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E - 141 : The Sad Usefulness of the Mafia

Updated: Apr 16, 2021

The Horrible Murder of Giovanni Falcone, Italy's State Prosecutor in Sicily, in 1992

This summer we sail along shores supposedly ruled by the Mafia. A few people asked me whether we are not afraid of getting kidnapped and ransomed. The interesting part of their question was that it was actually asked. In Europe, governments and officials pretend that the Mafia is dead and a thing of the past. In many people’s mind, obviously not. I started wondering, why not? After so many trials, thousands of convictions, lengthy prison sentences and the full power of the state deployed against it, why is the Mafia still around? According to FBI reports, the Italian Mafia has revenues of around EUR 50 bn which is a whopping 3% of Italy’s GDP. The Mafia makes its money from drug and human trafficking, money laundering and prostitution. Why are they still in "business"?

One of the many thousands of arrests

The roots of the Mafia or the ‘Ndrangheta ,as it is called in Calabria, go back to the 18th century. This was the time when once flourishing Southern Italy had descended into abysmal poverty. With no chance to exporting anything, the economy was a zero sum game. Subsistence framing had taken over, division of labor seized to exist. Under their feudal rights going back to Norman times, the nobility and the church extracted as much tax as possible from the farmers. Law enforcement was handed over to thugs. The locals in their mountain villages, far away from the fertile coastal plains where Muslim pirates made life too dangerous, lived in constant terror.

Not surprisingly, some young men thought enough was enough and began to fight back. They organized themselves in secret societies with a strict code of conduct. The word ‘Ndrangheta actually means “heroism” and “virtue” in the Greek spoken in Calabria’s Mountains. Since the ruling class tortured liberally, all members of these secret societies were sworn to “omerta”, permanent silence on their activities. Peasant rebellions are not unique to Southern Italy. There have been similar movements in Europe like the German Peasant War or Robin Hood’s fight against the Sheriff of Nottingham. They all had the same purpose: deny the ruling elite the right of taxation. If paying tax could not be avoided, rob it back and distribute it amongst the poor.

Typical Organisational Chart for the Ndrangheta, the Calabrian Mafia

The Mafia was organised in families, had a boss and governed with its hierarchy the shadow economy which these rebellions created. One of its important tasks was to rule on disputes. Where do you go to settle a disagreement when the disputed subject is part of the shadow economy? Definitely not in an official court. You would call on the local Mafia boss for a ruling.

Other activities included the raiding of the noble’s fields and orchards, intimidating and killing the thugs who were running the police, smuggling salt and tabaco and raising the Mafia’s own taxes called “Protection Money”. Of course, the nobles fought back. When Police or private armies failed to suppress the Mafia, the nobles often hired competing Mafia clans to fight back. Southern Italy descended into an undeclared civil war with murder rates sky high and blood vendetta being the way things were settled – until the next generation was able to plot revenge.

Before the First World War, the Mafia became a significant force in Southern Italy. There was no village untouched. Most were ruled by the Mafia which mobilised voters efficiently, usually without any threat. The Italian government basically held the bigger towns, but the countryside was run by Mafia families. The Mafia was a pseudo solution to a deep structural problem in Italy's South where every business initiative was stifled by the ruling class. Since the Government in Rome never launch any significant structural reform, the South missed the industrial development that started to transform Italy by the end of the 19th century..

The Mafia's power was so unchallenged that over 40’000 young men hid in Sicily’s mountains to avoid serving during the First World War. The number for the entire South must have been twice as high. Italy’s Army was short of four divisions due to Mafia protected desertion.

Mass Arrests of Mafia Members under Mussolini - date of the photo unknown

When Mussolini came to power, this state in the state was a thorn in his eye. He waited until 1926 to strike, starting in Sicily. Mussolini wanted to rebuild the Roman Empire and had no tolerance for anyone opposing him. The war against the Mafia followed the strategy “we are the bigger thugs” and was conducted like a civil war. Villages were surrounded and shelled into surrender. Suspected Mafia members were interned, their wives raped and their children taken to orphanages. It was brutal. Mussolini was able to suppress the Mafia and people eventually pledged alliance to him. Until the Allied Forces arrived in 1943/44. Remember the celebrations when the Calabrian villages were liberated by Canadians and Brits? For the locals, Mussolini’s Fascist Government was the enemy. Like the nobles 200 years earlier.

Villages and Towns in Calabria still having significant Mafia ties today

It is thus not surprising that Mafia sympathizers captured large parts of the political sphere after World War II. And the ruling political party, the Democrazia Christiana, closed both eyes – it wanted the votes to beat the Communist in the national elections. Without the support of the Mafia, many DC representatives would never have made it to Rome. But of course, the Mafia extracted a price and kept on "raising" Protection Money, smuggling contraband and imposing their own jurisdiction on the shadow economy.

The now idillic Town of Madera in Northern Puglia

It would probably all have gone on forever had the Italian Government and the Media not been appalled by the abysmal misery of places such as Matera in Puglia where people still lived in caves. Massif infrastructure investments were spoken and – of course – the Mafia wanted to have a say. Except that it did not. The Government in Rome had its own plans and the war with the Mafia resumed in the 1960s. From then on, the Government in Rome was the enemy again and many people in the south clandestinely supported the mafiosi.

Today only Museums remind us of the abysmal Poverty in the Cavesof Matera

The war against the Mafia escalated quickly. Many of us remember the brutal murder of Giovanni Falcone in 1992, a state prosecutor, who was killed by an Improvised Explosive Device the Mafia had placed underneath a highway close to Palermo. It was carnage on a scale not seen before in Europe. Thousands of arrests, convictions and lengthy prison sentences followed. The state took on the Mafia with full force.

The Mezzogiorno's stagnating GDP/Capita from 2005 to 2016

The US GDP/Capital from 2005 to 2019 - what an amazing Difference - Growth vs Stagnation!

Except that it did not. For most people, opening a business or getting jobs was as impossible as ever due to the Government bureaucracy. The stifling grip Italy’s social state developed on every aspect of civil society prevent any bottom-up development of Southern Italy. Neither Italy’s multibillion investments into Southern Italy’s infrastructure – the highways are terrific I have to admit – nor the money the EU Infra-Structure Fund made available made any difference. Entrepreneurship was stifled and unwelcome. Today, Italy is one of the most difficult countries to start a business.

Southern Italy's GDP/Capita compared to the Rest of Italy - after 1885 the South stagnated

According to the OECD, , Italy’s shadow economy accounts for about EUR 200bn of the economy. That is a massive 15% of Italy’s 2019 GDP. Go a step further and compare these 200bn to the official GDP number of Italy’s South: 200bn! It basically means that half of Southern Italy lives in the shadow economy. Since any shadow economy needs rules and arbiters – that is what the Mafia and the ‘Ndrangheta still do.

It is thus no surprise that they are still there. Defeating the Mafia with a pure criminalisation strategy has worked in the US where it has no popular support. Italy is different where the Government is for many - not only in the south - a bureaucracy which does nothing for the ordinary citizen. The Mafia will not cease to exist until the underlying cause of this malaise is addressed. Italy needs to be governed for its citizens and delegate power to people. Not power to the government. I guess we won't see any open signs of Mafia presence during our trip - but it is there and alive .

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