Organized Crime: Russian Mafia Vs. Italian Mafia Essay Example For College

Russian Mafia vs Italian Mafia: Introduction

Organized crime groups exist in many countries, but the most powerful groups are Russian and Italian mafia. There is a great difference between origins and predispositions of the Italian and Russian organized crime groups. The Russian mafia was influenced by political and economic changes, break down of the USSR and the wave of privatization. In contrast, the Italian mafia first occurred as a recognizable phenomenon toward the end of the eighteenth century throughout southern Italy.

Perhaps the best way to acquire “a feel” for it (for that is all we can hope for) is to imagine it developing as a force of reaction against the intensified abuses of a moribund feudalism. To be sure, there were many instances in which the mafia was an instrument, not against, but in the hands of, the feudal nobility. But that merely reveals something about the mutability of human phenomena and the corruptibility of human ideals (Paoli 2003, p. 133).

Italian Mafia vs Russian Mafia: Comparison

The mafia probably had its roots in the absolute necessity of the southern Italian masses to defend their families, their honor, their source of livelihood, and their very life at a time when those who possessed secular and ecclesiastical authority were renouncing all obligations of law and order to the people while at the same time robbing them of whatever land they possessed, molesting their wives and daughters, imposing intolerable taxation, and inflicting all manner of moral as well as corporal punishments. Originally, the mafia consisted of little more than scattered little groups of peasants, often outlaws, who found in each other’s strength and resolve the basis of a new moral and social order (Paoli 2003, p. 55).

The main similarity between Russian and Italian mafia is a strict code of conduct and behavior. “There is a traditional code of conduct within this old style of organized crime in Russia called “Vory v Zakone,” or thieves in law. The members are bound by 18 codes and if they are broken, the transgression is punishable by death” (Organization and Structure n.d.). In Italy, one finds in many a village a sacra famiglia (sacred family), an organization of local young men whose express purpose is to defend the “honor and property” of the community in general and of their own families in particular.

The organization, sometimes termed Umiltà (Humility), has elaborate hierarchies of offices and functions, colorful ceremonies and rituals, and a language in which terms like “honor,” “blood,” “family,” “man,” and “wisdom” have a very special significance. So noble are the official intentions of the sacra famiglia, and so religious the members’ conception of its function within the local scheme of things, that when a new member is installed in the organization, after a full six months of being in bello (under scrutiny), the chief tells him, “From this moment on, you are not a mere member of the mob [the populace] but a man healthy, wise, and holy” (Finckenauer and Waring 2001, p. 23).

Proliferation and activities of both crime groups reveal how a corrupt individual can rise to the top of the power hierarchy and, aided by a small group of lieutenants, use the organization to commit under the protection of secrecy those very wrongs that it was supposedly established to prevent (Finckenauer and Waring 2001, p. 204).

Thefts, acts of terrorism against the weak, and abuses against helpless women are the specialty of the mafiosi. Sometimes, after a period of control, the leader becomes isolated by his own abuses and leaves the scene–usually either because he lands in jail or because he is slain. His followers disband, and a group of young men, eager for fun, new experience, power, and the highest kind of honor that can befall a peasant among his peers. The main difference between Russian and Italian mafia is that Italian mafia uses murders and thefts as the main methods of violence. The Russian mafia groups use extortion, credit card fraud, murder, kidnap, and fuel frauds (Friedman 2000, p. 160-161).

It is probably neither common nor healthy for men to endlessly crave admission into groups that are persistently closed to them. The deeply ingrained need for social approbation and the need for self-respect are too closely tied together, to allow a man to continue a pursuit that yields continuous self-degradation (Paoli 2003, p. 45-46). Chances are that, after trying and failing for a time, the individual will turn to a group that readily grants him social approval and a healthy self-image.

The basic meaning in the tale of the fox and the sour grapes reaches the heart of a human universal. There is no clear-cut evidence that the gang is a school for socialization in the world of crime. “The kind of obedience low-ranking members have to show removes their sense of responsibility for these crimes, which is further negated by some other ad hoc measures” (Paoli 2003, p. 77).

Little is known about inter-organizational connections between communities, although there is little doubt that some ties exist. As a rough generalization, it may be stated that the degree of inter-organizational contact is in direct proportion to the volume and economic significance of the local organizations’ activities (Finckenauer, and Waring 2001, p. 207).

When, as in the Palermo area in Sicily, a number of local mafia-like organizations flourish and seek to extend their area of activity and influence, inter-organizational clashes are likely to develop. These conflicts are never fully eliminated, but the clashes invariably generate attempts at reconciliation. And from this flows the sort of phenomenon known as mafia (Paoli 2003, p. 53; Italian Crime Groups 1995).

Some basic techniques of organization of the American mafia came from Sicily. The Russian and Italian mafia’s success and growth, however, were unquestionably fostered by conditions arising from the monumental political error that was Prohibition, by the betrayal experienced when high ideals of democracy were rendered a sham by egoism and hypocrisy, by the festering sore that was the padrone system, by the corruptibility of self-seeking officials–both private and public-and by the pathetic fears and helplessness of the early immigrants (Friedman 2000, p. 149).

In both crime groups, the success depends on an operation called the “fix,” a working arrangement with key police, elected officials, and business and union executives. Most of the time it involves a simple money pay-off from the mob in return for favors received. Since the “bought” person must be in a position of power or authority in order to deliver his favors, “the cardinal principle of the fix is immutable–i.e., be with winners. Politically, this is conducive to bipartisanship” (Friedman 2000, p.148).

Examples of fixes range from one-million-dollar bribes to small pay-offs to officials for such favors as “the passing along of information that comes over their desks” and warning the organization of possible official action against it (Organization and Structure n.d.).

Operating through and acquiring legitimate businesses is attracting increasing attention among the mafiosi in their search for profits. This trend represents a distinct move on the part of these twentieth-century “robber barons” toward legitimacy. The development suggests that since the big mafia chiefs are of Italian extraction, fifty years or so hence there are likely to be a great many peers of the Rockefellers, Morgans, Mellons, and the like having names that end in a vowel or claiming ancestors among those who had such names (Paoli 2003, p. 56).

No disrespect is meant for the “big families” of today. But money, like wine, does have a way of growing old and sublime. It is even possible that rarely if ever can great wealth be achieved without intrigue and scandal, without twisting the spirit and the arm of the law. The biographies and autobiographies of those who are suggestively called “robber barons,” together with reports about their business deals, will reveal to the curious citizen the extent to which they took, by hook or by crook, from the little man, the petty businessman, the government, and the soldier dying at the front for liberty, democracy, and “free enterprise.” (Paoli 2003, p. 141; Friedman 2000, p. 115-116). There are many ways of breaking the law.

Much of the history of America’s “big families” is a history of “war-profits conspiracies,” airplane scandals, charges of defrauding government on war contracts, attorney generals acting as “fixers” for the wealthy, the Teapot Dome scandal, the Shipping Board scandal, price-fixing scandals, oil and land “grabs,” airmail contracts collusively obtained, and so forth in an endless list of “free enterprise” deals. The Russian groups follow the same way in America: they “get into the legitimate gambling business and the hotel business in Las Vegas.” These legal and quasi-legal operations were much harder for law enforcement to crack” (Friedman 2000, p. 185).

Russian vs Italian Mafia: Conclusion

An idea of the grabbing, the intrigues, and the law of might that prevailed is given by Hollywood’s recurrent theme of the land-grabbing scoundrel. In the movies the thief and his hired straw-chewing, blackjacketed gunslinger always lose out in the end to the “lawabiding”, courageous, redeeming hero (Friedman 2000, p. 175).

It is possible that the desire for power and wealth is nowhere and at no time innocent of the will to use all means necessary for their achievement. On the other hand, criminal innovation is condoned by a tendency among American people to tolerate, indeed admire and esteem, successful scoundrels and knaves. What is even more interesting is that the association between crime and politics is not due solely to the fact that both are power phenomena. Alas, it would almost seem that there is a need for crime in politics.


  1. Finckenauer, J. O., Waring, E. J. (2001). The Russian Mafia In America: Immigration, Culture, and Crime. Northeastern.
  2. Italian Crime Groups (1995). Web.
  3. Organization and Structure. (N.d.) Web.
  4. Friedman, R. J. (2000). Red Mafiya: How the Russian Mob Has Invaded America. Little, Brown and Company.
  5. Paoli, L. (2003). Mafia Brotherhoods: Organized Crime, Italian Style. Oxford University Press.

Risk Management: International Financial Risks


A company going international will face or encounter risks that are different from those faced in the home country. The risks in International transactions include foreign exchange risks and political risks.

Foreign exchange involves things like currency shortages, depreciation, and increase of public debt or exchange rate fluctuations. Proper strategies should be adopted to cover this risk. If the risk is not well covered, it will affect the cash inflows and outflows and eventually profitability or even operations of an enterprise. Strategies adapted can be Strategic actions, operational tactics, and financial tactics.

Several instruments are used to cover this risk, although not available in all markets. Their availability in the market depends solely on the development of the economy in question, that is, financial infrastructure and services offered by the banks operating within it. Therefore, a risk management strategy requires one to be effective, have a good understanding of financial instruments and, above all, in emerging issues in the economy where you are investing. It is important to access these risks thoroughly, identifying the potential risks and assessing the strategy available to reduce them.

Exchange rates are influenced by several factors, including inflation rates, income levels, interest rates, government policies, expectations of economic events or changes, natural disasters or events and the effects of currencies fluctuations can have impacts at different levels.

Techniques for covering risk

  1. The balances to both intra-group and third party are matched. The companies match the inflows and outflows in different currencies covered by the business so that it is only necessary to deal on the currency markets for the unmatched proportion of the total transactions. It ensures that purchases and sales in each currency and deposits, given and taken in each currency, are in balance by the amount and by maturity.
  2. Leads and Lags: the acceleration or slowing payments or receipts when a change in currency rates is expected
  3. Invoicing currency: importers and exporters of goods and services charge in the currency at a favourable rate.
  4. Insurance: a company covers for a sudden change or total impasse in the availability of foreign currency on the maturity date.
  5. Futures: is a contract based on an order placed in advance to buy or sell an asset or commodity. The price will be fixed when the order is placed, but payment for the asset is not required until the delivery date. In this case, the buyer puts aside some cash as a form of assurance that he will pay or have the ability to pay when the time comes.
  6. Spot foreign exchange is a binding obligation to buy or sell a certain amount of currency at the current market rate for settlement in two business days
  7. Option is the right to purchase or to sell a certain asset at a preset price on or before a specified date.
  8. Swap is an agreement exchange specified assets or cash flows at fixed intervals, with the terms initially set so that its present value is zero
  9. Netting: involves associated companies that trade with each other and refers to potential flows within the group of companies. The companies calculate the total exposure by offsetting the receivables and payables, in the same currency, for the same dates

From the techniques discussed, the company will use almost all of the above since Australia has an active foreign exchange market.

Political risks

Some countries may experience major political instability, which could result in defaults on payments, exchange transfer blockages, nationalization or confiscation of property. The civil disorder may affect personal security. Unlike third world countries, Australia is a country with predictable political risks. There are very few political risks.

Foreign exchange settlement in Australia

In Australia, banks local and all foreign banks have decentralized their foreign exchange. However, some of the foreign banks have centralized foreign exchange settlement processes at their head offices, and therefore it takes a long period to settle the transaction. In such cases, the full financial and legal liability for foreign exchange settlement risk lies outside Australia, and most of these banks’ foreign exchange settlement risk was covered survey by G-10and reserve bank of Australia

Risk being anything that threatens or limits the ability of a business to achieve its goal and objectives. Risk management is a process of thinking systematically about all possible undesirable outcomes before they happen and setting up procedures that will avoid them, minimize or cope with their impact. The in question should therefore plan how to cope with the discussed risks above.


Bachman, Daniel. 1992. “The Effect of Political Risk on the Forward Exchange Bias: The Case of Elections.” Journal of International Money and Finance 11:208-19.

Baillie, Richard T. and Patrick C. McMahon. 1989. The Foreign Exchange Market: Theory andEconometric Evidence. New York: Cambridge University Press.

Bernhard, William and David Leblang. 1998. “Political Uncertainty and Exchange Rate Volatility in Parliamentary Democracies.” Paper presented at the 1998 Meeting of the American Political Science Association, Boston, MA.

Christodoulakis, Nicos and Sarantis Kalyvitis. 1997. “Efficiency Testing Revisited: A Foreign Exchange Market with Bayesian Learning.” Journal of International Money and Finance16:367-85.

Fama, Eugene. 1984. “Forward and Spot Exchange Rates.” Journal of Monetary Economics 14:319-338.

Frederick S Choi; International Finance and Accounting Handbook; Wiley, 3003

Freeman, John R., Jude C. Hayes and Helmut Stix. 1999. “Democracy and Markets: The Case of Exchange Rates.” Manuscript, University of Minnesota: Department of Political Science.

Garrett, Geoffrey. 1995. “Capital Mobility, Trade, and the Domestic Politics of Economic Policy.” International Organization 49(4):657-6

G. Poitras; Risk Management; Elsevier, 2002

Hallwood, C. Paul and Ronald MacDonald. 1994. International Money and Finance, Second Edition. Oxford: Basil Blackwell.

Hills, B. and D. Rule: “Counterparty credit risk in wholesale payment and settlement systems”. Financial Stability Review, no. 7, Bank of England,1999.

Hodrick, Robert. J. 1987. The Empirical Evidence on the Efficiency of Forward and Futures Foreign Exchange Markets. London: Harwood Academic Publishers.

Lewis, Karen. 1995. “Puzzles in International Financial Markets.” In G. Grossman and K.Rogoff (eds.), Handbook of International Economics, Volume III. Elsevier Science

MacDonald, Ronald and M. P. Taylor. 1991. “Testing Efficiency in the Interwar Foreign Exchange Market: A Multiple Time Series Approach.” Weltwirschaftliches Archiv 127:500-523.

Mundell, R. 1961. “A Theory of Optimal Currency Areas.” American Economic Review 51:509

Peter Christofferson; Elements of Financial risk Management; Elsevier, 2003.

Peter C..Padoan P. C.; (2003) the Structural Foundations of International Finance; Edward E Pub.

Reserve Bank of Australia (1999): Reducing Foreign Exchange Settlement Risk in Australia . A Progress Report.

Reserve Bank of Australia (1997):Foreign Exchange Settlement Practices in Australia .

R. Luecke; Finance For Managers; Harvard Business School Press; 2002

Rolle, Richard and Shu Yan. 1998. “An Explanation of the Forward Premium ‘Puzzle.’” Manuscript, Los Angeles: The Anderson School at UCLA.

S. Carlson; International Financial Decisions; North Holland Pub; 1969.

The Abolition Of Capital Punishment In Canada

They believe in the notion that capital punishment is a cruel act and it does not allow the rule of law to implement execution, which is what most Europeans perceive. Often people put the onus on the shoulders of ‘Capital punishment’ to execute innocent individuals. However, what they don’t realize is the fact that banning execution is one thing and executing innocent individuals is another. Capital punishment is the death sentence of ‘hanging’ or ‘executing’ the culprit, not the innocent. If for some reason, the culprit has been set on the loose and the innocent is sentenced, this is the injustice done on behalf of the court or judge. In such a situation where an innocent is wrongfully proved to be a criminal, then this situation represents the feeble implementation of law and order in the country. It has nothing to do with the law of capital punishment, which has been in a continuous process of ‘reintroduction’ and ‘abolishment.’ This clearly presents that rule of law acts as a ‘toy’ in the hands of that nation.

Being a defender of capital punishment, I would categorize myself as a ‘retributivist.1’ because in order to build up a disciplined society, death punishments are justified. (Sunstein & Vermeule, 2005) Unlike ‘consequentialists’ who believe the death penalty is an unobligatory concern, there is a concern for defenders and offenders of capital punishments, and the concern simply requires the defender to put themselves in the shoe of the victim’s close ones.

Ban the death penalty on the basis of fears of wrongful convictions or on the issue of ‘human rights’ have failed to decrease the homicidal crime rate in European nations, particularly in Canada. According to the facts, the overall homicide rate in Canada increased by 12% in 2004 (The Daily, 2004), while in 2005, the homicide rate went up to 20%. Though the homicidal statistics show a 10% decrease in 2006 and 2007, one cannot ignore the fact that up till now, in Canada alone, Capital punishment has been reintroduced and abolished several times.

All the above statistics clearly elucidates the failure of the death penalty elimination in 1976, which was completely implemented in 1998. Since then, the traditional method of capital punishment, i.e., ‘hanging’ is not followed at all. However, from 1998 to 2007, the Canadians have been voted many times in favor of and against execution.

Soon after the increasing crime rate in Canada due to the failure of reintroducing capital punishment in 1987, the public realized the need of reintroducing capital punishment. So, when in June 1995, a national poll was conducted, 69% of Canadians favored the reintroduction of the death penalty (Warren Mark, 2005). This proved that violent crime could not be controlled by abolishing capital punishment introduced by letting loose the culprits. After all, it is the innocent victim who suffers and the culprit who conducts the crime. Since then, Capital punishment has been abolished several times, but every time the dramatic increase in crime rates reintroduces the punishment.

The religious aspect of capital punishment does not allow a state or a nation to abolish the death penalty, as it is the only means of maintaining peace, law, and order in the country. The bible and the Ten Commandments strictly define the death penalty as a model of self-defense and protection of the weak, according to which all are treated by fair means. All the religions of the world have prescribed execution or suggested the death penalty as a fair means to acquire justice for the murder.

Punishment serves as a dual purpose of enabling peace and harmony in a society. Firstly, the death of the culprit provides justice to the victim or, in case the victim is murdered, the victim’s family. Secondly, the ‘death penalty is the lesson for the rest of the criminals who are set free in society. At least the rest of the criminals would think twice before committing an offense. This would not only protect those citizens of the society who are seeking security and protection of their life and property but would also set a lesson for other homicidal planners. Death of the culprit is the best means of discouraging criminal’s aims and objectives.

Saudi Arabia and the Middle East is the best example of implementing capital or corporal punishment where per capita homicide rates are the lowest, i.e., 0.00397456 per 1,000 people. (Nation Master, Saudi Arabia) This clearly depicts the situation in which capital punishment is allowed.

Instead of keeping the criminals and homicidal in jails for decades, it is better to set a strict and ‘cruel’ rule of law so as to build a better nation free from criminal activities and homicides. For all those who favor ‘abolition’ of capital punishment, I pose one question. Consider yourself as a close relative of the victim, say, brother, father, or son. How would you seek justice? Would you like to see the homicidal let loose by the police, law, and society? Or would you prefer to choose ‘death’ for him the same way in which he murdered your loved one? Just think, and you would get the answer!


“A very Cardinal Dulles and His Critics: An Exchange on Capital Punishment” In: Magazine Title: First Things: A Monthly Journal of Religion and Public Life: (2001) p: 7.

Sunstein R. Cass & Vermeule Adrian, (2005) “Is Capital Punishment Morally Required? Acts, Omissions and Life-Life Tradeoffs” In: Stanford Law Review. Volume: 58. Issue: 3 p: 703+. Stanford Law School;

Nation Master, Saudi Arabia. Web.

The Daily, “Crime Statistics” (2004). Web.

Warren Mark, 2005. Web.


  1. Those who follow Immanuel Kant and believe that morality of death for a homicidal is required, rather necessary.

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