Exogenous Shocks, the Criminal Elite, and Increasing Gender Inequality in Chicago Organized Crime

Abstract

Criminal organizations, like legitimate organizations, adapt to shifts in markets, competition, regulations, and enforcement. Exogenous shocks can be consequential moments of power consolidation, resource hoarding, and inequality amplification in legitimate organizations, but especially in criminal organizations. This research examines how the exogenous shock of the U.S. prohibition of the production, transportation, and sale of alcohol in 1920 restructured power and inequality in Chicago organized crime. I analyze a unique relational database on organized crime from the early 1900s via a criminal network that tripled in size and centralized during Prohibition. Before Prohibition, Chicago organized crime was small, decentralized, and somewhat inclusive of women at the margins. However, during Prohibition, the organized crime network grew, consolidated the organizational elites, and left out the most vulnerable participants from the most profitable opportunities. This historical case illuminates how profits and organizational restructuring outside of (or in response to) regulatory environments can displace people at the margins.