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Mafia becomes "Italy's largest bank" in aftermath of financial crisis (reuters.com)
150 points by cs702 on Jan 11, 2012 | hide | past | favorite | 55 comments


This is one of the greatest hypocrisies the European Union is committing. The EU (Germany and France) are putting the Italian government under a lot of pressure to stabilize the economy but no one ever (including the new Italian PM) mentions the plague of criminal organizations running the show in Italy.

Even if Italy manages to get out of the current economical turmoil, there will always be half of the country (some say the whole country) literally in the hands of criminal organizations with huge power and virtually unlimited funds.

How can the new PM (Monti) dare to talk about "development" where the moment you open a shop or a business you will be forced to pay a "premium" to some thug. Banks in Italy have been historically very cautious about lending money to businesses and the result is that business-owners have to use the "other bank" to survive a bit longer. And again, nothing has been done to facilitate access to line of credits for businesses. The only thing that has increased is taxation (a business in Italy now pays over 50% in taxes).

If the cancer of Mafia is not eradicated once for all, Italy will never become a modern country.


Literally? They must have impossibly large hands.


[deleted]


If you really can't figure out the difference between the two, I suggest you go have a long think about it.

Modern, western governments, for instance, generally do not do things like dissolve children in acid.

We get that you don't think there should be any government or whatever libertopian ideas you have, but let's try a bit harder.


One should not need to be "libertopian" to find many of the actions of governments abhorrent.

I imagine you are OK with "sanctions" that cause children to starve and to watch their psychologically destroyed parents crumble under the (very much intended) pressure of the sanctions to overturn a dictatorship.

Over the past few decades, the US government has committed horrible atrocities against civilian populations of a variety of nations. Much of this was "indirect", its indirectness a virtue in terms of "economy of force".

There is absolutely no moral high ground enjoyed by governments compared to mafia or other criminal organizations, it's just a matter of how elaborate the propaganda effort has been to create the perception that the acts are just... and in many cases there is lots of doublespeak employed to prevent the brains of observers from drawing the obvious connection.

Torture is called "enhanced interrogation"

Disrupting a society with bombs is called "preserving the stability of a region".

Running secret assassination programs is called "covert operations"


> There is absolutely no moral high ground enjoyed by governments compared to mafia

You're conflating an occupying army with a democratically elected government staying within its borders. That seems like a huge leap to make, and is spoken like someone with no exposure to the realities of organized crime and its deleterious effects on society.

If you look at this chart: http://it.wikipedia.org/wiki/Regioni_d%27Italia#Dati_economi... and rank it by 'PIL Pro Capite' (Per capita GDP), the correlation with organized crime is fairly strong, whereas the country and government are the same. Migration from South to North continues to far exceed North to South: apparently people prefer better government and less crime to the opposite.

This sort of sophomoric intellectual exercise doesn't do justice to what you believe in.


I think the parent is not conflating at all, you are separating the same issue into two different issues.

Democratic means very little unless:

- Everyone in the nation voted

- All votes were equally well informed on what they were voting for.

- All parties running were held account to what they were promising.

Americans love going on about democracy as if it's a universal truth of virtue. Yet they live in a corporate plutocracy.

Seriously wiping out tens of thousands of people in the name of "spreading freedom and democracy" is far worse than anything any (all?) organised crime has ever done.

There is no occupying army in North Korea or Iran, but they still feel the force US lead aggression through use of sanctions.

Don't read this as a defence of the mafia and organised crime. They are (for the most part) an extremely destructive force on society. But they are little-league compared to the U.S war/propaganda machine.


There are many examples of people being loyal to local gangsters and paying fees each month in exchange for "protection" from a rival group.

Governments run the same scheme at a larger scale. Sure they "provide" things, but it's simply by taking money from people and paying other people to do work, meanwhile enriching the officers of government and creating entrenched wealth and power.

Sure, there are occasionally coordination problems that are solved by governments, but far more coordination problems are solved by private organizations and firms.

Any institution that has the ability to project force wherever it wants (via an armed hitman or a smart bomb) is going to tend toward corrupt behavior.

Your comment mentions governments acting within their borders which is an arbitrary distinction. Most of the atrocities committed by the US government happen overseas and the American public is misled about the level of brutality being inflicted.

There will always be some gangsters who are preferred to others, and perhaps some "politicians" are preferred to gangsters. But this is a distinction of degree not of kind.


If there's no difference, perhaps you'd like to elucidate on the difference between, say, Sweden and the average 3rd/4th world nation? I mean, with the reach of Sweden's government, it's gotta be a hellhole, right?

This line of argument is generally referred to as "jumping the shark". Obviously there's a difference.


Ok, I'll answer:

Sweden: The president travels by motorcade with posh limos and armed agents, guns hidden but ready.

3rd world regime: The leader travels around in an SUV with machine-gun wielding guards.

Why do both leaders need to travel accompanied by such a display of force? The pageantry of such displays intimidate rivals.

The mistake those in the thread disagreeing with me are making is to assume that just b/c governments are less often observed to blatantly harass their own citizens, they are more civilized than the small time crooks whose lack of power occasionally necessitates messier tactics.

National boundaries should be thrown out the window. Obama has ordered the death of thousands during his regime and his minions have carried out the orders with precision. The rest of us (citizens) are equivalent to distant relatives sitting at the dinner table with Tony Soprano exchanging smalltalk, complicit and abetting every single action and willfully ignorant of all the (mostly brown skinned) people being exterminated.


"Sweden" ... "The mistake those in the thread disagreeing with me are making is to assume that just b/c governments are less often observed to blatantly harass their own citizens, they are more civilized than the small time crooks whose lack of power occasionally necessitates messier tactics." ... "Obama has ordered the death of thousands"

And you're making a number of mistakes:

1) Treating "government" as one common set of practices around the globe. Say what you will about Obama and the United States, but governments with more local interests (e.g., Switzerland, Iceland, etc.) are almost certainly better than organized crime groups for both their internal people AND those outside their boundaries.

2) It's simply wrong to state that the Swedish president traveling around with guards and their "hidden" arms is a display of pageantry. Rather, it's a well-founded (and tragically necessary) act of self-preservation: http://en.wikipedia.org/wiki/Assassination_of_Olof_Palme


What if the occupying army was sent by a democratically elected government? Is it OK because it happens to other people, far away?


If 'democratically elected' is a description that can be applied to the method via which Bush Junior made it to office then your question becomes even more ludicrous.


Taxes are public and known up front. If you don't pay them you don't risk physical harm.

Also you generally pay taxes on income and salaries, you don't have to pay just to be there.


> Taxes are public and known up front.

Mostly, but unless you're a salaried worker, there are often multiple interpretations with differing tax consequences. You pick the least taxes, the authorities pick the most taxed, and you battle it out in a playground in which the authorities have the upper hand.

> If you don't pay them you don't risk physical harm.

Tax collection is underwritten by the police, jail system, and eventually the US army if it would come to that. I would disagree with the "don't risk physical harm" aspect. Theoretically, you shouldn't. Practically, if you go to jail (and you WOULD if you don't pay your taxes), you risk very significant physical harm. The process is longer, and the agents are varied, but the risk is there.

> Also you generally pay taxes on income and salaries, you don't have to pay just to be there.

Don't buy the propaganda. Even if we disregard property taxes, which most countries and states have one way or another, the way they tax you just to "be there" is by debasing the currency.

Two years ago, $700 would have bought you an ounce of gold. Today, they buy less than half. And that's not some uncontrolled natural phenomenon - that has been orchestrated by the Fed.

You've been taxed just for being there, somewhere between 50% and 20% in the last two years, in addition to all other taxes you pay.

Assume you want to opt out of the game, by buying gold? Well, when you try to convert it back to dollars (to buy food or whatever), you'll being paying capital gains tax. Between 15% and 48%, depending on the state in the US you are, and how well you can do your taxes.

You are paying just to be there. If you believe otherwise, you might want to learn more about it.


Even if we disregard property taxes, which most countries and states have one way or another, the way they tax you just to "be there" is by debasing the currency.

Two years ago, $700 would have bought you an ounce of gold. Today, they buy less than half.

That has absolutely nothing to do with inflation, so I'm not sure why you're conflating the two points, it really weakens your position.

As for the government not being allowed to "tax you just to be there", what on earth makes you think that your money is yours? Money and wealth are social constructs. If you want them, you have to accept the social obligations that come with them.

Get rid of government, and your money (gold or otherwise) is entirely worthless. The only thing of value without some form of government is either a sack of potatoes, or a sword to steal your neighbours' potatoes.


> That has absolutely nothing to do with inflation, so I'm not sure why you're conflating the two points, it really weakens your position.

I did not mention the word "inflation" in my post, and I'm not sure why you did. There are many sources of inflation, one of which is currency debasing, which is the only one that I referred to.

> As for the government not being allowed to "tax you just to be there", what on earth makes you think that your money is yours? Money and wealth are social constructs. If you want them, you have to accept the social obligations that come with them.

I didn't say they are not allowed - but the post I was replying to stated that "only the mafia taxes you for being there, governments don't", which is false (and I gave examples for that).

I don't have a problem with being "taxed just to be there". I do have a problem that the way this tax is applied is essentially (a) hidden from view and (b) decided by 5-10 people in every country, who usually have the banking system's best interests in mind. Currency debasing is a taxation method that hurts the people who saved, and rewards the people who were living on credit (that is, beyond their means). I don't know about you, but I think it is a horrible policy.

> Get rid of government, and your money (gold or otherwise) is entirely worthless. The only thing of value without some form of government is either a sack of potatoes, or a sword to steal your neighbours' potatoes.

As WalterBright remarked, gold is a surprisingly good store of wealth over the last 2000 years or so, and has kept its buying power despite political and economical changes that have rendered fiat money worthless.

(No, I can't understand it, and it might not maintain that value in the future -- but disregarding thousands of years of history just because they make no sense is also not a good strategy)


Gold, going back to ancient times, has a remarkable ability to hold value regardless of governments.


In Italy, there is no jail for tax dodgers (perhaps that is the problem).


"Please explain the difference between this and any other government in the world."

You are joking, right?


Come on... Camorra, 'Ndrangheta and Mafia are not the same thing. Neither every one that borrows money at too high interest comes from Mafia. There is not such thing as a huge, bank, single, Mafia organization in Italy.

And in this article there are not even comparison of this crime (extortionate lending) in Italy with other countries.


"And in this article there are not even comparison of this crime (extortionate lending) in Italy with other countries."

I'm not sure what you mean by this, but if you're insinuating that it happens across Europe, then that's not true. The "extortionate lending market' so to say (of the extra-legal kind) is very, very small (to the point of non-existent) in Western European countries, whereas (according to this article and some others I've read) it's a sizable portion of Italy's GDP. That's an unacceptable situation.


> "And in this article there are not even comparison of this crime (extortionate lending) in Italy with other countries."

> I'm not sure what you mean by this, but if you're insinuating that it happens across Europe, then that's not true.

Italian-based organized crime does its business everywhere in Europe with success.

The only difference is that in Italy this dirty business is not hidden at all because criminals also run "consumer branches", while in the rest of EU they hide themselves behind commercial banks or companies.

Take for example waste management and disposal. Most of EU and international waste goes through the hand of organised crime [1] that offer lower prices and more efficient services to municipalities and states. This always happens through proxy companies with crystal-clear records.

Germany thought it was free of organised crime. Then the Duisburg killing happened [2] and they opened their eyes.

[1] http://books.google.co.uk/books?id=83BVyffqnJEC&pg=PA117... [2] http://de.wikipedia.org/wiki/Mafiamorde_von_Duisburg


You're right.

Some people don't understand the importance of Mafia in all the world - maybe 100 years ago it was limited to Italy, then it moved to USA, to East-Europe and so on, but mass-media still say it's limited to Italy. Ok, keep on living in the wonderland, I can't say any more..

They're "using" what they've earned in decades of selling drugs, prostitution and so on. Now they're honest employers recycling money. That's it.

I suggest you to read some books from Salvatore Lupo (Giovanni Falcone's "Cose di Cosa Nostra" too is a good introduction, ...), an Italian historian, whose activity is centered to study mafia and its origins.


Isn't their "higher efficiency" of waste disposal due to the fact they just dump it into the ocean rather than doing it properly?

http://en.wikipedia.org/wiki/Radioactive_waste_dumping_by_th...

The link also mentions the possibility that this is what pissed off Somalis and spurred the takeoff of piracy. (Not trying to justify it, please flame me for the right reason.)


> Isn't their "higher efficiency" of waste disposal due to the fact they just dump it into the ocean rather than doing it properly?

That is the "lower prices" part. The higher efficiency is due to the fact that the other legally-run companies are often hindered in their daily tasks by these organisations. In the last few years Italy has seen: fake strikes organised by bribed union leaders, waste treatment plants accidentally burned, key managers being forced to resign over "personal matters"…

You do not need to be that more efficient if you can make the others much less efficient.


That wikipedia page has an apostrophe in its URL:

https://en.wikipedia.org/wiki/Radioactive_waste_dumping_by_t...


You are probably right. But until somebody shows me a table comparing OCSE countries, I keep thinking the writer of the article has watched too many movies of the Godfather.


Come on... Camorra, 'Ndrangheta and Mafia are not the same thing.

Does it really matter? Isn't it more like you can see them as different branches of The Mafia, merely distinguishable from one another by their operation area (inside Italy)? The fact that Italian economy (and government, or society as a whole? But this would be another discussion!) is highly infiltrated by The Mafia (either active, by protection money or via loan-sharking, i.e.) and that an economic crises is a gift from heaven for them (there's a lot of black money to be laundered, in one way or the other), there's no need to distinguish between the different groups, IMHO.

I don't say that these groups and implications are an Italian singularity, but in Italy the implications for the Economy are maybe the worst (at least in the Western world). Or maybe I'm just naive?


It only matters because it makes you sound like you don't know what you're talking about. There is really no such thing as the "Mafia". It's a lot like calling every extremist Islamist group a branch of "Al Qaeda" – i.e., lumping a lot of categorically different groups into an imaginary hierarchy created by law enforcement and the media as a convenient scapegoat.


Where are you from? If you are from US, what you say is like taking all the criminal bands and small org across US and say: look what the US mob is doing...


I think, in this case and discussion, it's just about the scale of the influence and power. So yes, if you want to measure the influence and the power of the american mob to the US economy: sum it up and don't distinguish between different groups.


I agree on the scale, but then you really need to put a table comparing with other countries. What happens if I say Italians eat 100 M tonnes of ice scream per year? Is it a lot? A lot compared to what?

I don't agree on the influence and power and that's exactly the point. If you sum up all the US criminals, you get a raw index of criminality in the country, not how much power few criminals have over US people. If all US criminals where part of the same organization, the infamous US mob, that would be a huge problem then. But US mob does not exist, the same as Mafia does not rule all criminality in Italy.


Thank you. Pretty much any time you see the term "Mafia", you know you're dealing with amateur pseudo-journalism.

I came here to point out that Sicilian organized crime is probably not the "bank" here. Sicilian crime syndicates are generally not as powerful as the Campania/Napoli groups these days.

The Sicilian tradition of protection rackets is actually based on an (arguably) noble history of maintaining the integrity of blood family against a constant stream of outside conquerors. I'm not defending organized crime in any way shape or form, but lumping the protection rackets together with drug traffickers and other gangs is just kind of wrong on some level.


Your Sicily example and the article remind me of other "syndicates" operating in the wake of disaster and conflict. I'd read somewhere that the Yakuza have been tolerated for so long in Japan because of the social services and "protection" / "law enforcement" they provided in the aftermath of World War II. In Beirut, Hezbollah provides social services and protection that the State can't (or won't) particularly to the marginalized Palestinian refugee population.

Likewise, I'm not defending the tactics, but there's an interesting thread here.


It's definitely a common theme around the world.

I think it's not a coincidence that these places are islands or geographic crossroads where outside invasions are frequent during their history.

Speaking of Japan, here's another interesting variation on the theme: http://en.wikipedia.org/wiki/Zaibatsu

Note that the names of the Zaibatsu families are some of today's biggest names in industry and finance.


In the article, they probably meant "organized crime" as a whole. To a foreigner, Camorra and 'Ndrangheta don't say much.


They are not a huge single organized crime organization as the article says. There is no such thing. I bet legal lobbies in US deal with much more power and money than the single most powerful crime org in Italy.


FWIW, the Mafia in the US became a more institutional, more professional organization with the formation of "The Commission" in 1931 -- i.e., during the Great Depression:

http://en.wikipedia.org/wiki/The_Commission_%28mafia%29

The New York Times calls 1931 the "birth of the American Mafia:" http://www.nytimes.com/2011/01/23/opinion/23raab.html

I wonder if prolonged economic downturns are somehow correlated with, or maybe even lead to, the rise of more powerful, more professional crime organizations...?


The US Italian mafia has been effectively been neutered since Gotti. Most of the modern powerful people got busted by RICO. In the US today, the most powerful are the Italians, Russians and the Mexican 'mafias'. The most influential may be from Mexico because the wars have spilled over across the border and they are the largest supplier of marijuana.

The truth is, at least with the Italian mafia, that the greatest success of the Italian mafia occurred during WWII. The CIA depended on them to provide them with information regarding Italy because Mussolini worked against mafia interests and Allies. It wasn't until the Kennedys took office that they heavily went after the mafia.

During wars it is known, at least in the US at that time and probably today, that it creates a healthy economy.

The reason why you see the economic downturns of today is because most Congressmen pass laws with loopholes. There was a time when a CEO didn't live in a lavish mansion over his employees. They managed their selfishness better back then. Today, most live in secluded areas so they don't have to deal with that harsh reality.


Well, somebody has to compensate for the lack of professionalism in legitimate business.


From the article, the only thing I noted from it was that the mafia was late to the game. These predatory lending practices is what led to the financial crisis and that companies, corporations and governments were more efficient at being gangsters.


This is such an important point: there is no difference between "too big to fail" and "an offer you can't refuse". It's protection racketeering in a five thousand dollar suit.

"Nice economy you have here. It would be a shame if anything happened to it."


Mafia uses violence. That's different.


So do governments ...


Sure. Governments like North Korea or China's is similar to the mafia.

But 1st world developed democracies are not.


This is the sort of sensationalistic stuff that happens when HN veers "off-topic".

If you want to look at the Mafia as one big organization, then in the same light, Italy's largest, and legitimate, lender is of course "The Family".


Another example of the remarkable prescience of Neal Stephenson's Snow Crash.


If you are unfamiliar with the Camorra I recommend this film: http://www.imdb.com/title/tt0929425/

Or, read Roberto Saviano's book.


I guess it's time to invest in Mafia?


Credit crunch is going to make an already terrible situation worse. The biggest problem is that every kind of "external" help (like, for example, EU lending money to italian banks at a low interest rate) is only going to help Mafia because they're deelpy entangled inside the italian government and banking system. The only viable strategy would be for EU to lend money directly to small businesses... but that's not going to happen.


Despite the fact that I will end up auto-dead for saying so, there is no difference between a government and an "organized crime" ring.


Assuming a government is democratic , not corrupt (or a close approximation of) and government by law a government has limits to where it can apply violence and must follow some due process that is deemed to be fair by a majority of democratically elected members. For that process to be changed said members must vote on changes and these must be published. This means that in theory rules should be made that are reasonable to the majority of the population, they might not be able to vote on all laws but if a representative votes for too many laws that are unfavorable he will be unelected.

The mafia works on the basis of fear since they will play by their own rule book that is likely decided upon in secret and not applied consistently. All rules will be made in favour of the rule makers themselves.

Imagine for a moment that we let private corporations hire goons with sticks and imagine that when you miss a payment instead of a polite but firm letter you came face to face with one of these goons at your doorstep and they have paid off the police to take no notice of what they do.


Plenty, a government is granted a monopoly on violence in order to block other players from getting into (or at least flexing their muscles in) the violence game.


It depends on the government. In the end, the fundamental proposition is that you pay into an institution that offers physical protection.

I find it fascinating that:

1) That model of government traces its roots straight to Ancient Rome.

2) Organized crime has a long history of stepping in to fill the vacuum of legitimate government - sometimes to profoundly negative effect, sometimes in a benevolent way.


Ohhh really?




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