On some level, I do believe blackmail is a kind of coercion, but I fear my structuralist explanations for this view would be deeply upsetting to the average libertarian Joe, so I will keep my dirty little Foucault-inspired secrets to myself.
Here is more from Alina Stefanescu.
And how about the economics of blackmail? If blackmail victims are bad guys, why not allow a horde of potential bounty hunters to profit from uncovering their wrongdoing? We can keep "false blackmail" illegal, while allowing blackmail based on truth, no? We likely underinvest in the gathering of such information, and the profit incentives of blackmail would help correct (and overshoot?) this institutional failure.
Yet I remain convinced there is, somewhere, a sound economic and utilitarian case against blackmail. But what is that case?
My favorite exotic explanation (it is not quite sound) is that legal blackmail would lead to inefficient blackmail. Perhaps the ones who should blackmail you are your family and close friends. That is when transaction costs are low and both parties strike a good deal, often based on an implicit rather than explicit blackmail. ("If you run off with that floozy…") The wrongdoer pays a penalty, and the would-be wrongdoer remains deterred. Nothing gets too messy. But if you open up this business to outsiders, well…trust breaks down. Blackmailers fabricate stories, they send weird threatening letters, and they cause extreme anxiety. Outsiders don’t even know when they should believe the word of a blackmailer, which limits blackmail possibilities from those in the know. Under this hypothesis, we keep blackmail illegal to keep blackmailers we can trust.
Addendum: I have turned on the comments function, in case you have good ideas on this topic.
I think the theoretical questions raised by Block and others are not specific to blackmail, but are part of wider issues around reputation and privacy. A satisfactory theory of privacy would probably account equally for blackmail.
Unfortunately, I don’t have one.
There is a distinction that can be made between malicious gossip and blackmail, which is that a proscription of blackmail is easier to enforce (albeit still difficult). Gossip traditionally has been beyond the practical reach of the law, but a threat to gossip is more likely to leave an evidential trail.
There’s a paper by Richard Posner on the economics of blackmail.
http://www.law.uchicago.edu/Lawecon/WkngPprs_01-25/04.posner.blackmail.pdf
As a side effect, legal, publically-acceptible blackmail would encourage some would-be whistleblowers to trade their knowledge of criminal behavior for cash rather than turning the criminals in. By making blackmail both illegal and immoral, society encourages whistleblowers at the margins to behave in ways that benefit society as a whole rather than just the whistleblower him- or herself.
One might argue that a society could compensate for legalizing blackmail by increasing the reward offered to those who report criminal activity to the proper authorities. However, such rewards will simply set the floor price for purchasing the silence of the blackmailer and erode the sense that citizens have a civic duty to report crimes. In the long run, criminalizing blackmail is a cheaper and more effective solution than competing with criminals to purchase the testimony of witnesses to their crimes.
Ayn Rand once expressed the opinion that blackmailers served a function analogous to that of vultures, consuming the corrupt, but this is one of those places where her philosophy led her into foolishness.
Best discussion ever on the subject of blackmail was the movie “The Gazebo” in which the husband wanted to kill the blackmailer to protect his wife’s reputation, but the wife hoped the dirty secret would get out, as the publicity would help her career.
People would spend resources to maintain their privacy (document shredding, hard-drive purging, extra-thick soundproof walls), that is, not spend resources to pay off blackmailers.
There may be a distinctly personal dimension to the blackmail doctrine. Blackmail, in both its common law and statutory forms, owes its existence and enforcement to powerful men in the judiciary and politics. Unsavory revelations about sexual trysts or poor business behavior may be unusually harmful to these prominent people, so they have a strong personal incentive to preserve blackmail laws. This may explain why blackmail, which, if legal, might efficiently reduce behavior we (at least profess to) think is bad, is nevertheless illegal.
I simply hadn’t considered the effect of blackmail on the blackmailable behaviors themselves.
I suspect legalization of blackmail would produce a decrease in behaviors that are scandalous but not illegal (infidelity) but might actually produce an increase in behaviors that are illegal (since now criminals can legally buy a witness’ silence through a blackmail contract).
Am I crazy or is blackmail essentially just rent seeking?
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