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The Law and Economics of The Godfather:

This year is the 35th anniversary of the release of The Godfather, the famous 1972 movie based on the 1969 book by Mario Puzo. To celebrate, I recently reread The Godfather, and discovered that it has a lot of interesting material on on law and economics that wasn't always emphasized in the movie.

Everyone remembers Don Corleone's famous saying that he's going to make "an offer you can't refuse." But for some reason, people forget that the Don also said that "a lawyer with his brief case can steal more than a hundred men with guns" (Godfather, pbk. edition, 52). One of the recurring themes of the novel is that people turn to the Mafia for help because of the corrupt and self-serving nature of many political and legal institutions that systematically allowed elites to plunder the politically weak. Puzo recognized, as sociologist Diego Gambetta explained more systematically, that the Sicilian Mafia flourished because it provided better "protection" against crime and violations of property and contract rights than did the official authorities, who generally protected only the politically powerful elite. To a lesser extent, a similar dynamic enabled the America Mafia to emerge in Italian immigrant communities in the early 1900s, as Puzo vividly portrayed in his chapter on the rise of Don Corleone.

Puzo also shows how Prohibition and afterwards the War on Drugs, provided opportunities for organized crime to grow and flourish. It was Prohibition that enabled the Godfather to go from being an "ordinary . . . businessman" to a "great Don in the world of criminal enterprise" (pg. 213). And, of course, the great Mob war that forms the central plot of the book is a conflict over Don Corleone's unwillingness to help other crime families expand into the illegal drug business.

Puzo further explains, as economists would predict, that Prohibition, laws banning gambling, the War on Drugs, and other legislation that creates black markets stimulates criminal violence in another way. Since bootleggers and drug dealers cannot go to court to enforce their contracts and other business arrangements, they often have little choice but to resort to private violence to do so. And, of course, a black market organization that starts off by providing "protective" defensive violence also has strong incentives to engage in aggression as well. This is what Puzo's Mafia characters have in mind when they repeatedly say that their violent actions are just "business" and not "personal." Puzo also shows how Prohibition, anti-gambling laws, and the War on Drugs stimulated police corruption. Captain McCluskey, the corrupt NYPD officer whom Michael kills, collects enormous bribes from criminals because he is in effect the gatekeeper of several highly lucrative illegal markets (gambling, drugs, prostitution).

Finally - and perhaps most radically - Puzo repeatedly emphasizes the similarities rather than the differences between Mafia leaders and conventional politicians and public officials. Both force people to pay for "protection," both are portrayed as corrupt and self-serving, and both cover their crimes with a veneer of moralistic rhetoric.

I do not mean to say that Puzo was deliberately advocating a libertarian view of government in The Godfather. As far as I know, his politics were conventionally liberal, and The Godfather also includes a very negative view of private industry (which, like the government, is portrayed as being more similar to the Mafia than different from it). Nonetheless, the novel vividly highlights some of the shortcomings of modern government, particularly the ways in which its failure to provide protection and its efforts to stamp out alcohol and drug use stimulate the rise of organized crime.

Most readers would perhaps deny that this is the central theme of The Godfather, pointing instead to the story of the moral corruption of Michael Corleone, who gradually becomes enmeshed in his family's criminal enterprises. Michael's fall from grace is indeed the main focus of the book. But it is worth noting that that fall was itself the result of an attack on the Corleone family by rival Mafia cliques seeking to control the emerging market in illegal drugs. The dispute between the Corleones and their rivals cannot be settled peacefully in large part because the market in question is an illegal one.

The Godfather was not intended to be a libertarian critique of the state. Indeed, Puzo apparently wrote the book in large part because his earlier, more literary novels failed to make money, and he wanted to write a relatively dumbed down book that could become a bestseller. Sometimes, however, a book goes beyond the author's intentions, and so it was with The Godfather.

UPDATE: Over at Crooked Timber, Henry Farrell claims that the emergence of the Mafia in Sicily cannot be blamed on the failures of the Italian state because "the Italian Mafia preceded the expansion of the Italian state [after unification in 1860-61], and . . . its success can't be attributed to the Italian state's innate weaknesses (or over-repressive nature)." This argument confuses the absence of a unified Italy with the absence of a state. Before Italian unification, Sicily was part of the Kingdom of Two Sicilies, which also included Naples, and earlier still was a fully autonomous monarchy. The Sicilian government of that era was famously ineffective and corrupt, and also biased in favor of the elite, thus providing little protection for ordinary people (and even for some elites) and helping to stimulate the rise of the Mafia as an alternative source of "protection."

Farrell also criticizes my interpretation of Diego Gambetta's work. However, in this article, Gambetta specifically identifies the shortcomings of the state in Sicily as a major contributor to the rise of the Mafia (though he also notes other contributing factors):

Virtually everything Franchetti [a 19th century Italian scholar] wrote is supported by the evidence which has since emerged, and what we know about the way the mafia has evolved is largely consistent with his analysis.

Franchetti essentially identifies two related sets of causes for the emergence of the mafia. The first is eminently political and has to do with the absence of credible or effective systems of justice and law enforcement. From at least the time of the sixteenth century . . . , Sicilians were able to trust neither the fairness nor the protection of the law. This pre-existing state of affairs caused considerable difficulties to the newly formed [unified] Italian state, which, in spite of its weakness and its mistakes, might otherwise have claimed the right to a far higher degree of legitimation than any of the previous regimes [in Sicily]....

Related Posts (on one page):

  1. More on the Law and Economics of the Godfather:
  2. The Law and Economics of The Godfather:
Eli Rabett (www):
Not libertarianism, but think fascism in the Franco/Mussolini/Peron sense
5.9.2007 12:29am
M (mail):
There's something here, of course, but not in a way that reflects well on libertarianims, I'd think. That is, the libertarian vision of the world really is like the mafia world, while most of the time the real world isn't like that, or doesn't need to be.
5.9.2007 12:30am
American Psikhushka (mail) (www):
M-

That is, the libertarian vision of the world really is like the mafia world, while most of the time the real world isn't like that, or doesn't need to be.

Seeing as how libertarians are against violence except in the case of legitimate self-defense I don't see that. Can you explain what you mean?
5.9.2007 12:46am
Ilya Somin:
Not libertarianism, but think fascism in the Franco/Mussolini/Peron sense

I don't see how The Godfather endorses fascism, or even comments on it in any major way.
5.9.2007 12:58am
Zach (mail):
I love the Godfather and have spent many a hour with my nose burried in the book. I think the one element you didnt cover was the interaction of family and personal loyalty, and familial relationships. The Don held officaldom in contempt because of how it meted out justice and assistance. The book states "that it didnt even matter if you could not repay him. All that was necessary was that you yourself personally proclaim you friendship and loyalty" I think that is close enough. There is no other more important thing for you to do to get the help of the Don than to be his friend and to be loyal to him. When you willingly made yourself part of his family, and when you made it about you as the dons friend he would make your problems his, and then they would fear you. There is in a sense a more small scale economics of personall over the contractual. This I think would assist your point about Mario Puzo being more libertarian in his views.
5.9.2007 1:04am
Malvolio:
Two illustrations of just how libertarian Puzo wasn't.

First, the epigraph for the book is a quotation from Honoré de Balzac: "Behind every great fortune there is a crime."

Second, there is a point when the rising Vito Corleone changes his emphasis from running his olive-oil business -- which entails assaulting the drivers working for competitors, destroying their trucks, and firebombing their customers -- to running gambling, bootlegging, and prostitution operations. Puzo describes that as a transition from "unethical businessman to criminal". I would think anything libertarian would say the transition was in the opposite direction.
5.9.2007 1:12am
Kim Scarborough (mail) (www):

But for some reason, people forget that the Don also said that "a lawyer with his brief case can steal more than a hundred men with guns".

Because that line never made the movie. It was in Coppola's script, but Brando thought it was preachy and convinced him to cut it (much to Puzo's annoyance, who thought it was the best line in the book).
5.9.2007 1:54am
Randy R. (mail):
jane Jacob's does an excellent analysis of NGO's such as the Mafia in her book, Systems of Survival. She calls them hybrids, because they are private organizations that take on the role of the gov't.

In other words, the mafia is a group of private citizens who create and enforce their own set of laws. As a result, they are answerable to no one, and their power goes unchecked. Unchecked power inevitably leads to corruption and self dealing to the detriment of any one not a part of the organization.

Another example of a hybrid is communism, in which a gov't takes on the role of private enterprise, in that it tried to regulate production and manipulate the economy. It too is answerable to no one, and inevitably slides into corruption.
5.9.2007 2:08am
talboito (mail) (www):

Seeing as how libertarians are against violence except in the case of legitimate self-defense I don't see that. Can you explain what you mean?


Violent cartels like the Mafia, are the endstate of libertarian ideals. It may not be libertarians themselves committing violent acts, but their philosophy invites such an environment.

This is much the same way communists claim to be against class divisions when their philosophy invites horrible societal inequalities and abuses of power.
5.9.2007 2:11am
noattention:
Check out Nagareta, Closure in Damage Class Settlements: The Godfather Guide to Opt-Out Rights, 2003 University of Chicago Legal Forum 141.
5.9.2007 2:46am
Dan Simon (mail) (www):
Puzo recognized, as sociologist Diego Gambetta explained more systematically, that the Sicilian Mafia flourished because it provided better "protection" against crime and violations of property and contract rights than did the official authorities, who generally protected only the politically powerful elite.

And here I was thinking that the Sicilian Mafia flourished because the rural Southern Italians it terrorized into submission lacked strong enough political institutions to defend them from it. Then again, American linguist Noam Chomsky explains (so I hear) that the Viet Cong flourished because it provided the South Vietnamese with better "protection" than the corrupt South Vietnamese government did. And American politician David Duke will happily reassure you that the KKK flourished because it provided Southern Blacks with better "protection" than the corrupt Yankee-controlled government did.

Do you agree with their analyses? Or are you perhaps willing to concede that how much wealth and power a criminal organization attains doesn't necessarily depend on the level of "protective" services it supplies to its victims?

To a lesser extent, a similar dynamic enabled the America Mafia to rise in Italian immigrant communities in the early 1900s, as Puzo vividly portrayed in his chapter on the rise of Don Corleone.

Of course--if a pulp novel about the Mafia portrays it as improving on, rather than exploiting, an insufficiently effective justice system, then that must be what happened...

And, of course, a black market organization that starts off by providing "protective" defensive violence also has strong incentives to engage in aggression as well.

Why do you restrict your point to "black market" organizations? Don't police forces that start off by providing "protective" defensive violence have similar incentives to become aggressive? And why don't those incentives goad them into full-scale warfare with rivals as often as they do "black market organizations"? Could it be because criminal enterprises, unlike police forces, are typically aggressive, rather than protective, from the very beginning, and therefore not the least bit inhibited about turning their aggressive violence on rivals as well as victims?
5.9.2007 2:49am
American Psikhushka (mail) (www):
talboito-

Violent cartels like the Mafia, are the endstate of libertarian ideals. It may not be libertarians themselves committing violent acts, but their philosophy invites such an environment.

How so? Libertarians are against fraud and force other than legitimate self-defense. They are for a codified system of laws enforced by either government or privately managed police. How does that result in an endstate of organized crime?

This is much the same way communists claim to be against class divisions when their philosophy invites horrible societal inequalities and abuses of power.

That is because communists are usually collectivists, under collectivism individual rights are weakened. Then communists don't believe in individual property rights either. So the individual is essentially a slave and he and his property are essentially owned by the state. The managers and planners set themselves up as an elitist class, so essentially the individual and his property are owned by the planners.
5.9.2007 3:25am
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5.9.2007 3:59am
loki13 (mail):

Sometimes, however, a book goes beyond the author's intentions


Thank goodness the Constitution isn't a book and can never go beyond the framers intentions....

/grin
//snark
5.9.2007 9:20am
anonVCfan:
As long as you have readers willing to read their own lessons into it, every book goes beyond its author's intentions. It's like a lot of other things. Different people look at the same things and draw different lessons.

If the Mafia's success is due to the government's failure to protect people, why does that weigh in favor of limited government? Wouldn't a stronger, more competent government eliminate the need for the Mafia? Is an organization whose guiding principles are violence and nepotism really more desirable than the government?

Just from the exceprts discussed, it sounds like Mario Puzo highlights the shortcomings of government, private industry, and organized crime, and anyone who has a particular aversion to any of those three things can claim the Godfather as his own fable. If I were a fascist, I could post on my fascist blog that the Godfather highlights the shortcomings of weak governments---they allow organized crime and business to fill the void with their own corrupt institutions. I could also point out Puzo's unfavorable view of private industry.

If I were a CLS person (ugh... I'm definitely not), I'd point out how the Godfather demonstrates that corruption and oppression come from everywhere, and that libertarians, capitalists, fascists, anarchists, etc. are just arranging deck chairs on the Titanic in a debate over who gets to do the oppressing, which will occur equally under any system.

If you think your worldview is painfully obvious, then any set of facts (or any literary narrative) will strike you as further support for it.
5.9.2007 9:40am
A.C.:
Don't forget feudalism. The mafia came up as the old landholding systems were breaking down - absentee landlords, new ownership not checked by historical obligations, and so on. The breakdown of any old order creates space for entrepreneurs, both the good kind and the bad. Cf. the drug trade practically anywhere.

My question is always why some places get Silicon Valley and others get drug cartels. I don't have a good answer.
5.9.2007 9:56am
Cory Olson (mail):
Throughout this entire post, I just kept hearing:


"You know how naive you sound Michael. Senators and politicians don't have people killed."

"Now who sounds naive Kaye?"


For all you Godfather purists, please pardon any errors. It's been awhile since I've seen it.
5.9.2007 10:15am
Anon1ms (mail):
Taking a romanticized tale of what, in reality, are a bunch of violent thugs as a way to expound on libertarianism is akin to explaning theoology based on an image of the Virgin Mary found on a piece of French toast.

Dumbed down, indeed.
5.9.2007 10:28am
CJColucci:
"Italian government" is and always has been an oxymoron, as anyone with a vowel at the end of his or her name has always known.
5.9.2007 11:53am
Tim Howland (mail) (www):
I'm reminded of the Terry Pratchett quote:


"Crime was always with us, he reasoned, and therefore, if you were going to have crime, it at least should be organized crime."
5.9.2007 12:26pm
Andy Freeman (mail):
(1) The assumption above that a bigger govt necessarily provides more protection is clearly false.

(2) Organized crime rarely concerns itself with thought-crime. Like govt, it skims and steals, but is less likely to destroy for no defensible reason.
5.9.2007 12:36pm
gcruse (mail) (www):
Both Godfather and Godfather II are slated to run on Spike TV this coming Sunday.
5.9.2007 12:48pm
American Psikhushka (mail) (www):
anonVCfan-

If I were a CLS person...

What does "CLS" stand for?

My response earlier in the thread was because I thought some posters were equating libertarianism with anarchy and then anarchy with lawlessness. Libertarians believe in a set of codified laws (most anarchists do too), they just disagree to varying degrees to what extent that policing should be done by government or private entities.
5.9.2007 3:10pm
mariner (mail):
If the Mafia's success is due to the government's failure to protect people, why does that weigh in favor of limited government? Wouldn't a stronger, more competent government eliminate the need for the Mafia?


anonVCfan missed the point. The government failed to protect poor people because it was corrupt, not because it wasn't strong enough. A stronger government under those circumstances would be even worse.
5.9.2007 3:31pm
frank petrilli (mail):
Critical Legal Studies: an approach to law that draws on critical theory (read: Frankfurt School, structuralism, post-structuralism, etc.). Basic idea is that legal discourse cannot be meaningfully separated from political discourse insofar as both function as discursive fields through which power (both restrictive and productive) operate to shape the way we talk about ourselves and the world. Slogan is: all law is politics. Nowadays used predominantly as a strategy in feminist legal theory and critical race theory. Another way to look at it is that legal discourse cannot be meaningfully separated from legislative/deliberative discourse. Typically only useful for those of us in law who would really rather be in a post-grad philosophy program, but find ourselves here for various (often valid) reasons.
5.9.2007 3:32pm
Dr. Ellen (mail) (www):
For an earlier book, try The Syndic, by C. M. Kornbluth. First published 1953. Followed by Gladiator at Law in 1954.
5.9.2007 3:50pm
Ilya Somin:
Why do you restrict your point to "black market" organizations? Don't police forces that start off by providing "protective" defensive violence have similar incentives to become aggressive? And why don't those incentives goad them into full-scale warfare with rivals as often as they do "black market organizations"? Could it be because criminal enterprises, unlike police forces, are typically aggressive, rather than protective, from the very beginning, and therefore not the least bit inhibited about turning their aggressive violence on rivals as well as victims?

In many countries, government police and military forces do indeed engage in aggression against their own citizens - and on a much larger scale than the Mafia and other criminals. In places where they do not, that is largely due to the fact that soldiers and police are subject to substantial sanctions and punishment if they abuse civilians. The fact that someone works for the government police rather than for the Mafia does not in and of itself make him less likely to engage in aggression. Whether he does so or not is in large part dependent on the incentives he faces.
5.9.2007 4:34pm
J. F. Thomas (mail):
Whether he does so or not is in large part dependent on the incentives he faces.

It is much more than simply a question of incentives. It is a question of morality and philosophy. Something I daresay a Russian libertarian just doesn't comprehend.

Why do you think the vast majority of the professional American uniformed military is so adamant in clinging to their "quaint" traditions of the Geneva conventions and, in a direct slap in the face to the civilian leadership at the pentagon, introduced a new Army field manual on interrogation which almost left unchanged the existing manual, while the oh-so-brilliant civilian leadership in the Pentagon and at the White House were insisting that enhanced interrogation techniques (euphemisms for torture) were necessary to win the war on terror? It is because that they know that soldiers need a moral compass and if the military allows its soldiers to brutalize others they will become monsters themselves who lose sight of the fact that they serve a greater purpose.
5.9.2007 6:21pm
anonVCfan:
anonVCfan missed the point. The government failed to protect poor people because it was corrupt, not because it wasn't strong enough. A stronger government under those circumstances would be even worse

Right, but the businesses and the Mafia were corrupt too, no?
5.9.2007 7:05pm
Dan Simon (mail) (www):
The fact that someone works for the government police rather than for the Mafia does not in and of itself make him less likely to engage in aggression. Whether he does so or not is in large part dependent on the incentives he faces.

Indeed--and the incentives for a business to refrain from criminal activity, even in defense of a criminalized revenue stream, are at least as strong as the incentives for any police force on earth to refrain from criminal activity, even in defense of a criminalized revenue stream. That's why it's so absurd to argue that "[p]rohibition, laws banning gambling, the War on Drugs, and other legislation that creates black markets stimulates criminal violence" by forcing otherwise honest, customer-focused businesses such as the Mafia(!) to resort to "'protective' defensive violence", thereby giving them "strong incentives to engage in aggression as well".

For example, in a world where the authorities are even less effective at "protecting" businesses than the local Mafia don, criminalization shouldn't matter at all, compared to the good graces of the local Mafiosi--who obviously don't want businesses challenging their reign of terror. And in a world where the authorities are more effective than the Mafia, why would a business react to criminalization by defying the law, any more than it would react to the Mafia's demands of "protection money" by defying the Mafia? In either case, a business that's not already a violent, aggressive criminal enterprise has every reason simply to acquiesce to the demands of those who can plausibly threaten violence against it, rather than try to challenge the violence/control "experts" at their own specialty. (That's precisely why "protection rackets" succeed in the first place.)

And in fact, as a matter of history, criminal enterprises have almost always started out as simple-to-run thuggery operations such as "protection rackets" or bandit gangs, before expanding into more complex quasi-commercial pursuits, rather than vice versa. That's because honest commerce is actually fundamentally different from organized crime, Mario Puzo notwithstanding.

Funny how a pro-business libertarian who complains that "The Godfather" portrays private industry "as being more similar to the Mafia than different from it", has ended up blurring that distinction himself....
5.9.2007 9:10pm
American Psikhushka (mail) (www):
frank petrilli-

Thanks, hadn't seen that one before.
5.9.2007 10:02pm
Louis Proyect (mail):
An extraordinarily uninformed post. The Sicilian Mafia was a pillar of the Christian Democratic government that ruled Italy for the better part of 50 years. It is symbolized by Michele Sindona, the rogue financier who served the Vatican and the Mafia. The Mafia offered *no* protection against crime. It assassinated two Sicilian DA's in the 1980s who were trying to rid the island of crime. Of course, I am not totally surprised that a rightwing blog like this would be a bit misty-eyed over the Mafia, given the crew that is running the government today.
5.9.2007 11:55pm
abb1 (mail):
"The Mafia offered *no* protection against crime. It assassinated two Sicilian DA's in the 1980s who were trying to rid the island of crime."

It depends on your definition of 'crime'. In a patriarchical self-governed local community it's the Sheik, the Chief, the Don who decides what's a crime and what isn't, not the DA.

I don't know much about Sicilian Mafia, but I assume sometimes in some areas it's corrupt and violent, while in others times/places it may be relatively honest and peaceful; probably more often honest and peaceful than not or it wouldn't have survived for as long as it has. It's just that what we hear in the news is always corruption and violent incidents.
5.10.2007 7:28am