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An Economic History of Organized Crime: A National and Transnational Approach

Author(s):McCarthy, Dennis M.P.
Reviewer(s):Dimico, Arcangelo

Published by EH.Net (September 2012)

Dennis M.P. McCarthy, An Economic History of Organized Crime: A National and Transnational Approach. New York: Routledge, 2011.? xi + 323 pp. $130 (hardcover), ISBN: 978-0-415-48796-2.

Reviewed for EH.Net by Arcangelo Dimico, Department of Economics, Queen’s University of Belfast.

Organized crime represents one of the largest businesses in the world. A recent report from the U.S. National Security Council, for example, estimates that total profits from global transnational organized crime (TOC) activities amount to almost $6 trillion (White House 2011, p. 5-8). In terms of GDP, transnational organized crime represents the third economy in the world ?behind only the United States and the European Union (EU) but well ahead of China? (Farah 2012, p. 3). The scale of TOC activities has largely increased over the last few decades. Criminal organizations were originally rigidly organized and locally concentrated in scope.? Significant political changes in the 1990s together with an increasing globalization and a higher freedom of movement of goods and people have caused an internationalization of these organized criminal groups over the last decades.? Making new alliances with other organizations around the world they have managed to spread the scope and extent of their activities engaging in a variety of legal and illegal business and representing a huge threat to common market rules and democracy (Kerry 1997).

The Sicilian Mafia is certainly the most widely known organized crime group and one of best examples of internationalization and intercontinental collaboration with other criminal groups. It originally developed as a private provider of protection for local businesses but then starting from the 1980s it entered into the heroin trafficking market by striking an alliance with the Colombian drug cartel. In a statement leaked to the Italian press, Antonio Giuffr? (a state witness and former right-hand man of Bernardo Provenzano) argues that the Sicilian Mafia used to provide arms and military advice to Pablo Escobar’s Medellin drug cartel in Colombia in exchange for heroin which then flowed back to the five main crime families of New York in exchange for dollars and weapons (Corriere della Sera 2004). As Colombians phased out of the drug business, the Sicilian Mafia made new agreements with the Mexican cartel which needed an entry point for Europe.

An Economic History of Organized Crime by Dennis M.P. McCarthy tries to shed lights on the origin and evolution of organized crime groups, underlining key events which have marked the process. McCarthy focuses on case studies and on a comparative analysis of different groups. He argues that the need for such a book comes from the fact that ?while economists and historians have written about organized crime, there is no international economic history on the topic? and? ?economic history is uniquely equipped to analyze all these changes as well as their material dimensions? (McCarthy 2011, p. 1).?

The book is organized according to geographical area. The first part deals with organized groups in Europe, the second is devoted to North America, the third to Central and South America (including the Caribbean basin), while the last two parts are dedicated to criminal organizations in Africa and Asia respectively. Each part includes two chapters and a final Vignette which is normally dedicated to a less narrated example.

The Italian and Russian mafias represent the core of the first part. With regards to the Italian mafia McCarthy concisely discusses the five main organized crime groups in the country, focusing mainly on the Sicilian mafia, ?Ndrangheta? (the Calabrian mafia), and Camorra (the Naples mafia), which of course represent the most influential criminal organizations in Italy. After establishing the geographical and social conditions which determined the development of these different criminal organizations, the author describes the evolution of each.

The same scheme is followed in the analysis of the Russian mafia. Two events are considered key in order to understand the origin and evolution of the Russian mafia. The first is the Russian Revolution. The second event is related to the collapse of the Soviet Union after which organized crime groups ?exploded, filling every state and non-state void? (McCarthy 2011, p. 66). The evolution is further discussed, pinning down the level of collusion between formal and informal institutions and the influences of organized crime groups over national politics.? This first part ends with a Vignette about the Albanian mafia stressing its role as a bridge between the Middle East and the West (the Balkan Connection).

The second part of the book focuses on the U.S. mafia and on the Mexican drug cartel. McCarthy stresses the importance of Prohibition and the strategic acuteness of Lucky Luciano.? I found particularly interesting the choice to discuss the Cleveland mafia, which has been neglected but which played a crucial role in the diffusion of mafia in the U.S.

In the chapter on the Mexican cartel, McCarthy stresses the importance of two exogenous conditions ? the large demand of cocaine in the U.S. and the efforts of the U.S. government to shut down the Caribbean transit corridor. These two exogenous conditions induced South American drug cartels to switch routes moving illegal drug through Mexico.? The chapter also covers the evolution of the Gulf Cartel and Los Zetas, the Sinaloa, La Familia, and other drug cartels. Canadian organized groups and their link with the U.S. and Mexican groups are covered in the Vignette.

Part III deals with the Colombian drug cartel and gangs of the Caribbean. McCarthy starts with the Medellin cartel and how Pablo Escobar turned the country in a ?marijuana factory.? He also describes Escobar?s excellent money laundering skills. The Cali and the Norte Del Valle cartels are also described. Gangs in Jamaica are the focus of the second chapter, while Cuban gangs are covered in the Vignette.

The last two parts of the book deal with Africa and Asia. The resource wars, the Somali pirates, and drug trafficking in North and West Africa are the topics covered in part IV, while part V looks at the Triads in China, the Yakuza of Japan, and the problem of drug trafficking in Afghanistan.

The book represents an interesting source of information with several anecdotes discussed in each chapter. Yet there are a few questions which pop up while you read the book.? First, each chapter seems to stand alone with not much comparative analysis between different organizations which is one of the targets the author sets at the beginning. In addition, after finishing the book you cannot avoid wondering if there is something that we have learned about organized crime in general and whether there is something common to all these groups which can help us to identify them. This perception results from the fact that the book does not make clear what an organized group is. McCarthy decides to use a broad definition because, according to him, there is not a single model of organized crime and therefore any restrictive definition may constitute a loss of information and an analytical flaw. The problem is that by using a broad definition he runs into the same mistakes which he wants to avoid. First, the reader loses track of the common elements about organized crime which are important in order to have a general idea of the phenomenon. Second, he seems to lose analytical traction.? The author could have made better use of economic analysis to pin down the structure and mechanisms behind organized crime groups. Though he introduces basic concepts and methods of economic analysis at the beginning of the book, these methods are hardly used throughout the book.

Overall I consider An Economic History of Organized Crime a good introduction to the topic with interesting anecdotes which can interest a reader who wants to have a general idea about organized crime before starting a much more detailed analysis of the topic. Maybe this is the problem with the book. At the beginning, it sets expectations a bit high, leaving the reader with a sense of incompleteness.


Corriere della Sera (2004) ?Giuffr? all’ Fbi: Narcos di Medellin Aiutati da Riina,? Corriere della Sera, 10/12/2004.

Farah, Douglas (2012) ?Transnational Organized Crime, Terrorism, and Criminalized States in Latin America: An Emerging Tier-One National Security Priority,? Strategic Studies Institute Monograph

Kerry, John (1997) The New War: The Web of Crime That Threatens America’s Security, Simon & Schuster.

White House (2011) ?Strategy to Combat Transnational Organized Groups,? National Security Council Staff Report

Arcangelo Dimico is a Lecturer in Economics at the Queen?s University of Belfast. His research focuses on political economy and development economics and with a particular interest in the development and effects of formal and informal institutions. He is author of ?Origins of the Sicilian Mafia: The Market for Lemons? (with Alessia Isopi and Ola Olsson), ?The Racial Gap in Education and the Legacy of Slavery? (with Graziella Bertocchi), and ?Biogeographical Conditions, the Transition to Agriculture and Long-Run Growth? (with Michael Bleaney).

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Subject(s):Markets and Institutions
Social and Cultural History, including Race, Ethnicity and Gender
Geographic Area(s):General, International, or Comparative
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII