Allocative disputes over modernization were settled by oligopoly, not markets
Evidence
The journey from the estates of the interior to the city markets was rife with dangers, which caused the demand for protection to escalate. Ill-defined or extralegal allocative questions arose and demanded resolution: Who gets to lease the land? Who gets to buy it at auction? Who has access to water? Who has the right of way? Who gets the right of pasturage? Who gets credit? Who gets the threshing contract? Who represents producers at the city market? Who runs the transportation? Questions such as these, bound to arise in a society en route to modernization, were not left to the logic of market forces; the parties involved adopted as a regulative device an economic structure similar to that adopted by the millers: the oligopoly. — Diego Gambetta, The Sicilian Mafia The Business of…, 241
Categorization
Category: Causal Relationships
- XREF: The oligopoly as regulatory device echoes Milgrom et al.’s private judges resolving allocation questions — and Gambetta’s cartel logic. Directly testable against the reader’s framework.