Illegal and legal markets differ in degree, not kind

Evidence

Yet, the difference between legal and illegal is not one of kind but degree. Legal trade may founder because of distrust (as in the example of the radio-dispatched taxis), and illegal trade is not necessarily impeded by the absence of protection. Arlacchi and Lewis (1990), for instance, demonstrate that the heroin trade has flourished in Verona as a result of the same entrepreneurial spirit and straightforward commercial practices that have fostered the city’s impressive performance in legal sectors. — Diego Gambetta, The Sicilian Mafia The Business of…, 608

Categorization

• XREF: Complicates the clean Gambetta story: heroin can flourish legally in some locales, meaning state failure is a variable matter, not a given. Connects to Milgrom’s point that trust can sometimes substitute for institutions. — connects to: Marriage and prostitution differ only in price and contract length — Simone de Beauvoir, The Second Sex, 1646