Ilya Somin offers a libertarian analysis of The Godfather. An excerpt:
One of the recurring themes of the novel is that people turn to the Mafia for help because of the corrupt and self-serving nature of many political and legal institutions that systematically allowed elites to plunder the politically weak. Puzo recognized, as sociologist Diego Gambetta explained more systematically, that the Sicilian Mafia flourished because it provided better "protection" against crime and violations of property and contract rights than did the official authorities, who generally protected only the politically powerful elite. To a lesser extent, a similar dynamic enabled the America Mafia to emerge in Italian immigrant communities in the early 1900s, as Puzo vividly portrayed in his chapter on the rise of Don Corleone.
I'm surprised there isn't more libertarian scholarship about the mafia. In different times and places it offers case studies both in private alternatives to the state and the formation of an unpleasant new state, or proto-state. And of course, as Somin notes, the mob offers plenty of evidence that "Prohibition, laws banning gambling, the War on Drugs, and other legislation that creates black markets stimulates criminal violence."
Somin links to Diego Gambetta's book The Sicilian Mafia: The Business of Private Protection. I haven't read that one, but I have read, and recommend, Gambetta's paper "Mafia: The Price of Distrust" [pdf]. And if you can get past his Leninist biases, Eric Hobsbawm has an interesting historical discussion of the Sicilian and other mafias in Primitive Rebels.
Update: Hit & Run regular "highnumber" calls my attention to a paper [pdf] by Oriana Bandiera called "Competing for Protection: Land Fragmentation and the Rise of the Sicilian Mafia." Looks interesting.
Another reader, with the more plausible name David Gross, takes the idea of the mob as a proto-state and runs with it, pointing me to a newspaper story about, as he puts it, "tax resistance against the Italian Mafia."
Finally, some readers have mistaken this post for an endorsement of the mafia. Do I really have to spell out that I don't approve of breaking people's thumbs? The fact that the mafia has sometimes acted as a private alternative to the state doesn't change the fact that at other times it acts like a particularly nasty state itself, claiming a monopoly over a specific territory and enforcing its authority with brutal violence. The scholarship I'm calling for would look at both of those aspects of the issue. It could also examine the interpenetration of the mafia and the state, as mobsters carry out covert tasks for the government and as officials are corrupted by various mobs. I'm sure there are other libertarian angles as well.