Artificial Scarcity, Power, and the Italian Mafia

This paper contributes to an institutional theory of crime. More specifically, it focuses on the problem of the Mafia and the infiltration of legitimate businesses. In legal markets, the Mafia resorts to artificial scarcity as a functioning principle. Although scarcity and its consequences for market economies are key aspects of mainstream economics, they have been insufficiently analyzed because the emphasis is only on 'natural' scarcity. The Mafia phenomenon reveals that scarcity can also be institutionally created. This type of scarcity encourages the process of market collectivization and empowers those generating it. The Mafia's legal activities establish a system of waiting-lines and monitored access to goods. Instead of being merely coercive and openly violent, the Mafia builds a new lasting order, producing its own rules and even breeding social legitimacy