Assuming that drugs, weapons, gambling and prostitution are legalized tomorrow, would mobsters, in the form of local protection rackets survive?
To push the argument a little further, let us take the choice between lower taxes and keeping the current level of regulation in place, or else lessening regulations and keeping taxes intact. Now in some communities it just could happen that most people prefer more taxes and less regulation, to the other option. To go to logical extremes, an all-rule/no-tax country could be something like Nazi Germany, while an all-tax/no-rule country would be something like the local Mafia racket.
Hence, does the presence of local protection (not trafficking) rackets indicate a general preference of the locals for more taxes and less regulation (against its opposite of course), assuming such racket could persuade police forces to close an eye on the infringement of some local regulation?
Wouldn’t, than, such rackets still have and economic incentive to function (lowering regulation for people at some price), at least is some areas, even if all their major revenue sources would be legalized? Does, thus, a protection racket actually serve a more-or-less decent purpose?
I don’t quite understand how the libertarian concept of PDA’s is really much different than protection rackets. Without the state, those unwilling to personally defend themselves will have to hire someone to do it for them, or face the consequences. Different agencies (gangs) will compete for business territories, there will be truces between firms, etc. Of course, if protection rackets were legal (or there was no absolute law), they would probably become a little less unsavory in their business practices, as they be in constant competition from up-and-comers, as opposed to buying monopoly privilege from the central authority via bribes.
The difference between the two, as I understand it, is that mafia protection rackets are extortionist while PDA’s are not. My knowledge here is coming from pop culture, but when a merchant denies payment to the mob for protection, the gang roughs up the shopkeeper. If I were to cancel my subscription to XYZ Defense insurance, I would still have to “face the consequences,” but not worry about the agency coming to break my legs. I think the distinction is pretty clear.
That is right, and this is precisely the kind of ‘protection” racket I have in mind. So, could they survive to service the taxes-to-regulation exchange?
I’m not sure if I completely understand the scenario, so my response may be off base here. The mafia racket might very well serve a decent purpose in providing protection at a lower monetary cost in exchange for worse “customer service.” Does the state still have a legal monopoly on force beyond the ability to collect taxes? If so I would be more supportive of an illicit defense service such as the mob. But if the market has free entry for other defense agencies, I don’t see how the mob could compete with companies that don’t threaten their clients. Perhaps they might find a niche in protecting undesirables like violent criminals or other hated minorities.
The mob would survive, so long as they can compete with companies that sell drugs, prostitution, etc. In many cases, I can see the mob becoming unpopular for their intimidating ways of doing business.
A mob protection racket is a just a state within the state: the mob takes advantage of the fact that the state is incapable of protecting the people it taxes, so it taxes them more.
If people could purchase real protection, this would not be possible.