the.com/protection racket
A business model where the threat and the solution share the same owner.
means A scheme in which someone demands payment to protect you from harm that they themselves will cause if you don't pay.
from From 'protection,' used ironically since early 20th-century American organized crime, and 'racket,' underworld slang for an illegal moneymaking scheme — itself possibly linked to the noise ('racket') criminal operations caused, or to the general clamor of dishonest hustle. Gangsters in Prohibition-era cities literally sold shopkeepers safety from vandalism and violence that the gangsters themselves would otherwise inflict — turning the word 'protection' inside out.
- origin
- 1920s American gangs, formalized by Al Capone
- core trick
- you create the danger you charge to prevent
- modern form
- applies to insurers, platforms, even governments
- tell
- the price goes up right after you refuse