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Blackmail and "Economic" Analysis: Reply to Ginsburg and Shechtman


  • Walter Block

    (University of Central Arkansas)

  • Robert W. McGee

    (Seton Hall University)


Blackmail consists of two things, each indisputably legal on their own; yet, when combined in a single act, the result is considered a crime. First, one may gossip, and, provided that what is said is true, there is nothing illegal about it. Truth is an absolute defense. Second, if one may speak the truth, one may also threaten to speak the truth. Yet if someone requests money in exchange for silence -- money in exchange for giving up the right of free speech -- it is a crime. The law and economics literature takes the position that blackmail should be illegal on efficiency grounds. The present authors reject this law and economics analysis. They maintain that since it is legal to gossip, it should therefore not be against the law to threaten to gossip, unless paid off not to do so. In a word, blackmail is a victimless crime, and must be legalized, if justice is to be attained. The authors criticize several authors who take the efficiency position, but focus their argument on a paper written by Douglas Ginsburg and Paul Shechtman.

Suggested Citation

  • Walter Block & Robert W. McGee, 1998. "Blackmail and "Economic" Analysis: Reply to Ginsburg and Shechtman," Law and Economics 9805003, EconWPA.
  • Handle: RePEc:wpa:wuwple:9805003
    Note: Type of Document - Word 6.0; prepared on Macintosh; to print on LaserWriter 4/600PS; pages: 50

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    References listed on IDEAS

    1. Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Oxford University Press, vol. 43(2), pages 217-235.
    2. Huang, Roger D. & Stoll, Hans R., 1996. "Dealer versus auction markets: A paired comparison of execution costs on NASDAQ and the NYSE," Journal of Financial Economics, Elsevier, vol. 41(3), pages 313-357, July.
    3. Doyle, Christopher, 1988. "Different selling strategies in Bertrand oligopoly," Economics Letters, Elsevier, vol. 28(4), pages 387-390.
    4. Kandel, Eugene & Marx, Leslie M., 1997. "Nasdaq market structure and spread patterns," Journal of Financial Economics, Elsevier, vol. 45(1), pages 61-89, July.
    5. Crocker, Keith J & Lyon, Thomas P, 1994. "What do Facilitating Practices Facilitate? An Empirical Investigation of Most-Favored-Nation Clauses in Natural Gas Contracts," Journal of Law and Economics, University of Chicago Press, vol. 37(2), pages 297-322, October.
    6. Severin Borenstein, 1991. "Selling Costs and Switching Costs: Explaining Retail Gasoline Margins," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 354-369, Autumn.
    7. Christie, William G & Harris, Jeffrey H & Schultz, Paul H, 1994. " Why Did NASDAQ Market Makers Stop Avoiding Odd-Eighth Quotes?," Journal of Finance, American Finance Association, vol. 49(5), pages 1841-1860, December.
    8. Christie William G. & Huang Roger D., 1994. "Market Structures and Liquidity: A Transactions Data Study of Exchange Listings," Journal of Financial Intermediation, Elsevier, vol. 3(3), pages 300-326, June.
    9. Corts, Kenneth S., 1995. "On the robustness of the argument that price-matching is anti-competitive," Economics Letters, Elsevier, vol. 47(3-4), pages 417-421, March.
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    More about this item


    blackmail welfare;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law

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