This morning’s Sunday Times report that a member of the Royal Family has been blackmailed is provoking and amusing in equal parts.  Provoking in that it illustrates (yet further) the fragility of one of the central institutions of the state.  Amusing in that it illustrates (yet further) that not even the monarchy, the font of all legal justice, is content with the law’s definition of ‘justice’.

However, it also provokes me because it illustrates as well a fundamental flaw in blackmail.  That is, if blackmail requires the exchange of money for the non-release of information, that information must be worth something to both parties.

Indeed, because it may instead by released to a third party, that third party must also value that information.  That is, there is a market for that information.  So let’s evaluate that market.

In this case, the blackmailer is said to have tried to extort £50,000 from a member of the Royal Family to prevent the release of the details.  This, it seems, was regarded as a reasonable price by the blackmailer, and an unreasonable price by the royalty.  The end result is that the blackmailer insisted that the price was too high, and went to the police.

Instead, consider the third party, which economists in this country call the ‘News of the World’.  They value the story for the opposite reason.  However, they also value it for vastly more than the blackmailed party does.  Nothing sells tabloid newspapers like a scandal involving the Royal family (unless it involves Keeley).

Let’s say that the appearance of a Royals story boosts the single-day circulation of a tabloid by 200,000 newspapers.  That is, at a retail price of 75p, the News of the World can expect to earn something like £150,000.  When one considers the boost to advertising, one can more than double that.

The News of the World can offer a price up to this and still make a profit off the back of it.  They can offer £300,000, and be better off as a result.  No surprise that they say that some stories can be worth “hundreds of thousands of pounds if not millions“.

Hold on.  That £300,000 that the News of the World could be offering is clearly more than the £50,000 that the blackmailers supposedly sought from the royal in question.  Since this is a market, the blackmailers have a choice between the two, and by resorting to blackmail, they clearly made the wrong choice for their own economic wellbeing.

In cases like this, when the affected party is an individual and the third party is a national newspaper, blackmail is simply a stupid thing to do.  Blackmail is separated from the distinct offence of extortion by the fact that the act threatened by an extortioner is illegal, whereas a blackmailer is threatening to do something entirely legal.  Thus, extortion should clearly be illegal.

But blackmail is simply the offer of a service to a consumer in the market before anyone else.  Put like that, there is nothing morally wrong with it whatsoever.  Indeed, because the criminalisation of blackmail denies the right of the accused of a right to defend him or herself according to the value that he or she places on the information, the current regime is destructive.

Having examined the true nature of blackmail, one can only conclude that it ought to be decriminalised entirely, before this prohibition does any more damage to both individuals and society.  It’s time to end this unwanted and unwarranted censorship.  It’s time to clear the black name of blackmail.