Unresolved allocative disputes drove parties to adopt oligopoly as regulation

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

• XREF: The core causal claim of the book’s thesis — the oligopoly as the regulative device in place of both market logic and state law — is exactly the private-protection-market model the reader is mining for.
• DEEPTHINKING: The ennumeration of ‘who gets what’ questions is a dense, non-obvious mechanism: it specifies exactly which disputes private order substitutes for law, and presents oligopoly not as market failure but as the intended regulative structure.