Market power lets an extralegal system coerce new entrants into adopting its rules.
Evidence
These organizations make it clear to new entrants, who are primarily manufacturers of small stones, that their ability to secure a steady flow of rough diamonds for their cutting centers is intimately linked to their willingness to play by the established rules-to organize bourses, set up arbitration systems, and submit claims filed against them to the Arbitration Board of the World Federation. — Lisa Bernestein, Opting out of the Legal System, 204
Categorization
- XREF: The Central Selling Organization’s coercive inducement mirrors how the Sicilian mafia uses control of resources (protection, work, land) to force compliance — a structure Bellodi cannot break into because it reaches through legitimate market channels. — connects to: New financial markets require coercive persuasion of members to create initial liquidity — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 691