The Mafia As A Corporation Essay, Research Paper

Stephen Van Tighem

History 104 12:00-12:50

Kurt Dunbar

Due: 11/19/2001

Term Paper

Violence, blackmail and corruption as business terms, one would doubtfully consider them commonplace, but in the Mafia, nothing is. Looking at the history surrounding the Mafia, and the motivations apparent for its unconventional practices will lead one to realize that it is much more a union aimed at entrepreneurial success than the more common notion that it is simply a malicious group of amoral villains, anxious to wreak havoc. For decades the Italian-American Mafia has employed violent to achieve success in a capitalistic sense. ?The Mafia has changed a great deal since the days of the peasant uprisings in sun-baked Sicily. It has found a place within its ranks for business-school graduates, and it has adopted modern banking methods and invested in legitimate corporate ventures.? The Mafia, also known as La Cosa Nostra, is generally composed of Italians or Italian-Americans that work together as entrepreneurial criminals. La Cosa Nostra literally means ?The thing ours? but is loosely translated as ?our thing.? The Mafia traces its roots back to Sicily, Italy in the 9th century AD when its purpose was to guard the feudal estates of wealthy landlords. When members of the Sicilian Mafia immigrated to the United States they initially excelled in extortion, but soon adopted gambling and prostitution as business ventures. In order to understand the role the Mafia has played in the United States, it is first necessary to study the formation and role of the Mafia in Italy.

The Sicilian Mafia is said to have formed around the ninth century when Arabic tribes invaded Sicily. Native Italians were forced into hiding, taking to the hills and mountains in order to stay safe. The Sicilian Mafia formed to protect Italians from the invaders, and eventually rid the region of its unwelcome foreign foes. At this point, Mafiosi (individual members of the Mafia) essentially became middlemen for business transactions in their particular city or town. In his book The Sicilian Mafia, Diego Gambetta describes the process ?When the butcher comes to me to buy an animal, he knows that I want to cheat him. But I know that he wants to cheat me. Thus we need, say, Peppe [that is, a third party] to make us agree. And we both pay Peppe a percentage of the deal.? This method has many implications. ?Peppe? is trusted by both the consumer and producer and his position as a Mafiosi entitles him to demand fairness and respect. In business terms, a Mafiosi is an entrepreneur, and the service he provides is protection. He protects both players in the transaction he oversees. Gambetta touches upon this by saying: ?An entrepreneur who trades in secondhand horses or smuggled cigarettes may purchase the protection of a Mafiosi. Alternatively, the Mafiosi may deal in drugs or used cars, but this is not what makes him a Mafioso. What does make him a Mafioso is the fact that he is capable of protecting himself as well as others against cheats and competitors.? Opportunities were limited in Sicily for the Mafia; they needed to find ways to expand their business without losing the company of Italians, who understood best the functional benefits of the Mafia?s presence. With immigration rising, America provided the ideal environment for members of the Mafia to expand their arguably illegitimate business ventures.

The advent of the 20th century witnessed a significant influx of Italian immigrants into America, a movement largely caused by a common dream among these people ? one of discovering wealth and prosperity in the United States. Members of the Sicilian Mafia had the same dream. A member of the Mafia in Sicily can only achieve so much. Sicily is an Island located off the Southwest of Italy, and it was very difficult for Mafioso to extend their sphere of business into the mainland of Italy. They saw the Unites States as an open door with endless possibilities. In America, still under the guise of providing ?protection,? Sicilian Mafiosi extorted and blackmailed their fellow Italians, but it was not organized in any sense of the word. ?These activities [extortion] were not organized, and were not the deeds of ?idle men who spend their ill-gotten gold in riotous living,? but rather those of ?thrifty, industrious people who work hard but grumble at fate because some of their countrymen are more wealthy than they.? Usually the extortionists were common laborers who needed money for one reason or another,? describes Humbert S. Nelli in his book The Business of Crime: Italians and Crime in the United States. The earliest organized forms of Mafioso in the United States were a group called the Black Hand. This group employed similar tactics as the Sicilian Mafia. The following story presented in Thomas Monroe Pitkin and Francesco Cordasco?s The Black Hand illustrates this group?s sphere of influence in America. For example, in 1903, an Italian contractor from Brooklyn named Nicolo Cappielo received a letter telling him to be at a designated street corner the next afternoon or ?your house will be dynamited and you and your family killed.? The letter was signed ?Mano Nera,? ?Black Hand.? After refusing to show up, friends urged him to pay the price on his head. He paid $1000 of the ten thousand requested. Cappielo soon became frustrated and scared by the letters and threats, and took his dispute to the police. While in court, testimony revealed that Cappielo had asked the defendants (members of the black Hand) to punish his son-in-law for marrying his daughter against his wishes. Business in the Mafia is based on mutual respect. Cappielo came to the Black Hand to request a service, albeit a criminal one, and when he refused to return the favor, his life was threatened. This depicts how the American Mafia used extortion as their primary business venture. Soon their influence extended into various other realms.

As second generation Italians came of age, the glamour of material possessions and success glorified by American culture became a draw for all people, including criminals. Former Black Handers began to diverge from the path of extortion. Instead of simply victimizing Italians, they spread their influence towards all of the American public. The name Mafia became more prevalent as Italian-American criminal business ventures spread into prostitution, gambling, labor racketeering and the newly established narcotics market. The largest ground was gained for Italian organized crime with the introduction of the 18th Amendment to the Constitution, Prohibition of alcohol. Many of the men that excelled in the distribution of illegal alcohol, mainly a younger generation of Italians were quick witted, each possessing a keen street sense gained from growing up in America. Men like Charles ?Lucky? Luciano, Al Capone and Hyman Abrams took up a life of crime at a very young age. ?Lucky? Luciano left school at the age of fourteen and ?took a job as a shipping boy in a hat factory, but one week of work and a $7 paycheck convinced him that he wanted something more from life ? [he wanted] money to spend, beautiful women to enjoy, silk underclothes and places to go in style.? Young Italians began to join street gangs and wanted nothing to do with the common working class. ?It appears that all the Prohibition-era racketeers, whether born in the United States or brought here as infants or children, started their careers in one or another gang.? By involving themselves in illegal gambling and labor racketeering, many prominent gangsters made key connections with powerful politicians, police and legal professionals that would prove very helpful during Prohibition. In order for entrepreneurial gangsters to get alcohol to the public they often struck deals with pre-Prohibition alcohol warehouse owners. Mafioso lived lavishly, and the public admired them. ?Much of the public generally accepted and condoned law-breaking when it involved the manufacture and distribution of liquor and beer,? states Nelli. He continues, ?A thrill-seeking public enjoyed vicariously the sensational, luxurious, and dangerous lives of the ?booze Barons? as a respite from ordinary lives as dishwashers, bookkeepers, dentists, teachers.? Business-wise, Prohibition brought great wealth to members of the Mafia; it also brought them fame in the eyes of the public. The public often ignored the violence that occurred between rival gangs, but when the violence involved members of the common public, an extremely rare occurrence, action was demanded against the gangsters. It was with these anomalous occasions that the seeds of misinformation were sown, unfortunately sticking as the American public’s perception of “The Mob” despite a more honorable actuality. With the eradication of Prohibition, Mafia groups began to run casinos in Las Vegas, houses of prostitution, and were very involved in labor racketeering. Their criminal activities became more of a business than ever before.

As Mafia groups grew and matured, leaders such as Capone, Luciano and John Torrio became very interested in maximizing profit and reducing risks. As their interests began to take on the appearance of legitimate business, they had more of an interest in specifically with whom they did ?business? and with whom they ?employed?. Mafia leaders were adamant about keeping their dealings ?in the family.? With all the wealth gained during prohibition, many Mafioso wished to give their children educations so that they could enter into legitimate businesses such as law or medicine, leaving their illegal affairs to be handled by other biological family members (nephews, sons-in-law, cousins) should their own children go on to succeed in the legitimate world of business. It is due to this that Mafia groups are often referred to as ?families.? Gambling, the largest source of income for ?families? after Prohibition, ?brought in an estimated $20 million a year, with annual net profits of approximately $7 million.? Towards the latter half of the 20th century, Mafia families made increasingly larger strides to enter the legitimate business world.

The American Mafia as a business enterprise has done exceptionally well for itself in the United States. Prohibition provided the perfect scenario for the Mafia to make money, all the while playing the role of the ?good guy? in the eyes of the public. Though public opinion has certainly turned against the Mafia since the 1920’s, unfortunately this has occurred through misinformation on a grand scale. The common American perception of the Mafia is as substantiated as a fairy-tale, the truth being something altogether different. They originally came to America as extortionists, but very quickly knew they would have to extend their expertise into other fields. With this expansion came the fame and fortune that has made the American Mafia famous in the United States. In time, the Mafia honed their skills, and aligned them with common legitimate businesses practices, which has separated them from common criminals, and allowed themselves to excel.

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1.) Firoentin, Gianluca and Peltzman, Sam. 1995. The Economics of Organised Crime. The Press Syndicate of the University of Cambridge

2.) Gage, Nicholas. 1971. The Mafia is not an Equal Opportunity Employer. Nicholas Gage

3.) Gambetta, Diego. 1993. The Sicilian Mafia. The president and Fellows of Harvard College.

4.) Mangione, Jerre and Morreale, Ben. 1992. ?Who?s afraid of La Mano Nera, ?The Black Hand??? New York, Harper Collins. http://organizedcrime.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.mindspring.com%2F%7Ehistoric-ny%2Fblackhand.htm

5.) Nelli, Humbert S. 1976. The Business of Crime: Italians and Syndicate Crime in the United States. Oxford University Press, Inc.

6.) Pitkin, Thomas M. and Cordasco, Francesco. 1977. The Black Hand: A Chapter in Ethnic Crime. Littlefield, Adams & Co.

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