Mafia capitalism takes the same route as the Titanic on its maiden voyage…

Capitalism with a dash of  socialism to add a restraining touch of morality  is, arguably, the least-worst economic option for running a country’s economy. Certainly better than Communism under inevitably self-perpetuating elites.

But shareholder-based capitalism is flawed and possibly doomed, because its aim is the short-term maximisation of profits for the shareholder rather than the long-term growth and health of businesses in which the shareholders invest. The aim is short-term profit-taking, not efficiency. In that sense, it has the same flaws as countries run by dictators or businesses run by criminal organisations… or, indeed, countries run by criminal organisations.

Which brings me to Italy.

I have just arrived in Milan for a couple of days.

I have blogged about the Mafia before…

According to a report issued two days ago, the Mafia is now “Italy’s biggest business”. But this is hardly news – ’twas ever thus in my lifetime.

Post-War Italy was, in effect, run by the secret Masonic lodge P2 (Propaganda Due) for around thirty years: an unholy alliance of politicians, big business, the military, the intelligence services and the Mafia. It was a conspiracy theorist’s most paranoid dream come true.

The real ‘new’ news story about the Mafia’s financial power seems to be that the current world financial crisis has particularly hit Italy and has partially unified the traditional Mafia groups.

In the current economic crisis, traditional banks are reluctant to lend, so many Italian businesses nationwide have been forced to borrow at crippling rates of interest from organised crime, including the three big Mafia groups – the Cosa Nostra, the Camorra and the ‘Ndrangheta.

As a result, the Mafia now have an alleged annual turnover of around £116 billion with reserves of 65 billion Euros, making them “Italy’s biggest bank”.

This is according to a report issued a couple of days ago by Confesercenti, a prominent employers’ association which represents 270,000 small-to-medium businesses. They simply called their report Criminality’s Grip on Business  and it says the Mafia account for around 7% of Italy’s Gross Domestic Profit – and we are talking very ‘gross’ here.

Marco Venturi, the president of Confesercenti, was quoted as saying: “According to our estimates, loan sharking caused the closure in 2010 of 1,800 businesses and destroyed thousands of jobs. Right now, Mafia Inc is the only business enterprise willing to make substantial investments.”

That sounds to me like a man with an eye for publicity.

But, basically, if you are running a small business facing ruin and potential closure in the current economic crisis where banks are only interested in short-term strategies, you have few options to try to save yourself except to borrow from the Mafia… which ironically may itself result in ruin and the potential closure of your business.

Small business owners with tight margins and limited cash flow also, as always, face extortion and straight robbery by the Mafia, at a reported rate of one crime every minute.

This week’s Confesercenti report says the influence of various mafias is now being felt not only in traditional strongholds such as Naples and Palermo, but increasingly in the wealthy north of Italy, in regions such as Lombardy – in other words, the country’s business capital of Milan – and the report says the mafias have expanded there with the “complicity” of some politicians, as well as lawyers and accountants.

Again – perhaps especially in Italy – that comes as no surprise.

Another report this week – by Libera, an anti-Mafia association – says the average adult Italian spends nearly 1,300 Euros every year on slot machines, bingo and other forms of gambling. This 76 billion Euro market is Italy’s third biggest industry and the Libera report claims the Mafia have also now moved into what the report calls ‘new’ areas of business such as public health, transport and logistics.

Milan is known for its fashion industry and now seems to have picked up the latest street fashion – criminal organisations running not just Big Business but the country’s infrastructure.

Well, that is the story.

In fact, I think, as I said earlier, this is hardly news – ’twas ever thus in my lifetime.

In Italy, traditions run deep.

“Killer Bitch”, a UK crime crisis and “Citizen Kane”

I was talking to one of the Killer Bitch cast yesterday and (as one who knows) he came out with the legendary line: “I’ve got no money at the moment and xxxx xxxxxxx ain’t got no money either. The bottom’s fallen out of Crime.”

Has Britain fallen this low? Sir Francis Drake made England great by robbing Spanish ships of their gold and the East India Company built Queen Victoria’s glorious British Empire on the heroin trade.

We live in difficult economic times. Or do we? Opinion varies.

A recent report said organised crime caused “an estimated £30 billion a year in social and economic harm” to the UK. I’m not quite sure what “harm” means in this context. Presumably it means there is a £30 billion black economy underpinning the ‘legitimate’ economy. But it’s all guestimates on guestimates. A recent report by the Association of Chief Police Officers claimed the UK underworld economy is now worth around £40 billion a year.

I’m more concerned that fake DVD production is now reckoned to be worth £300 million in the UK. I had vaguely hoped Killer Bitch might be fairly immune to this because I had hoped that the people most likely to rip us off were actually involved in the movie in some way – and therefore highly unlikely to rip us off. I had, however, reckoned without the international nature of modern movie rip-off-dom.

Still, I am filled with hope for the future of Killer Bitch because Michael Deeley, the highly-regarded head of British Lion Films reportedly said, when his company released The Wicker Man in 1973, that it was the worst film he had ever seen. Years later, the equally highly-regarded Cinefantastique magazine devoted at entire issue to The Wicker Man, famously calling it “the Citizen Kane of horror films”, while the Los Angeles Times said it was: “Witty & scary! No one who sits through it to the end is likely to find it easy to shake off.”

Likewise, no-one who sits through Killer Bitch with an increasingly dropped jaw and open mouth is ever likely to forget it. Bland it is certainly not.