Ackerlof-style lemons problems are centuries old and were once solved by mafia horse-market guarantors
Evidence
I am a dead man. I bought a dead horse who does not know his way around, wants to follow only the roads he likes, slips and falls on slopes, is frightened by firecrackers and bells, and yesterday he shied and ran into a flock of sheep that was barring the way. A camorrista [the Neapolitan version of a mafioso] who protects me and used to control the horse market would have saved me from this crime. He used to check up on the sales and would get his cut from both buyer and seller. Last year I needed to get rid of a blind horse and he helped me to sell it as a sound one, for he protected me. Now he is in jail, and without him I was forced to buy a bad horse. He was a great gentleman! — Diego Gambetta, The Sicilian Mafia The Business of…, 45
Categorization
Category: Causal Relationships
- XREF: The 1863 coachman’s account is the historical data point validating the vaccaro’s model a century earlier — direct evidence for the reader’s cross-temporal claim about private protection markets.
- CANDY: The coachman’s ‘He was a great gentleman!’ praising his protection racketeer is a vivid, quotable vignette of inverted morality.