Monday, August 20, 2012

The Paradox of Blackmail (Part One)

David Letterman: A famous target of an attempted blackmail

Consider the following the scenario:

Madeline’s Memoirs: Madeline is an infamous courtesan operating in Victorian London. She counts among her clients some of the most powerful establishment men in Britain. With her career on the wane, she decides to write her memoirs, which will reveal all the sordid details of her many dalliances. This will no doubt cause great scandal and (given the social mores of the time) will be the downfall of her indecorous clientele. Spotting an opportunity to make more money, Madeline offers her former clients a deal: if they pay her a large sum of money, she will keep their name out of the published version of her memoirs.

This thought experiment — which is based on the real-life case of Harriette Wilson — is an example of blackmail: Madeline threatens to do something that would upset or destabilise her clients, unless they pay her a sum of money.

Blackmail is recognised as a crime in most countries. For example, in England and Wales, blackmail is criminalised under s. 21 of the Theft Act of 1968 and carries a potential maximum sentence of 14 years imprisonment. But the fact that blackmail is criminalised is thought to be troubling by many theorists of criminal law. As they see it, there is a paradox underlying the criminalisation of blackmail. And many of them have written at length about this paradox and its possible resolution. Indeed, the volume of literature available on this one topic is frankly overwhelming.

In this series of posts, I want to consider the so-called paradox of blackmail and its possible resolutions. As I said above, the volume of literature is overwhelming, so my discussion is limited to a few idiosyncratic pieces that happened to capture my attention. This may result in some arguments and theories not getting a fair shake in this series. I apologise for that in advance. I’m still reading and learning more about the topic as I write this, and so this series can really only be counted as a preliminary stage in my own education on this topic.

Anyway, in this first post I want to do three things. First, I want to set out the alleged paradox of blackmail in as clear a fashion as I can. Second, I want to introduce the reader to a famous (but not particularly good) article by Richard Epstein, which attempts to explain why blackmail ought to be criminalised. And third, I want to formalise the argument at the heart of Epstein’s paper so to facilitate its critical appraisal in part two.

1. The Paradox of Blackmail
It is easy to conflate blackmail with extortion — indeed the offence of blackmail as defined under English law seems to do this — but it is important to distinguish them nonetheless. When it comes to the paradox of blackmail, the theoretical debate is about blackmail itself, not about extortion. Here’s the difference:

Extortion: A extorts B whenever A threatens to engage in some unlawful act that would harm B (or a third party), unless B secures some benefit for A. For example, if I threaten to beat you up unless you pay me not do so, I am extorting you because beating you up is an unlawful act.
Blackmail: A blackmails B whenever A threatens to engage in some lawful act that would be harmful or upsetting to B, unless B secures some benefit for A. For example, if I threaten to disclose information about your affair to your spouse unless you pay me not do so, I am blackmailing you because I would be within my rights to disclose that information without the demand.

No one is troubled by the criminalisation of extortion since no one believes that people should have the right to gain money or other advantage from either threatening or engaging in unlawful acts. But people are troubled by the criminalisation of blackmail since it seems to involve lawful threats and otherwise lawful acts.

The information disclosure case is the classic example of this, and Madeline’s Memoirs is a classic example of the information disclosure case. In the scenario described, Madeline is threatening to disclose information about her clients to the public at large. She is perfectly within her rights to do so: provided she is not defaming anyone (i.e. provided she is telling the truth), she is entitled to disclose information about her affairs to the public and, indeed, to make money from that disclosure through book sales. Furthermore, she is within her rights to enter a contract for silence with her former clients, provided she does not initiate it. In other words, if her former clients came to her and asked her to remain silent in return for payment, she would be within her rights to accept that payment. It is only when she couples her lawful threat to disclose the information with a demand for money from her former clients, that her actions become criminal.

This is the essence of the so-called paradox of blackmail. Two acts — (a) threatening to do what you are lawfully entitled to do and (b) receiving money for refraining from doing what you are lawfully entitled to do — are innocent in and of themselves, but when they are combined in the form of a conditional demand (Unless you do X….I will do Y) they become criminal. Why is this?

2. Epstein’s Blackmail Inc.
One potential answer to this question can be found in Richard Epstein’s article “Blackmail Inc.”. As I said in the intro, the article is not particularly good, but it was my entry point into the literature so I have some perverse sense of loyalty to it. The majority of the article is given over to setting out Epstein’s understanding of the paradox of blackmail and only a tiny portion at the end is given to resolving the paradox. Despite this, I think the article has two interesting features and I’d like to share them here.

The first is that Epstein seems to sharpen the paradox by analogising blackmail with hard bargaining. (Now may be a good time to note that Epstein analyses everything through a libertarian lens.) Consider a supermarket chain which is negotiating with a firm of apple producers for the supply of apples to their stores. In previous years, the supermarket chain was happy with the price they negotiated with the producers, but they have recently heard of a rival firm of producers who are willing to supply at a lower price. Using this fact to their advantage, the supermarket chain threaten to switch their business to the rival firm unless the old firm can undercut the prices offered by the rival firm.

Structurally, this scenario bears a lot of similarities to blackmail. There is a threat to do something that is lawful, i.e. switch business to the rival firm. This threat is coupled with a conditional demand, i.e. unless the old firm reduces the price the threat will be carried through. And this demand harms or upsets the old firm because they are forced to reduce their profit margins. But for all that, there is nothing illegal about it. We tend to accept that hard bargaining of this sort is just part of the cut and thrust of ordinary commerce. And because of the structural similarities between this lawful practice and the unlawful practice of blackmail, the problems with the criminalisation of the latter are drawn into sharper relief.

The second interesting feature of Epstein’s article is the thought experiment he sketches at the end. In order to present his argument against the legalisation of blackmail, Epstein asks us to imagine a world in which blackmail is legalised to such an extent that a corporation is set up that specialises in blackmail. This is the Blackmail Inc of the title to his article (on this side of the world we would call it Blackmail Ltd.). Such a corporation would spend all its time hunting down salacious and upsetting information about people, carefully gaining monopoly control over that information, and demanding money for its non-disclosure.

Would such a world be a pleasant one? Would it be one we ought to welcome? Epstein thinks not, and his reasons for thinking not form the basis of his argument in favour of the continuing criminalisation of blackmail.

3. The Blackmail Inc. Argument
To make his case, Epstein asks us to reorient our perspective on blackmail. Typically, we look at it from the perspective of the potential blackmailer, i.e. the person who is demanding the money or favour in order to keep quiet. But we shouldn’t ignore the perspective of the potential victim, i.e. the person who doesn’t want the information to be disclosed. As Epstein sees it, this person is engaged in a long-term systematic deceit or fraud in order to gain some reputational or tangible benefit from a third party. And the fact that they are engaged in such a level of deceit or fraud is significant.

It is significant because the legalisation of blackmail could embolden this type of deceit and fraud. And it is this emboldening which, according to Epstein, justifies the criminalisation of blackmail. We can put this in argumentative form in the following manner:

  • (1) If an activity would sustain and support deceit and fraud on a massive scale, then it ought to be criminalised. 
  • (2) Blackmail would sustain and support deceit and fraud on a massive scale. 
  • (3) Therefore, blackmail ought to be criminalised.

Let’s talk about the premises of this argument for a bit and let’s begin with premise (1). The premise is supported by the generally accepted belief that fraud and deceit are harmful — they cause people distress and allow others to make unfair gains — and consequently are ripe targets for criminalisation. That this is generally accepted is apparent from the fact that many legal systems criminalise fraud, and its criminalisation is generally not thought to be theoretically problematic. There are other issues with this defence of premise (1), and we’ll talk about them in part two, but for now just note that it only talks about deceit and fraud “on a massive scale”, thus ruling out the criminalisation of trivial acts that might encourage minor levels of fraud or deceit. No doubt there are many such acts, flowing from social norms for instance, but we ought not to criminalise them. Only when the emboldening crosses a certain threshold will it become a target for criminalisation.

Let’s move on then to premise (2). This is defended by reference to the thought experiment involving Blackmail Inc. and to two mechanisms that Blackmail Inc. could exploit in sustaining and supporting deceit and fraud on a massive scale. The first is simply that Blackmail Inc could use its leverage to force the blackmail victim to engage in other types of fraud, or indeed other criminal acts, in order to pay them off. For example, since the victim already has their toe in the door of fraud, why not go a little further and make a fraudulent loan application, or a dodgy insurance claim, in order to pay off their blackmailers? Coupled with this, there is the possibility that Blackmail Inc could offer ongoing advice and consultation to the blackmail victim on how best to continue their fraud. Indeed, this could well be a necessary element of their business since the victim needs to be assured that the information will not slip out in any other way. So there are least two ways in which the legalisation of blackmail could support and sustain fraud on a massive scale. When we combine this fact with the principle in premise (1), we reach the desired conclusion: blackmail ought to be criminalised.

This is the basic structure and defence of Epstein’s argument. But is it any good? We’ll see in part two.

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