Declaring goods illegal creates protection demand and forces suppliers to out-militarize clients

Evidence

But there is another reason why violence is required, and it has to do neither with intermafioso competition nor with protection from law enforcement. It is conditional on state action, however, for that is what defines certain goods or transactions as illegal, with crucial consequences. First, this creates a new market for guarantees and protection. Illegality means that state protection becomes unavailable by definition. Therefore, like any rational economic agent, suppliers of protection have an incentive to enter that market. Second, by declaring a good illegal the state effectively declares that those who deal in it regardless will be pursued and punished. If “Peppe” aims to protect such daring souls, he has to prepare himself accordingly. Given both that in order to be credible he must be stronger than his hypothetical clients, and that illegal dealers—who are challenging the state prohibition in the first place—are less easily deterred than the average legal businessmen, he has a very strong incentive to show his ruthlessness and invest in his military skills. — Diego Gambetta, The Sicilian Mafia The Business of…, 109

Categorization

• XREF: Gambetta’s core causal chain — the state accidentally manufactures protection demand for illegal markets; this is the theoretical backbone the reader seeks for the Puzo narrative where Don Corleone steps in after legal channels fail.
• SEED: An essay angle: prohibitionist drug/gun policies as inadvertent mafia-crafting subsidies — the state’s illegality rulings functionally outsource enforcement capacity to criminal protectors.