Everyone remembers the tale of Al Capone, the ruthless gangster who ruled Chicago in the 1920s. A courageous G-man named Eliot Ness formed "the Untouchables," a tough and incorruptible team that smashed the mobster's rackets one by one.
Then, in an ingenious move, Internal Revenue Service accountants nailed Capone for tax evasion and sent him to the Big House for 11 years. Law and order were restored. Children laughed in the sunny streets of Chicago, the music played and the credits rolled.
At least that's how we remember the story thanks to the old television show and far too many movies. Sadly, little about this story is true. Even more unfortunately, the Capone myth continues to be the model for our thinking about organized crime and how we should deal with today's chopper-riding gangsters, the Hells Angels.
An extensive, multi-part investigative series published in The Globe and Mail revealed that the Angels are violent cocaine traffickers with deep roots in Ontario and across the country. Who knew?
Apparently not the Globe's editorial writers, who penned a shocked and appalled editorial calling for -- wait for it -- tougher laws and a crackdown. Maybe Kevin Costner and Sean Connery will reprise their roles.
Really, I don't want to mock the Globe. I'm sure most Canadians would agree that the solution to gangsterism is more cops and laws because that's the Al Capone story. Send in Eliot Ness and get the accountants to follow the money. That's what took down Scarface and it can do the same to these punks. After all, this is what the police constantly tell us. Just give us more money and power, they say.
What the police don't say, however, is that we've been giving them more money and power for years and although they've been stuffing the prisons with bad guys, there are lots more bad guys running around on our streets. There's a reason for that. It's the same reason why much of the story of Al Capone as we know it is false.
"Capone neither 'ran' Chicago nor the Chicago rackets," writes historian Michael Woodiwiss in Organized Crime and American Power. That's because, like most organized crime, the so-called Capone gang was not the formal, hierarchical organization we imagine when we think of organized crime. It was instead a loose, decentralized system of alliances and business relationships.
Capone's bootlegging, gambling and prostitution operations "were not controlled bureaucratically," writes historian Mark Haller. "Each, instead, was a separate enterprise of small or relatively small scale. Most had managers who were also partners. Co-ordination was possible because the senior partners, with an interest in each of the enterprises, exerted influence across a range of activities."
At this point, the reader may be nodding off. Organizational structure?Who but an MBA could possibly care?It's a lot more thrilling to talk about gin joints, Tommy guns and takedowns. But as it turns out -- MBAs will be delighted to hear -- organizational structure was critical to the Capone story. The loose associations of the Chicago underworld formed a resilient, multi-dimensional web in which any man could easily be replaced. Not even the great Al Capone was essential. "Capone's removal as a criminal force in Chicago made no difference to the extent of the illegal enterprise in the city," writes Woodiwiss.
Organized Crime Runs On Decentralization
Now, if Capone's organizational structure were unique to 1920s Chicago, none of this would be terribly relevant. But as it turns out, decentralization is the rule in organized crime. The reason for this is almost Darwinian: Formal hierarchies collapse if key figures at the top are taken out, whereas decentralized networks shift and adapt when someone is killed or imprisoned.
The Colombian cocaine trade is a perfect illustration, having moved in 30 years from domination by Pablo Escobar and the Medellin cartel to a complex array of tiny, loosely affiliated groups.
The same evolutionary forces were at work here in Canada when Quebec Hells Angels leader Maurice "Mom" Boucher launched a war to monopolize the drug trade and make himself lord of the underworld. Bikers died by the score and most of the survivors are in prison, including "Mom."
As the gangsters say in hard-boiled novels: Not smart. The Ontario Angels have learned the lesson and they run a decentralized system of alliances and relationships that Al Capone would certainly recognize.
Capone would also recognize the Angels' main money-makers: drugs, prostitution and, to a lesser extent, illegal gambling. Whether it's 1920s Chicago or Ontario in the new millennium, organized crime exists mainly to satisfy black markets. True, gangsters also engage in extortion, fraud and theft. But the really big money is, and always has been, in supplying forbidden goods and services.
Capone always insisted he was "just a businessman" and he was right. Organized crime is a business. It happens to be an illegal business in which disputes are settled with uglier means than lawsuits, but it is still a business.
Gangsters might break criminal laws, but they have to obey economic laws, including the fundamental law that demand creates supply. They only sell what people want and cannot get legally. Jail them and someone else takes over. There's always someone else because black markets are, almost by definition, fantastically profitable, and nothing motivates human beings like fantastic profit.
That is demand creating supply. Even more than decentralized organization, it is the reason why, when the Feds took down Al Capone, nobody went thirsty in Chicago. It's also why, even with "Mom" Boucher locked away, Montrealers have no problem finding a line to toot or a fatty to spark. And it's why giving the police in Ontario more money and power may fill the prisons with Hells Angels, but it won't touch the underlying criminality.
To do that, we have to accept that organized crime is an economic problem and look for an economic solution.
In 1933, Chicago hit upon such a solution. It didn't involve the police. It had nothing to do with accountants. And yet it wiped out the black market in alcohol and put an end to the glory days of the gangsters.
It was the repeal of Prohibition.
Most Canadians may not be prepared for such radical stuff but the inevitable failure of the cops-and-crackdowns approach will give them plenty of time to contemplate alternatives.
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