POLS 4545 Final Paper (Andrew Farah)
Published on: Mar 4, 2016
Transcripts - POLS 4545 Final Paper (Andrew Farah)
ORGANIZED CRIME IN TWENTIETH CENTURY CHICAGO: AN ANALYSIS OF ITS
PARADOXICAL NATURE OF INTEGRATION
AP/POLS 4545: Approaches to American Politics
Course Director: Adam Hilton
May 11, 2015
The American phenomenon of organized crime has been wrongly antagonized in a
variety of scholarly literature. Robert F. Kennedy has presented it in military terms; declaring
that organized crime is the “enemy,” and the syndicates must be dealt with through “war.”1
Smith C. Dwight has taken a theoretical approach of cost-effectiveness regarding the “tax
exempt” illicit fortunes accumulated by crime syndicates as a burden to the less affluent, honest
Michael D. Maltz has perceived it in the traditional sense; an ominous, power-hungry
institution bent on squeezing excessive profits from the victims of its criminal enterprises.3
Moreover, the theoretical approaches that flow through these publications are one-sided, and
ultimately incognizant to the paradoxical nature of organized crime.
This paper will take a neo-Marxist approach and elaborate on the paradoxical nature of
organized crime through its linkages with economic, judicial, and political institutions.4
argue that although organized crime has been intrinsically antagonized and often preconceived as
arbitrary, it has in fact been integral to the economic and political development of twentieth
century Chicago. Essentially, Chicago’s crime syndicates have matured through time from a
“predatory” form of capital accumulation to a “symbiotic one.”5
As predatory institutions, they
are vulnerable to the law enforcement apparatus and tend to focus on crimes with less exposure,
such as bank robberies and petty thievery.6
As symbiotic institutions, they integrate into the
legal, political, and economic apparatus by provisioning legal goods and services through illegal
means of distribution and production.7
As an established institution, their interests coincide with
those of society and the formal economy; they develop an affinity to the already existing legal
power structures, and conclusively harmonize as one entity spurring political and economic
There is much importance in taking an alternative and less antagonistic approach when
explaining the presence of organized crime in twentieth century Chicago. The crime syndicates’
operating during the 1920s were extremely integrated within Chicago’s political and economic
structures of development. They operated so boldly, and the successes of their exploits were so
well advertised, primarily resulting in an unprecedented degree of fear as a recognized
institution. They became the object of universal criticism towards themselves and the state of
Illinois as a whole. Most notably, their operations were advertised in newspapers on a national
basis establishing a worldwide perception of the state of Illinois as “the Crime Capital of the
Daniel Bell has taken a social approach in theorizing organized crime in his piece Crime
as an American Way of Life. He emphasized the ability of organized crime syndicates to socially
mobilize those in “less desirable” racial groups.9
Scholars like Peter A. Lupsha regarded this
social theoretical construct as the “ethnic succession thesis.”10
Essentially, this interpretation sees
organized crime as a catalyst for the adaptation of a deprived group to the limitations on upward
Organized crime plays a functional role in society, such that those involved in the
complex and ever changing structure of social deprivation and stratification have been provided
Lashly 1930, p. 588.
Bell 1953, p. 133.
Lupsha 1981, p. 3.
an undeniable opportunity of employment. Bell famously regarded organized crime as “one of
the queer latters of social mobility in the American way of life.”12
In Chicago’s urban dynamic of racial stratification, organized crime has played two
distinctive roles. First, it acted as a medium of mass consumption for the economy through the
illegal employment of those in “less desirable” ethnic groups. Second, it perpetuated a
paradoxical system of both the assimilation-to and the exclusion-from social norms for those of
less desirable ethnic groups. These individuals get excluded through the capitalist-like
arrangement of co-dependence with the leaders of these criminal organizations. In turn, they
receive the similar economic benefits as their socially accepted counterparts, yet are
incongruently further discriminated through their disposition within both a racially marginalized
category and that of delinquency. Moreover, an ethnic minority underclass is not only required,
but imperative for the successful operation of crime syndicates.13
In 1930 Chicago, these criminal organizations were remarkably diversified on a racial
basis. According to a study of 108 directors in the Chicago underworld done by William F.
Ogburn and Clark Tibbitts, 30 percent were of Italian background, 29 percent were of Irish
background, 20 percent were of Jewish background, and 12 percent were blacks.14
not one single leader was reported as a native, white-born American. They were racially
diversified because they stemmed from the neighborhoods, but operated within the city. Prior to
the 1920s they were held together by both their vices and neighborhood affiliations.15
petty thievery, and bank robberies acted as their main source of income, allowing them to
mobilize as neighborhood delinquents in the predatory stage of their institutional practice. In the
Bell 1953, p. 133.
mid 1920s, national prohibition functioned as an avenue towards their transformation from a
predatory institution to a more organized symbiotic one. The murder of Colosimo, head of the
Chicago underworld, and succession of John Torrio (also known as, “Johnny”), brought forth a
reform that resulted in a highly complex and integrated criminal organization; one encompassing
the vast involvement of the socially excluded less desirable individuals.16
During the entirety of the 1920s, Chicago’s crime syndicates were mostly Italian. There
were two dominant crime organizations in direct competition with one another, the Black Hand
and the Mafia. The Black Hand is perceived to have operated entirely within the immigrant
community, and affected only its residents. Alternatively, the Mafia from the early 1920s to the
1930s following prohibition began to move into “big time” crime, operating within the American
community as a whole.17
The Mafia became prominent in Chicago for two reasons. First, the
city’s vast racial diversity attracted them; and second, a series of events that exiled them from
both New York and New Orleans. On October 20, 1890, New Orleans superintendent of police
Peter Hennessey was violently murdered, and city residents assumed Sicilians to be responsible
because of Hennessey’s prior engagements with the Italian crime syndicates.18
After their exile
from New Orleans and their migration to Chicago, a popular assumption grew surrounding the
Mafia, one of a stereotypical and discriminatory nature towards those whom were both Italian
and uninvolved with criminal activities.19
This stereotypical nature towards Italians before the 1920s was not without good cause.
In the beginning of the twentieth century, Chicago possessed many characteristics of a “frontier
town,” some being commendable and others dreadful.20
It was optimistic and energetic, but also
chock-full of corruption, violence, apathy towards poverty, and organized crime.21
In William T.
Stead’s publication If Christ Came to Chicago, he observed and exemplified these conditions
upon visiting Chicago for a period of five years. He explained that Chicagoans alike, whether
crime syndicates, politicians, businessmen, or policemen had a common bond: money. “The
quest of the almighty dollar is their Holy Grail.” 22
In the late decade prior to the 1920’s, the interconnectedness between the Mafia and both
the politicians and businessmen of Chicago worked to proliferate the social statuses of Italian
immigrants, while simultaneously worsening the social statuses of blacks. In Chicago’s South
Side, known as the “Negro Neighborhood,” the appearance of large, old style one-family homes
masked the crammed and unhealthy living conditions of black individuals.23
They were living
without air, without proper sanitation, beside prostitution districts and districts of other vices, and
without surprise had their death rate twice as high as that of whites.24
These conditions brought forth the prominence of African-American organized crime in
Chicago, paralleling the Italian Mafia. They operated under the name “Black Hand,” and were in
fact integral to reshaping Chicago’s discriminatory racial dynamic.25
Previous literature however,
supports the “alien conspiracy theory,” which argues that the participation of African-Americans
and other minorities in organized crime only followed the decline of the traditional Italian-
Scholars have described African-Americans to lack the political associations
and organizational skills necessary to operate at the same level as Italian American crime
syndicates. They argue that the ethnic succession theory coupled with the absence of any
published account of African-American criminal groups proves their inferiority to Italians as
Robert M. Lombardo has taken a more appropriate approach; he argued that
although blacks were segregated, their criminal activities were just as entangled with legal
enterprises as their Italian counterparts were.28
Chicago’s South Side was a “black metropolis,”
with its own elected officials and business community.29
Moreover, the involvement of the Black
Hand both within that community and “white” Chicago worked to establish a symbiotic social
standing between the two.
Black or white, Mark H. Haller has interpreted organized crime as a thriving institution
through the interplay of three divergent groups. First, officials such as police officers and judges;
second, mediators within the legal system such as lawyers, bail bonds men, and politicians; and
third, criminals whose behavior was influenced by contact enforcement officials.30
monopolistic providers of illegal goods and services, their operations were immensely entangled
with dominant political, judicial, and economic enterprises. And conclusively, it must be
understood that following the 1930s it was widely accepted within Chicago that the business of
organized crime was to provide the legal public with illicit goods and services.31
include: bets, narcotics, sex out of wedlock and unregulated loans.32
In fact, the appendix on
organized crime in the Staff Report to the Commission on Violence states, “it is well known that
organized crime exists and thrives because it provides services the public demands” and
“organized crime depends not on victims, but on customers.”33
The dependence on customers also imposed a demand for employees to please those
customers. Young persons in ethnic ghettos fit the bill; in a city of racial segregation only three
paths lay open to them. First, they could join the vast “poor working stiffs,” in factories and
clerical jobs. Second, they could strive for college and eventually success, which only an
incremental few did. Third, they would join the occupational world of organized crime.34
urban politics the third avenue is seen as “urban machine politics:” regarded by many scholars as
a function of politics to provide mobility for some members of ethnic groups.35
avenue served as an advantage to the vast array of disadvantaged youth, but also perhaps their
only choice. Regardless of the decision made: to follow the legal path of success or one involved
with criminals, all sectors of employment were related to the institution of organized crime. In
business, politics, sports, and the entertainment districts, organized crime was pervasively
Therefore, the ambitious young men and women from the ghettos were in one way
or another involuntarily related to the institution of organized crime; all paths of employment
were undoubtedly interrelated.
The deep entanglement with an innumerable degree of legal institutions not only tainted
the integrity of Chicago’s economic system, but also proliferated its growth by serving as a front
Ibid. These quotes are from Task Force Report: Organized Crime, the President’s
Commission on Law Enforcement and Administration of Justice (Washington, D.C., 1967), p.1.
Haller 1971, p. 210.
Zink 1968. For other notable works on urban machine politics and mobility, see Merton,
Robert King, ed. Social theory and social structure. Simon and Schuster, 1968. and McKitrick,
Eric L. "The study of corruption." Political Science Quarterly (1957): 502-514.
Haller 1971, p. 212.
for the much deeper institutional practice of loansharking. Following World War I, loansharking
as a practice developed and functioned with an appearance of legality.37
institutionalized itself within the contours of both Chicago’s political and economic structure. In
fact, they operated much like a financial institution; prospective borrowers were investigated,
and if they did not hold steady jobs or had a steady income they did not receive the loan.38
were two types of loan sharking, the first were often referred to as “salary lenders;” the second
were simply “loan sharks.”39
Salary lenders would operate legally as lending institutions, but
their revenues would be funneled into the crime syndicate. The borrower would sign complicated
forms before receiving the loan, and they would be threatened with a lawsuit or in some cases
harassment, provided the loans were not repaid.40
Loan sharks made little pretense of legality,
and they established an understanding that the failure to repay would result in violence.41
salary lenders and loan sharks were immensely involved in the institutions of labor racketeering,
gambling, narcotics, and bootlegging. They worked to augment the incomes of those in
marginalized groups. And as a result, became a necessary evil, a practice wrongly accepted by
the Chicago citizenry as a whole.
Loansharking in Chicago became so prominent that it has adopted a social stigma. There
are numerous public documents and newspaper reports with cases in which consumers have been
charged an astronomical true annual rate of interest for a small loan, however they were
overlooked. These rates included numbers from 200 percent to 2000 percent annually; it highly
depended on the relationship between the lender and the borrower.42
Moreover, after gambling,
loansharking was the largest revenue stream for crime syndicates. It worked to keep the
institution of organized crime alive, provide less desirable youth with employment opportunities,
and ultimately challenge the established system of white supremacy. Loansharking is the
paradoxical practice that worked to proliferate the entanglement of the crime syndicate with the
society in twentieth century Chicago.
In taking a neo-Marxist approach, the deep entanglement of the crime syndicate with the
political and economic elites can be classified as a “racket.”43
The term racket is used as a new
type of classification that works to elaborate the underlying similarities between societal elites
and crime syndicates. In essence, it’s “a system of obtaining money fraudulently or by threat of
violence, usually with the outward consent of victims.”44
Both the political, economic, and
criminal elites in twentieth century Chicago were considered racketeers. And although they
provided protection, they established a new sense of domination. Horkheimer emphasized
rackets instead of classes to include the notion of coercion.45
As part of a racket acting through
means of coercion, criminal organizations develop ideological views that resemble those of the
elites. They at some point may come to their defense because it facilitates their integration into
the existing structures of domination.46
Additionally, criminal organizations have participated in the suppression of left wing
politics and labor activism in Chicago. For instance, to prevent unionization during the 1920’s,
corporations such as Ford and General Motors kept private armies to terrorize sympathetic
Criminal organizations also played a role in running unions to gain access to their
treasuries, assure the compliance of workers, and to keep them from turning to the left through
Unions, and other political or economic regimes in Chicago, have heavily
relied on criminal organizations to suppress labour and maintain elite structures. They were
entangled to the extent that crime has become institutionalized, widely accepted, and to a degree
openly invited. The Capone mob in Chicago was one in league with the city’s business elite and
police force, and it played a large role in suppressing labour. Capone stated:
Listen,… don’t get the idea I’m one of those goddam radicals. Don’t get the idea I’m
knocking the American system…. My rackets are run strictly along American lines and
they are going to stay that way… This American system of ours, … call it Americanism,
call it Capitalism, call it what you like, gives to each and everyone of us a great
opportunity if we only seize it with both hands and make the most out of it.49
Essentially the state of Chicago acknowledged coexistence, one involving both a state authority
and a non-state authority. Al Capone regarded it a shared American system, coining the term
“Americanism;” a notion only prominent in liberal democracies. Louise Shelley recognized the
only states in history that were successful in suppressing organized crime as fascist and
communist, under Hitler in Nazi Germany and Stalin in the Soviet Union.50
criminal organizations tend to aspire states where elite alliances are possible. They are threatened
by counter-hegemonic groups such as socialist or communist political parties, and commonly
integrate themselves within the institution of dominance. In twentieth century Chicago, the crime
syndicate were deeply entangled, widely accepted, and acknowledged as a socio-economic elite.
Organized crime has been fervently involved in the apparatus of factory enforcement and
legislation. Some may say factory legislation acted as the first opportunity for societal
entanglement. The state in the early twentieth century had gradually increased its level of
intervention in the industrial sector; it stipulated the minimum standards of safety, welfare, and
health that factory-occupiers should observe.51
This intervention merely shifted the responsibility
of human interests to the employers and their own means of regulation. It subordinated human
interest to economic interests, and conclusively expedited criminal intervention in areas like
employee discipline. Crime was simply overlooked as a result, and in the early 1920’s Chicago’s
crime statistics were of record highs. The murders of record in Chicago numbered 330 annually;
there were 6,108 burglaries, 2912 robberies, and 4, 447 stolen automobiles. Additionally, the
cost of property loss from thieves of all sorts was in excess of twelve million dollars.52
statistics resulted in state action, but not effective action. The Chicago Crime Commission came
into being, and was not so vigilant in their operations; they did not function as an institution
preventing crime, they rather functioned as a watchtower.53
They were merely an auditing body,
an institution in place to please worried citizens.
These criminal institutions were undoubtedly state-sanctioned. The actions of Al Capone,
one of the most prominent and well-recognized criminals in history, were in fact state-
sanctioned. The actions contributing to his prominence have commonly depended on the
selective dissemination of federal agency records, predominantly the records of the Internal
Until this day, the IRS records on the Capone organization’s tax evasion
convictions remain inaccessible.55
Prolonged scarcity further perpetuates support for a state-
sanctioned crime syndicate in the early twentieth century.
Organized crime is state sanctioned mainly because of its upbringings. Drawing back to
the ethnic succession model of social mobility, the most prominent criminal institutions in
twentieth century Chicago began as neighborhood street gangs. One of the largest New York
City gangs for example was the “Paul Kelly Political Association,” also known as the “Five
Points Gang.” Kelly helped raise Chicago’s future crime lords such as John Torrio, Charles
“Lucky” Luciano, and Al Capone.56
The Paul Kelly Political Association began as a
neighborhood movement, one appealing to those in both the political and economic
communities. Moreover, it as an institution grew to become a symbiotic crime syndicate.
One important disposition that can be made is that organized crime is solely an American
Institution. In fact, of the 25 organized crime “leaders” reputed by the law enforcement agencies
in the United States 12 were identified as born American, the other 13 were of Russian or Italian
descent but resided in America.57
According to Daniel Bell, “Americans have had an
extraordinary talent for compromise in politics and extremism in morality.”58
He explained that
from the start America was a frontier community, a state where shameless political and business
deals are accepted and “everything goes.”59
This frontier mentality perpetuated the business of
crime. Culturally accepted vices such as prostitution, liquor, and gambling have been
rationalized as a middle-class past time.
The strength of the criminal underworld in early twentieth century Chicago lay in the fact
that its members were simply not outsiders.60
As symbiotic institutions, their practices were
embedded within the city’s racial, political, and economic structures. Whether organized crime is
treated in the abstract or in the context of federal and state law enforcement policy, it is
important to note that there is a greater complexity to how it functions and influences society.61
As a political institution, they contributed to the violence and fear of violence that pervaded
many neighborhood ghettos. Some marginalized residents feared the police, and as a result,
turned to criminal organizations.62
As an economic institution, it facilitated discipline within the
factory. Al Capone as a leader of the Chicago crime syndicate was in league with both the
business and political elite, essentially assimilating into the city’s social system.
The concept of organized crime has always had strong ethnic associations. John
Landesco wrote about how their social composition was mainly based on their ethnic origins.
Whether Irish, Jewish, Italian, Black, or Polish, specific areas of the city were controlled.63
immigrant or marginalized youth within neighborhood communities were forced into the world
of crime, and conclusively where they were to reside. The criminal world spread so widely
throughout the society. Police and government officials, such as the neighborhood politician
were their only form of direct contact and possible solution to the crime problem.64
prohibition, neighborhood complaints were second to the access of liquor and other concessions.
They were able to enforce citywide rules throughout urbanized neighborhoods. John Torrio
organized a citywide syndicate for the operation of breweries and the convoy of trucks.
Additionally, the two Thompson administrations were in favour of this rule.65
administrations, Dever a reform democrat was elected, and he did not believe in prohibition; his
policy was to prosecute the leaders of these crime syndicates.66
However, the lasting corruption
of both the political and economic structures of Chicago before his inauguration did not help his
Since the mid nineteenth century and the early twentieth century, Chicago has been
influenced by the prominence of organized crime. From the neighborhood in its predatory stage
to political and economic institutions in its symbiotic stage, organized crime has played a crucial
role in reshaping Chicago’s culture. It has embedded itself, and matured into a system of demand
for illicit goods and services, rather than fear; a system of opportunity rather than deprivation;
and a system of economic growth rather than decline. It’s ability to provide illicit goods and
services were not only the bedrock of criminal prominence, but also bedrock of Chicago’s
development as a whole.
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