representative from New Jersey. The council would be a regionalrnbody, intended to keep the peace in the New York-NewrnJersey area. Nationally, there would be a “Commission” composedrnof members from the major “families” around the country,rnand while the Commission would refrain from interferencernin local families’ businesses, no one could be executed withoutrnits approval. Moreover, Luciano ordered that no more membersrnwould be inducted into the secret society of Sicilians thatrnhad dominated the business until that time. Non-Italians andrnnon-Sicilians could not actually be members of the Commission,rnbut Luciano was opposed to continuing the Italian-Sicilianrnmonopoly of power. He explicitly wanted to end the ethnicrnhomogeneity of the organization, in part to allow room for himselfrnand his allies and in part to place a limit on the expansionrnof the remaining Italian-Sicilian families. By forbidding futurerninductions and also prohibiting expansion of the families withoutrnapproval by the Commission, Luciano ensured that no rivalrngangs could gain enough muscle to challenge his own power.rnThe organization that Luciano established was at least asrnmuch the creation of his ally, Lansky, as it was his own. In ThernLast Testament of Lucky Luciano , a memoir he dictated in hisrnlast years to Martin Gosch and Richard Hammer, Luciano acknowledgesrnthat it was L.ansky who grasped the realities of powerrnfor both the emerging Mob as well as for the emerging corporaternpower structure in the legitimate societ-. He recountsrnhow Lansky, whom he had known since grade school, oncernread him a passage from a book entitled Making Profits byrneconomist William Taussig of Harvard. “This writer,” Lanskyrnexplained to the virtually illiterate Luciano, “talks about a thingrncalled the law of supply and demand. Wliat he says applies tornus right now. If you have a lot of what people want and can’trnget, then you can supply the demand and shovel in the dough.rnIn other words, that’s what we ought to do with whiskey—getrnplent)’ of it, good, uncut stuff right off the boat and then sell it atrna high price to a bunch of people who don’t have brainsrnenough not to drink it.” Luciano was immediately seized withrnthe brilliance of Lansky’s elementary economic insight, whichrncame to be called “Lansky’s Law” among their associates.rnWhen Luciano went to prison in 1936, it was Lansky whorntook charge of his personal finances and soon those of otherrnleading gangsters. Lansky also began to move into Cuba and,rnthrough his friend Siegel, Los Angeles and Las Vegas, whichrnSiegel virtually created. (Contrary to the movie version in WarrenrnBeatty’s Bugs)’, Lansky, according to Luciano’s testament,rndid not plead with the Commission not to execute Siegel afterrnhe committed the costly blunder of opening the first casinos inrnLas Vegas right after Christmas, but actually took the lead inrnurging the Commission to authorize his execution.) Yet despiternhis leading role in the creation of the modern crime corporation,rnLansky was virtually unknown to the public until thern1970’s (unlike flashy hoods like Luciano and Capone, he wasrncareful to keep his own name out of the tabloids), and thoughrnhis mastery of financial and managerial details kept the cartel inrnbusiness long after Luciano, Genovese, Frank Costello, and AlbertrnAnastasia had vanished, he was never a voting member ofrnthe Commission. As a Jew, he was ineligible for formal membership,rnand he reportedly always had to sit outside while thernCommission was in formal session.rnYet the distinctive feature of the new crime cartel that Lucianornand Lansky created was not only its ethnic diversity butrnalso its emulation, conscious or not, of the emerging corporationsrnin its organizational strategies. “Luciano,” writes GayrnTalese, “urged that mafiosi no longer seek power throughrnthreats and vendettas, but instead adopt the more subtly aggressiverntactics of large modern corporations, some of which hadrnbeen founded by robber barons but were quietly committed tornprofiteering within a free-enterprise code of rules and restrictions.”rnWhat was emerging as the prevalent form of American organizedrncrime, thanks to Luciano and Lansky, was the dominationrnof foxes over lions, of cunning, manipulation, and organizationrnover force and the ethnic-social solidarity on which thernearlier gangs were based. It was a transition exactly parallel tornthe changes taking place in American business and society. Asrneach sector, the criminal and the legal, expanded the scope andrnsophistication of its operations, the older forms of organization,rndiscipline, and bonding ceased to work. The older forms werernthe products of traditional societies of comparatively smallrnscale, few members, limited resources, and community-rootedrnleadership. The gangs of Masseria’s day and before could easilyrnextort protection money from local businesses and shopkeepers,rnbeat up or kill traitors, enemies, and rivals, and run smalltimerngambling and prostihition rackets in their neighborhoods,rnjust as law-abiding businessmen could produce and distributerntheir own goods and services throughout the local markets ofrntheir home bases.rnBut just as the corporations that were expanding their ownrnbusinesses throughout the world by manufacturing and distributingrngoods through advanced technologies were unable tornretain earlier owner-operator forms of organization and just asrnthose corporations had undergone processes of internal bureaucratization,rnso the corporation of organized crime also hadrnto modernize. Luciano and Lansky could not expect to fulfillrnLansk)’s Law with respect to bootleg liquor by relying on thernMustache Petes and their limited skills, methods, and men.rnThey had to mobilize the cash to buy the ingredients of bootlegrnwhiskey and beer abroad (in Cuba or Canada), organize itsrnmanufactiire outside the United States, pay the overhead costsrnof production and transportation, distiibute it throughout thernareas under their control, and at the same time provide theirrnown protection and securit)-. Similarly with the nmnbers racket,rnpioneered by Lansky and Schultz in New York and imitatedrnby A] Capone in Chicago. The numbers required a vast streetrnorganization that collected the bets, counted the money, paidrnthe winners, and protected the whole apparatus from both thernpolice (through payoffs) and competitors (through muscle).rnThe same was true of drug peddling (initiated by Lansky andrnGenovese and opposed by Luciano, according to himself).rnAnd to run these tiansnational operations required more specializedrnskills than a neighborhood paisan was likely to possess.rnIn short, the new crime syndicate needed managers.rnThere are obvious limits to how far the process of managerializationrncan be applied to criminal enterprises. Criminals,rnas noted, have to provide their own security and enforcement.rnThey can’t take violators of contracts to court; insteadrnthey take them on the long ride. The need to supply its own enforcementrnlimits the number of “foxes” who can take part in organizedrncrime. Unless the managerial criminal is as preparedrnto execute and terrorize tiaitors, competitors, and reluctant underlingsrnas he is to rely on organizational planning, legal tiicks,rnand financial gimmicks, he won’t last. Moreover, the codes ofrnsilence and loyalty that successful crime demands means thatrnthose drawn into its secret empire and especially those who sur-rn16/CHRONICLESrnrnrn