Most people intuitively feel the answer is yes. But it’s surprisingly tricky to explain, in a coherent, consistent manner, why that should be the case. The paradox of blackmail has bedeviled legal scholars and philosophers of law for years: while it’s typically legal to reveal information about someone, as long as that information is accurate and legally-obtained, it’s illegal to threaten to do so as a way of soliciting money from him.
Unlike with extortion, where the perpetrator is threatening to do something illegal if she isn’t paid (e.g., “Give me $10,000 or I’ll burn down your house”), with blackmail the perpetrator is threatening to do something legal. If the act itself – revealing the information – isn’t bad enough to be criminalized, then why is merely threatening to commit the act so terrible?
This paradox is often expressed in terms of blackmail being a criminal act composed entirely of uncriminal parts. Telling someone you'd like $10,000 isn’t a crime; revealing someone’s secret isn’t a crime; and yet, telling someone you'd either like $10,000 or you're going to reveal his secret is a crime. How can that be?
Some scholars have countered that there is no logical reason to think that several unobjectionable parts can't add up to an objectionable whole. Philosopher Saul Smilansky, in the book 10 Moral Paradoxes, makes this case using the examples of bigamy and prostitution: It’s legal to marry one woman, and it’s legal to marry another woman, but it’s not legal to marry both. It’s legal to give someone money, and it’s legal to have sex, but it’s not legal to give someone money for sex. Blackmail may not be a complete aberration.
However, Smilansky acknowledges, even if there's no contradiction entailed by blackmail being illegal despite its component parts all being legal, we still need some explanation for why this particular combination of parts produces an objectionable result. He writes, “The way in which the ‘alchemy’ of the novel emergence of badness or wrongness operates in ‘ordinary blackmail’ remains mysterious… If one may threaten to do what one is (otherwise) allowed to do, offering not to so act in return for monetary compensation does not seem capable of bringing forth the sense of radical and novel heinousness that blackmail arouses.”
Interestingly, the source of that heinousness seems to be utterly different for different kinds of blackmail. For example, if Bob’s secret isn't hurting anyone else, but is merely a personal detail whose revelation would embarrass him, then it’s straightforward to explain the heinousness of Sue's blackmail. In these cases (for example, a past lover blackmailing Bob over details of their sex life), the heinousness comes from harming a person who’s done nothing wrong.
But what if the information pertains to a crime Bob himself is committing? For example, let’s say Bob is a CEO who is stealing from his company. In that case, most people would argue that Sue has a moral obligation to report Bob’s secret. In blackmailing Bob, Sue is threatening to do something – report the secret – that is not only legal, but moral! So whence the heinousness? In these cases, blackmail seems reprehensible not because it wrongs Bob himself, the ostensible “victim” of the blackmail, but because it wrongs the third party whom Bob’s secret crime is harming; the company’s shareholders, for example, or society as a whole. Sue’s blackmail is heinous, therefore, because she is choosing her own monetary gain over justice for Bob’s victims.
Another way of looking at the paradox in general is that if we were to legalize blackmail, we wouldn’t be granting Sue the right to do anything worse to Bob than what she is already permitted to do. Given that Sue is currently legally entitled to reveal secrets about Bob, allowing her to offer Bob a choice between that course of action and an alternate one isn’t making him any worse off than he would be if she simply exercised her legal right instead. It’s a basic principle of economic theory: offering someone additional options on top of what he currently has can’t make him worse off.
For that reason, outlawing blackmail can be seen as a way of restricting people’s freedoms. Think about it from a self-interested point of view: if someone has the power to spread information about you, wouldn’t you like to be offered the option to prevent that from happening by paying money? If you would be happier paying someone off than having your secret revealed, and the person who knows your secret is also happier being paid off than revealing the secret, then blackmail seems like a mutually beneficial trade. On what grounds, then, should such trades be outlawed?
I think the first step towards resolving the paradox is to recognize that our moral condemnation of an act isn’t just about the harm that it causes, but also our visceral reaction to the kind of person who would commit such an act. Being exploitative is a despicable trait in most people’s eyes, even when the exploitation isn’t making anyone worse off than he already was. (You can see this principle in the public reaction to “price gougers,” people who sell badly-needed supplies to the survivors of some tragedy, setting exorbitant prices because they know the customers will be desperate. Clearly, having the option to buy water for $20 a bottle is not making anyone worse off than they would be without such an option at all, but people nevertheless deplore the price-gouger’s character for taking advantage of the tragedy.)
However, if we want to legislate purely on utilitarian grounds, rather than on our aversion to unsavory characters, the question of whether blackmail should be legal becomes an interesting empirical balancing act between the gossipers, gossipees, and third parties. The answer to that balancing act hinges on a counterfactual question: “Would Sue have revealed Bob's secret anyway, even if she couldn't blackmail him?” If there are enough instances in which Sue would have revealed Bob’s secret anyway, then maybe both the Sues and the Bobs of the world are better off being free to enter into contractual agreements in which Sue trades her right to gossip about a particular secret, in exchange for some monetary compensation from Bob. That trade leaves both Sue and Bob better off than they were, or they wouldn’t have entered into it.
By contrast, there may be many situations in which Sue would not otherwise have revealed Bob's secret, and so legalizing blackmail incentivizes her to blackmail him rather than simply leaving him alone. In these cases, allowing Sue to blackmail Bob is supplanting the outcome “Sue leaves Bob alone,” rather than the outcome “Sue reveals Bob's secret.” In other words, legalizing blackmail helps people who would otherwise have lost their privacy and would like the option to pay to retain it, and it hurts people who would otherwise have retained their privacy but now must pay money or lose it.
Finally, we can’t forget to add the third parties’ interests to the utilitarian balance sheet: what are the benefits of gossip to the public? If they are sufficiently large, then allowing blackmail could be bad even when it benefits both Sue and Bob, simply because it would reduce the number of juicy secrets the rest of us get to hear – in other words, if writer Elbert Hubbard hit the target when he wrote, “Gossip is vice enjoyed vicariously.”