Unfettered capitalism: on rackets, cronies and mafiosi

Abstract In the early 1940s, critical theory borrowed the term racket from the urban crime underworld and applied it to criticize monopoly capitalism, which was regarded as a constellation ruled in a mafia-like manner. Decades later, after the experiences of the welfare state in the core counties and catch-up modernizations in the periphery, concepts such as cronyism and mafioso state were proposed. What these three approaches have in common is the fact that they highlight the mafia-like nature of capitalism and do so for different social and historical contexts. This article suggests that rackets, cronies or mafias have more recently, and increasingly, become structural elements of capitalism, as was first envisaged by critical theory during World War II. We combine theoretical critique and insights with references to empirical expressions of this phenomenon to shed light on this development.