Mises Daily Articles

With the passing of John Gotti, the former "head" of the Gambino crime family, we have been treated to a series of media stories, some of which condemn the Teflon Don and others versed in a grudging admiration for this character. These stories have managed to miss nearly every lesson this violent man’s life had to show us.

Gotti was by all accounts a violent man. He was able to parlay his ruthlessness into wealth, albeit temporary, but it also led to his downfall. The world is full of violent men, however, few of whom are wealthy. The reason for Gotti's brief foray into wealth and power--like that of another famous don, Al Capone--ultimately came from the state, that same entity that finally imprisoned and killed him.1

Reporters breathlessly wrote about Gotti’s $3,000 suits, but failed to point out how the man was able to make that kind of money. He did it in two ways: one by providing goods that people wanted yet were prohibited by the state from obtaining, and the other by extracting and extorting money from people who rather would not have paid him.

The goods, of course, included drugs, prostitution, and gambling. (By running a lottery, the state of New York deprived Gotti's organization from providing the "numbers" game.) In the days of Al Capone, that group of forbidden things also included alcoholic beverages. At that time, people who made and sold beer looked pretty scary; today, they look like members of the Coors family standing before a backdrop of the Colorado Rockies as they advertise their products. This should tell us something about government prohibition.

As for Gotti's extortion rackets, they came in two forms, the first from members of labor unions and the second from business owners who received "protection." That many unions have been bastions of organized crime is hardly surprising. Since most unions are also wards of the state, however, and since they are the source of votes for the political classes, it is hardly surprising that mafiosoi have been able to operate pretty much unmolested on the docks and elsewhere.

(I might add that most government employee unions, such as the National Education Association, are pretty much mafia-free. Since those folks produce services that most people would rather not have, it is not surprising that the mafia would have nothing to do with them. Furthermore, government employee unions have their own violent entity doing their dirty work: the state.)

Like all other things "provided" by crime organizations, "protection" rackets sprang from a need by small business owners to have their property protected from thieves and robbers. Although there was an implied threat from mafiosoi who offered "protection" for a small sum per week, most gangsters usually kept other predators away. (I am not endorsing this activity, since business owners who refused "protection" soon were provided reasons why they "needed" it in the first place.)

However, the reason that gangsters were able to move into neighborhoods and entice people with protection money was that police protection from the state virtually was nonexistent. Given the proclivities of the state, most people came to prefer being protected by swaggering organized crime figures rather than by the bumbling government.

While organized crime figures had the reputation for violence, they generally were violent with each other, not the public at large. There have been exceptions, of course. A few months after a neighbor accidentally hit and killed Gotti’s 12-year-old son with his car, he was hustled into a van and never seen again, no doubt the murder victim of the vengeful Gotti.

This is not to excuse the murder and mayhem that mafiosoi inflicted upon each other, but it needs to be pointed out that violence always accompanies markets that the state has declared illegal. As mentioned earlier, during Prohibition, gangsters like Al Capone were in charge of producing and distributing alcoholic beverages. Today, the producers and distributors generally are mild-mannered and law abiding, and their activities are not accompanied by violence, at least on their part. Or, as one libertarian friend put it to me, one does not see drivers of beer trucks shooting at each other.

Gotti achieved folk hero status for another reason: he managed to beat government criminal charges on a number of occasions, that is until the FBI was able to secretly record nearly every word he spoke by bugging his home and business club. Most law-abiding Americans recoil in horror at seeing someone "beat the rap," and in their frustration, they have permitted the political classes to push through laws that supposedly were aimed at "mafia kingpins," but instead have been turned full force on ordinary citizens.  

Known as anti-drug laws and the Racketeer Influenced Corrupt Organizations Act, or RICO, these laws have eviscerated protections once provided by the U.S. Constitution and have resulted in thousands of innocent people being thrown into federal prisons.

Thus, when the government turns its full fury upon people, they rarely can stand up to federal prosecutors. Even wealthy people such as Michael Milken and Leona Helmsley, who commanded large amounts of resources, would fall before what, in essence, were trumped-up charges.  Regular middle-class people don’t stand a chance.

Therefore, when Gotti received "not guilty" verdicts, a large number of folks stood up and cheered. They were not applauding murder and other crimes; they simply understood that few people can withstand the blows of the state, and anyone who can do so is someone special.

Finally, we look at the modern state itself, which certainly has many of the worst characteristics--and none of the good ones--of the men of Cosa Nostra. Like John Gotti, the state can extort money from citizens. Unlike Gotti, who never would have dreamed of demanding nearly half of a firm’s profits, the state takes more than 40 percent of what a business collects over its costs.

Like Gotti, the state takes the lives of individuals. Unlike Gotti, it is rare that a representative of government who has killed someone, even if that killing is not in self-defense, ever faces justice for that homicide. From the government agents at Waco to the Air Force pilot who fired a missile into a Serbian passenger train and killed 24 innocent men, women, and children, these people either are praised as heroes or excused for causing "collateral damage."

For the most part, people realize that the federal government’s private war against John Gotti did no good for the rest of us. Yes, Gotti was an unsavory character, a man that few of us would have wanted for a neighbor. Many people rightly feared him. However, the vast majority of us have much more to fear from the Teflon State than we ever did from the Teflon Don.

• 1. While Gotti died of throat cancer, it is likely that had he not been imprisoned, he could have received much better medical care than he got while incarcerated.