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It’s blackmail all the way down

Summary:
David Henderson recently raised doubts about whether blackmail should be illegal, and Robin Hanson advocated legalizing blackmail. David cited the argument that activities that are generally legal (such as gossip), should not become illegal merely because money changes hands. Robin cited the argument that blackmail is a way of enforcing society’s norms, and that the threat of blackmail might deter bad behavior. Tyler Cowen argued against legalizing blackmail, as did I.  One of Robin’s commenters pointed out that one of society’s norms is “blackmail is wrong.” The following story is intended to be a humorous way of exposing the internal contradictions of blackmail: Let’s suppose that after years of effort, Robin gets a conservative Virginia legislature to legalize

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David Henderson recently raised doubts about whether blackmail should be illegal, and Robin Hanson advocated legalizing blackmail. David cited the argument that activities that are generally legal (such as gossip), should not become illegal merely because money changes hands. Robin cited the argument that blackmail is a way of enforcing society’s norms, and that the threat of blackmail might deter bad behavior. Tyler Cowen argued against legalizing blackmail, as did I.  One of Robin’s commenters pointed out that one of society’s norms is “blackmail is wrong.”

The following story is intended to be a humorous way of exposing the internal contradictions of blackmail:

Let’s suppose that after years of effort, Robin gets a conservative Virginia legislature to legalize blackmail.  Robin argues that this will help to enforce society’s norms against bad behavior.  One of Robin’s colleagues is a grouchy 75-year old man.  He overhears gossip that a female GMU student from a good family is engaging in prostitution on the side, to earn money for her living expenses. The old guy decides to try to enforce society’s norm against prostitution by blackmailing the young woman.

Robin encourages him to stop, arguing that society’s attitudes against prostitution are based on the idea that an activity that is OK when no money changes hands becomes immoral when turned into a business transaction.  He worries that the act of blackmailing a student for engaging in an activity tainted by money will tend to undermine the argument for legalizing blackmail (another activity widely viewed as immoral when it is turned into a commercial transaction.)  Alas, his pleas are not successful, as the old guy is mean and spiteful.

Soon after, Robin’s colleague Tyler hears about what’s going on.  Tyler opposed the legalization of blackmail and sees this example as a way to discredit the policy. But he is too polite to raise the issue publicly as he doesn’t want to embarrass the young woman.

Things change when Tyler’s twin brother (Tyrone) gets wind of what’s going on and hatches a devious plan to get revenge, to give the old man a taste of his medicine.  Tyrone begins blackmailing the old professor, threatening to expose the old guy’s blackmailing of the young coed.  Tyrone reasons that he’s merely enforcing society’s norms against blackmail, particularly when it’s a mean old man blackmailing a vulnerable young woman.  Even though the GOP-dominated Virginia legislature legalized blackmail, among the old professor’s colleagues at GMU there remains a widespread view that blackmail is a despicable activity.

OK, that’s just a fanciful story.  But if blackmail is useful because it enforces society’s norms, what are we to make of the fact that one of society’s norms is that many activities become immoral as soon as money is introduced into the equation (as with prostitution)?  And the norm that blackmail itself is immoral?

Great literature and great films often turn people violating society’s norms into sympathetic characters, especially when they are ground down by “the machine”.  I suspect that the almost universal public opposition to legalizing blackmail reflects society’s view (subconscious to be sure) that enforcing these norms (especially for non-criminal activities) requires a “light touch”, and that turning shaming into an highly profitable industry will do more harm than good. It will turn society into a mean, backstabbing culture.  The people hurt most will be sensitive good people who made a mistake, not callous gang members who don’t care if others think they are evil.

Dueling was outlawed in the 19th century, after society realized that this ostensibly “voluntary” activity was not actually voluntary at all, and that the harm done exceeded the very real benefit of discouraging men from engaging in personal slights that annoyed other men. Yes, men were free to decline a duel (at a cost to their reputation), and people today are free to not pay blackmailers.  But I’d rather live in a world where people don’t have to make those choices.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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