Economic slumps create the triggering conditions that attract racketeers

Evidence

But even when all the right conditions obtain, a triggering event is often necessary to attract racketeers. Slumps in the economy, for instance, can provide the motivating force: in the United States during the Great Depression an “extraordinarily deep and rapid decline in demand intensified the incentive for collusive services” (Reuter 1987: 3). The need for cash thus becomes an important factor. During the depression, according to Lucky Luciano: “We gave the companies that worked with us the money to help them buyin’ goods and all the stuff they needed to operate with. Then, if one of our manufacturers got into us for dough that he could not pay back, and the guy had what looked like a good business, then we would become his partner… We actually kept a whole bunch of garment manufacturers alive” (Gosch and Hammer 1975: 77-78). — Diego Gambetta, The Sicilian Mafia The Business of…, 517

Categorization

• XREF: Directly parallels Gambetta’s core causal model of the Mafia as private protection — clean evidence that demand for protection services spikes exactly when state/formal channels fail, just as with the opening Bonasera scene. — connects to: Falling profits trigger a self-reinforcing bankruptcy cascade — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 824
• SEED: The debts-into-equity structure Luciano describes (lending as entry into partnership when repayment fails) is a striking mechanic of coercive finance worth an angle comparing Mafia lending to predatory venture capital.