A protection racket is an extortion scheme whereby a criminal group or individual coerces a victim (usually a business) to pay money, supposedly for protection services against violence or property damage. Racketeers coerce reticent potential victims into buying "protection" by demonstrating what will happen if they don't—they damage the victims' property. In most cases, the racketeers do not actually protect their client from anything but the racketeers themselves, and their "protection" is merely extortion. However, if their victim is seriously threatened by a third party, sometimes gangsters will protect their source of revenue.
Legitimate businesses are not the only victims of protection racketeers. Other criminals are also targeted, since they cannot ask police to stop the extortion. However, for that same reason, criminals sometimes actively seek to buy this "protection". Paradoxically, in a parasitic relationship, the parasite both damages the host and prefers that the host remain healthy. Thus, when criminals are cheated or abused (e.g., a cocaine dealer is swindled by his supplier) they cannot turn to the police and instead rely on powerful gangsters to protect the gangsters' income.
The person who periodically visits the victim to collect protection payments is called a "bag man".
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A protection racketeer cannot tolerate competition within his sphere of influence from another racketeer. If a dispute erupted between two clients (e.g. businessmen competing for a construction contract) who are protected by rival racketeers, the two racketeers would have to fight each other to win the dispute for their respective clients. The outcomes of such fights can be unpredictable, and neither racketeer would be able to guarantee a victory for his client. This would make their protection unreliable and of little value; their clients would likely dismiss them and settle the dispute by other means. Therefore, racketeers negotiate territories in which they can monopolize the use of violence in settling disputes.[1] These territories may be geographical, or they may be a certain type of business or form of transaction.
Sometimes racketeers will warn other criminals that the client is under their protection and that they will punish anyone who harms the client. Services that the racketeers may offer may include the recovery of stolen property or punishing vandals. The racketeers may even advance the interests of the client, such as muscling out unprotected competitors.[2]
Protection from theft and vandalism is one service the racketeer may offer. For instance, in Sicily, mafiosi know all the thieves and fences in their territory, and can track down stolen goods and punish thieves who dare to attack their clients.
Protection racketeers establish what they hope will be indefinitely long bonds with their clients. This allows the racketeers to publicly declare a client to be under their protection. Thus, thieves and other predators will have little confusion as to who is and isn't protected.
Protection racketeers are not necessarily criminals. In "A Short History of Progress," Ronald Wright notes on p.49, "The warrior caste, supposedly society's protectors, often become protection racketeers. In times of war or crisis, power is easily stolen from the many by the few on a promise of security. The more elusive or imaginary the foe, the better for manufacturing consent."
The term has been expanded by feminists to refer to men who 'rescue' women by insisting on protecting them from dangerous strangers when it is actually the so-called protector who will turn on the woman who rejects his protection and deprives him of his excuse for violence. Susan Griffin was one of the first feminists to put this into words, in her 1971 article in Ramparts. More recently, Ellen Goodman opined that this analogy can be extended to George W. Bush, where preemptive violence provokes blowback that tends to affect women and children most.[3] Susan Faludi goes into more detail in her most recent book, "The Terror Dream."