See Update at the end of this post.

In his latest column for Bloomberg, “Seven Lessons About Blackmail,” economist Tyler Cowen takes up the issue of blackmail. What motivated it, of course, as he makes clear, is the recent controversy involving Amazon’s Jeff Bezos’s allegation that the National Enquirer has blackmailed him.

Although Tyler recognizes that a case needs to be made that blackmail should be illegal, he doesn’t do justice to the issue. His only statement on the issue in his piece, other than a brief mention that Jeff Bezos is one of the good guys, is this:

Finally, most people now have a new and better sense of why blackmail should be illegal. Economists have long faced an embarrassing question: If it helps deter undesirable actions, what exactly is wrong with blackmail? The traditional answer has long been that laws against blackmail prevent would-be blackmailers from investing too much time and energy into digging up evidence of wrongdoing. Yet those hardly seem like major costs, no more than police patrols would be.

Perhaps a better objection to blackmail is that it distracts everyone’s attention, degrades public discourse and, in the largest sense, works against the possibility of second chances in life. Of course there should be debate about what constitutes good and bad conduct. But the focus should be on what people did or did not do, and not so much about the drama of how the information was obtained.

Tyler’s argument for making blackmail illegal is pretty weak. Facebook distracts almost everyone’s attention and even more attention than blackmail does. It arguably degrades public discourse. I’m not sure that FB works against the possibility of second chances in life; in some cases it probably does. But, hey, that’s at least two out of three. So would Tyler make Facebook illegal? And if not, why not?

To Tyler’s credit, he does link to a 1985 law review article by economist Walter Block and historian David Gordon, “Blackmail, Extortion, and Free Speech: A Reply to Posner, Epstein, Nozick and Lindgren,” in which they lay out the case for why blackmail should be legal. Unfortunately, Tyler doesn’t discuss it. Block and Gordon do a devastating critique of legal scholars Richard Posner and Richard Epstein and I recommend the article.

Tyler links to Bezos’s post on the issue. One Bezos sentence that is telling is this one:

If in my position I can’t stand up to this kind of extortion, how many people can?

Why is it telling? Because the issues of extortion and blackmail are very different, as Block and Gordon make clear. Here’s a key paragraph in their piece:

As defined, blackmail should not be accorded the legal sanctions usually meted out in response to criminal behavior since it does not entail the violation of rights. Rather, it consists of the offer of a commercial trade. The blackmailer will remain silent about the humiliating, embarrassing or even criminal secret of the blackmailee, accepting payment in return. If the offer to trade money for silence is rejected, the blackmailer will publicize the secret, which is part of his rights of free speech. In these terms the distinction between extortion and blackmail may be made as follows: extortion utilizes a threat to do something illicit, such as commit murder, arson or kidnapping. The threat of blackmail is limited to what would otherwise be licit-commit an act of free speech. If a person has the right to do X, he necessarily has the right to give warning of the fact that he will do or may do X-that is, to threaten to do X. Blackmail is thus a noncriminal act.

I do recommend reading their whole piece and also read footnote 50 to see where David Gordon parts company with his co-author.

One pair that I would like to hear from on this are Georgetown University philosophers Jason Brennan and Peter Jaworski. They wrote a book titled Markets Without Limits. The description of their book on Amazon states their thesis: “the question of what rightfully may be bought and sold has a simple answer: if you may do it for free, you may do it for money.” Although I haven’t read the book, a friend who has read the book carefully tells me that this thesis is an accurate summary of their message.

So now let’s consider blackmail. The essence of blackmail is threatening to reveal information about someone unless someone pays you, in money or in kind, not to. We are free not to reveal embarrassing information about people. So Brennan and Jaworski would have to argue, given their premise, that we should be free not to reveal information about someone if the person pays us not to.

Do they so argue? No. Again, according to this careful-reading friend, they leave the question unaddressed.

I would love to see them address it.


Robin Hanson weighs in, noting that he has, in previous posts, disposed of all of the arguments he knows of for making blackmail illegal.