Blackmail from a to Z: a Reply to Joseph Isenbergh's "blackmail from a to C" - Walter Block and Robert W. Mcgee

• Citation: Vol. 50 No. 2
• Publication year: 1999

Blackmail from A to Z: A Reply to

Joseph Isenbergh's "Blackmailfrom A to C"by Walter Block^* and

Robert W. McGee^**

The long and the short of blackmail is that it consists of two acts, each of which, were they to occur alone, would be considered legal by everyone. Yet somehow, when these elements occur together, virtually all commentators who have ever written on the subject consider the complex act consisting of both elements to be unlawful.¹ There is only a corporal's guard that demurs.² Is the mainstream view due perhaps to some sort of alchemy? How else can two legal "rights" be rendered a "wrong" when they take place in tandem?

Let us consider the specifics. Which two acts together constitute blackmail? First, there is a threat or an offer, depending upon your point of view.³ Whatever it is called, it states that some act, which in and of itself is perfectly legal, will be done.⁴ The proposition typically is to engage in free speech rights and gossip about the secrets of the blackmailee or target.⁵ However, the topic could be almost anything. The proposition could be to build a fence on my own land that blocks your view. It could be to write a negative review of your recently published book. It could even be to withhold selling you a piece of my property.

Second, there is a demand or a request. This again depends upon your point of view. Characteristically in the case of blackmail, the proposal concerns money or other valuable considerations.

Now put the two acts together. For example, the proposition is that unless you give me money, I will tell the newspapers that you patronize prostitutes. Unless you grant me special privileges, I will build a tall fence. Unless you do some service for me, I will give your book a negative review. Unless you pay me my price, I will not sell you my motorcycle.

What each of these scenarios has in common is that it is legal to ask for money, services, or privileges. Also, it is not a crime to gossip about one's sexual practices, erect a structure on my own land, cast aspersions on your literary skills, or keep my motorcycle for myself.

Blackmail must be sharply distinguished from extortion. Extortion also combines a request for money with a threat. Only here the threat is to do something clearly unlawful, such as kill someone, burn down a house, or kidnap children. Blackmail and extortion are commonly confused, perhaps because they both combine a threat and a demand.

However, these two acts resemble each other only superficially. They are as distinct as rape and seduction⁶ or trade and robbery.

Isenbergh attempts to rationalize the present outlawry of blackmail.⁷ His "concern ... is limited to 'pure' or 'informational' blackmail: the sale of silence by someone who is otherwise free to disclose what he knows."⁸ He proposes a nomenclature to deal with this issue.⁹ A is the black-mailee or target; B is the blackmailer, the man who solicits money or other valuable consideration in order to keep silent; and C is the person to whom B threatens to make available this information.¹⁰

Isenbergh fully accepts our characterization of blackmail as the amalgamation of two otherwise licit acts and correctly distinguishes it from extortion: "Blackmail, as addressed here, does not include threats of disclosure barred by statute or contract, such as a doctor's threat to reveal a patient's loathsome disease, which belong to the broader class of'extortion.'"¹¹

Nevertheless, Isenbergh distinguishes between some threats coupled with a demand for money from other seemingly identical threats.¹² One he labels "permissible threats."¹³ The other he labels "blackmail."¹⁴ He states:

"Pay me higher wages or I will go on strike or quit," "pay me the price I am asking for this good or I will sell it to someone else," and "marry me or I will shave my head and join the Foreign Legion" are, I think, permissible threats almost anywhere, while "paint my house or I will tell your boyfriend about your sex change operation" and "if you fire me I'll tell the IRS about your secret Swiss bank account" are blackmail.¹⁵

Our author continues, "[t]hreats of the latter type often elicit a strong aesthetic reaction," while, presumably, those of the former type do not.¹⁶ But aesthetic tastes surely cannot be the bedrock of the law. They are far too subjective. On what legal principle can we justify making "permissible threats" legal while outlawing blackmail?¹⁷

Isenbergh answers that "[t]he justification for the prohibition of blackmail, if there is one, must therefore lie in the particular nature of information."¹⁸ Why is this? It is because

[i]n a frictionless world (one in which it were costless to bargain over the value of information), prohibition of blackmail would surely not be correct. For most rights in property other than information, even in our world of significant transactional costs, prohibition of bargaining is likely to impede the appropriate allocation of those rights.¹⁹

Isenbergh's theory can thus be seen as an instance of the fallacious argument of "market failure."²⁰ If markets were perfect, i.e., there were no transactional costs, then we could have laissez faire capitalism. Unfortunately, however, they are not. On the contrary, there are "frictions." Therefore, we must have government intervention, regulation, and prohibition.

Isenbergh, however, does not fit neatly into either the total prohibitionist or the total legalization model. Instead, he wants to

retain the prohibition of blackmail for: 1) information, however acquired, held by B concerning a prosecutable crime or tort committed by A against C; and 2) information acquired by B outside a prior course of dealing with A . . . [and] make B's agreement with A not to disclose information unenforceable and to treat B's receipt of compensation for silence as a form of complicity in whatever is kept silent.²¹

At the outset one can see that none of this follows any precept of justice. Instead it is an attempt to tailor the law to reach certain specific economic goals. This is akin to "fine tuning," or centrally planning, the economy.

I. Blackmail as Prohibited Bargaining

According to Isenbergh:

What is prohibited under the law of blackmail is a certain type of bargaining over the disclosure of information, rather than the bare result, which is some sort of compensation given for silence. It is B's threat of disclosure that is barred, not any and all reward from A for B's discretion. Thus if A spontaneously offers to reward B's discretion regarding private information, or simply does so without bargaining, there is no prohibited blackmail, even if it is likely that B's discretion would end with the withdrawal of the reward. The law of blackmail is in this respect like that of prostitution, which usually bars specific bargaining over the sale of sex rather than all transfers of wealth in consideration of sex.²²

This is a pivotal statement because it uncovers several difficulties. Why should bargaining be singled out for special concern in blackmail? There is nothing intrinsically invasive about negotiating. If we are to be logically consistent and ban discussions over contracts in blackmail, why not prohibit all occupations and professions whose main function is to arrange the details of commerce? This includes, for example, lawyers, auctioneers, real estate agents, stockbrokers, middlemen, and intermediaries of all types and varieties functioning in the business world. And what about people and groups who reduce transactional costs in the social world—personal columns in newspapers, matchmakers, organizers of singles dances, church clubs for the unmarried?

There is far more bargaining in a modern society than just these examples. In order to be inclusive, why not ban bargaining entirely and insist upon sales at retail or sticker prices? That is, if I advertise to sell my car for five thousand dollars and someone were to offer me four thousand dollars, he should be incarcerated for that crime. We should be dealt with in a similar summary manner if we were to accept his offer. Thus, Isenbergh's view of the law can be interpreted as racist and discriminatory because certain nations and ethnic groups make more of a virtue out of bargaining than others.²³

Isenberg might object that he is limiting his crusade against bargaining to commercial interactions concerning information. However, two objections immediately arise. First, if bargaining is so bad, why limit its prohibition to just information? Why not broaden the prohibition as outlined above? Second, Isenbergh hones in on the informational aspects of blackmail. But many of the cases he mentions focus at least partially, and often almost completely, on information availability, or the lack thereof.²⁴ Surely, most middlemen and intermediaries function as information providers. Bargaining between the retailer and customer of consumer durables, houses, cars, and similar goods also serves as an information-creating institution.

Another problem is if the blackmail contract is initiated by the blackmailee, then Isenbergh will give him a free ride, legally speaking. But if inaugurated by the blackmailer, Isenberg will throw the book at him. Why? Is it not the same identical contract in either case? It seems unreasonable for its legality to turn on so superficial a fact.

In the view of Murray Rothbard:

Suppose that, in the above case, instead of Smith [the blackmailer] going to Jones [the blackmailee] with an offer of silence, Jones had heard of Smith's knowledge and his intent to print it, and went to Smith to offer to purchase the latter's silence? Should that contract be illegal? And if so, why? But if Jones' offer should be legal while Smith's is illegal, should it be illegal for Smith to turn down Jones' offer, and then ask for more money as the price of his silence? And, furthermore, should it be illegal for Smith to subtly let Jones know that Smith has the information and intends to...