventures from prison. And the bosses of the Italian-American Mafia had such power that American intelligence asked their help with security during World War II in exchange for lessened sentences and impunity.

 Though history teaches us that in times of crisis it's necessary to raise our guard against gangsters and racketeers, institutions tend to lower their defenses, handing a carte blanche to organized crime. So it continues today.

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