Organised Crime and Labor Markets in the Southern Italy: Some Considerations on Inequality, Power and Trust.
In the Southern Italy, organised crime exerts a huge influence on the working of labour markets and on the way firms manage their relations. It is one of the major causes of corruption and inequality created in Italy. Given the lack of judicial and enforcement tools in these regions, Mafia organisations exploit labour for their economic profit, especially with immigrants coming to Italy from Africa, Asia and Eastern Europe. The Mafia utilises their labour and provides them with minimal wages and dismal housing.
Arlacchi (1986) has been one of the first researchers that analysed the “entrepreneurial mafia” underlining the mafiosi’s growing involvement in licit and illicit economics activities. By shifting away attention from conventional licit and illicit entrepreneurial activities, Gambetta argued that mafia must been understood as “a specific economic enterprise, an industry which produces, promotes and sells private protection” (Gambetta 1993:1). For instance, Sicilian and Calabrian mafia groups run several illicit businesses and offer unusual commodities like protection (Gambetta, 1993) but they also manage different legitimate businesses (Dalla Chiesa, 2012; Sciarrone, 2011). They take advantage of the absence of state enforcement of property and contractual rights (Garoupa, 2004) and they generate authority and produce power (Sterling, 1990), creating an autonomous social order based on high moral principles (Orlando 2001).
Criminal organisations may infiltrate and dominate a legitimate economy, through the division of labour and by using violence and corruption. For example, ‘Ndrangheta, succeeded in increasing its economic gains in Northern Italy through an efficient division between members who dealt with illicit affairs and those who laundered profits through legal investments (Varese, 2011: 31-64). Furthermore Varese (2012) explains that similar strategies are realised by Russian autochthonous criminal groups. Acting as organised crime sindicates, criminal organisations generate poverty, socio-economic inequality and therefore deprive underprivileged people of development opportunities.
In particular, this paper attempts to provide a conceptual framework for analysing the power of the Mafia in labour markets. The simple fact that mafia does exist and that it is successful, can be take as a strong indication that its power control pattern is an ideal-typical form of coordinating expectations and interaction among labour market agents. However power is not only the unique mean of co-ordinating the labour relations of the market: trust is also a social mechanism at work. Labour markets are based on contractual arrangements and also on shared informal rules and common culture (Marsden, 1999). Thus both power and trust are efficient means that greatly explain how the labour markets are influenced by Mafia’s organisation.
Furthermore, income inequality and control of corruption are significantly positively associated with social trust (Uslaner, 2002, 2008). Trust may also be moralistic (Hodgson) in the sense that it may based on close legitimate long-term relationships (Hodgson, 2013). These relationships may thus be used to contrast criminal closely-knit labour network.