Note: Dan Gardner is a Citizen senior writer.

Everyone remembers the tale of Al Capone, the ruthless gangster who ruled
Chicago in the 1920s. A courageous G-man named Eliot Ness formed "the
Untouchables," a tough and incorruptible team that smashed the mobster's
rackets one by one. Then, in an ingenious move, Internal Revenue Service
accountants nailed Capone for tax evasion and sent him to the Big House for
11 years. Law and order were restored. Children laughed in the sunny streets
of Chicago, the music played and the credits rolled.

At least that's how we remember the story thanks to the old television show
and far too many movies. Sadly, little about this story is true. Even more
unfortunately, the Capone myth continues to be the model for our thinking
about organized crime and how we should deal with today's chopper-riding
gangsters, the Hells Angels.

An extensive, multi-part investigative series published in The Globe and
Mail revealed that the Angels are violent cocaine traffickers with deep
roots in Ontario and across the country. Who knew? Apparently not the
Globe's editorial writers, who penned a shocked and appalled editorial
calling for -- wait for it -- tougher laws and a crackdown. Maybe Kevin
Costner and Sean Connery will reprise their roles.

Really, I don't want to mock the Globe. I'm sure most Canadians would agree
that the solution to gangsterism is more cops and laws because that's the Al
Capone story. Send in Eliot Ness and get the accountants to follow the
money. That's what took down Scarface and it can do the same to these punks.
After all, this is what the police constantly tell us. Just give us more
money and power, they say.

What the police don't say, however, is that we've been giving them more
money and power for years and although they've been stuffing the prisons
with bad guys, there are lots more bad guys running around on our streets.
There's a reason for that. It's the same reason why much of the story of Al
Capone as we know it is false.

"Capone neither 'ran' Chicago nor the Chicago rackets," writes historian
Michael Woodiwiss in Organized Crime and American Power. That's because,
like most organized crime, the so-called Capone gang was not the formal,
hierarchical organization we imagine when we think of organized crime. It
was instead a loose, decentralized system of alliances and business
relationships.

Capone's bootlegging, gambling and prostitution operations "were not
controlled bureaucratically," writes historian Mark Haller. "Each, instead,
was a separate enterprise of small or relatively small scale. Most had
managers who were also partners. Co-ordination was possible because the
senior partners, with an interest in each of the enterprises, exerted
influence across a range of activities."

At this point, the reader may be nodding off. Organizational structure? Who
but an MBA could possibly care? It's a lot more thrilling to talk about gin
joints, Tommy guns and takedowns. But as it turns out -- MBAs will be
delighted to hear -- organizational structure was critical to the Capone
story. The loose associations of the Chicago underworld formed a resilient,
multi-dimensional web in which any man could easily be replaced. Not even
the great Al Capone was essential. "Capone's removal as a criminal force in
Chicago made no difference to the extent of the illegal enterprise in the
city," writes Mr. Woodiwiss.

Now, if Capone's organizational structure were unique to 1920s Chicago, none
of this would be terribly relevant. But as it turns out, decentralization is
the rule in organized crime. The reason for this is almost Darwinian: Formal
hierarchies collapse if key figures at the top are taken out, whereas
decentralized networks shift and adapt when someone is killed or imprisoned.
The Colombian cocaine trade is a perfect illustration, having moved in 30
years from domination by Pablo Escobar and the Medellin cartel to a complex
array of tiny, loosely affiliated groups.

The same evolutionary forces were at work here in Canada, when Quebec Hells
Angels leader Maurice "Mom" Boucher launched a war to monopolize the drug
trade and make himself lord of the underworld. Bikers died by the score and
most of the survivors are in prison, including "Mom." As the gangsters say
in hard-boiled novels: not smart. The Ontario Angels have learned the lesson
and they run a decentralized system of alliances and relationships that Al
Capone would certainly recognize.

Capone would also recognize the Angels' main money-makers: drugs,
prostitution and, to a lesser extent, illegal gambling. Whether it's 1920s
Chicago or Ontario in the new millennium, organized crime exists mainly to
satisfy black markets. True, gangsters also engage in extortion, fraud and
theft. But the really big money is, and always has been, in supplying
forbidden goods and services. Capone always insisted he was "just a
businessman" and he was right. Organized crime is a business. It happens to
be an illegal business in which disputes are settled with uglier means than
lawsuits, but it is still a business.

Gangsters might break criminal laws, but they have to obey economic laws,
including the fundamental law that demand creates supply. They sell only
what people want and cannot get legally. Jail them and someone else takes
over. There's always someone else because black markets are, almost by
definition, fantastically profitable, and nothing motivates human beings
like fantastic profit.

That is demand creating supply. Even more than decentralized organization,
it is the reason why, when the Feds took down Al Capone, nobody went thirsty
in Chicago. It's also why, even with "Mom" Boucher locked away, Montrealers
have no problem finding a line to toot or a fatty to spark. And it's why
giving the police in Ontario more money and power may fill the prisons with
Hells Angels, but it won't touch the underlying criminality.

To do that, we have to accept that organized crime is an economic problem
and look for an economic solution.

In 1933, Chicago hit upon such a solution. It didn't involve the police. It
had nothing to do with accountants. And yet it wiped out the black market in
alcohol and put an end to the glory days of the gangsters. It was the repeal
of Prohibition.

Most Canadians may not be prepared for such radical stuff but the inevitable
failure of cops-and-crackdowns approach will give them plenty of time to
contemplate alternatives.

E-mail: dgardner@thecitizen.canwest.com