With blackmail, an individual deciding whether to criticize a norm will consider two additional factors: how his criticism affects the possibility of paying blackmail or receiving blackmail payments.
A, that legalizing blackmail would increase the expected cost of violating norms, legalization would still probably inhibit norm reform.
Legalizing blackmail would affect the most persuasive critics differently than the least persuasive critics.
The less one gains from violating a norm, the more likely it is that the marginal costs of norm criticism (foregone blackmail profits) will outweigh the marginal benefits of criticism.
Finally, legalizing blackmail would also inhibit some of the less persuasive criticism in the one circumstance where such criticism might matter.
The blackmail example demonstrates another indirect means by which law can regulate norms.
One is that if norms tend to be efficient, as certain commentators claim,(78) then the blackmail ban is efficient because it facilitates the internalization and refinement of norms.
Even without resolving the average efficiency of norms, however, the blackmail example reveals greater complexity to the state's task in norm governance.
The Efficiency of the Blackmail Ban with Privacy Norms
81) The prohibition on blackmail presents something of a puzzle: The blackmailer is punished for giving his victim a choice between paying a price and suffering an embarrassing yet lawful disclosure of information.
Consideration of group norms reveals new efficiencies in the prohibition on blackmail.
83) The remainder of the Part then explains why the ban on opportunistic blackmail is efficient.
To summarize briefly a substantial literature--at the risk of omitting important details--the central evil of blackmail is that it induces investment in a wasteful or "sterile" activity.
The blackmail transaction would not be sterile, however, if it provided useful incentives to potential victims.
The theory really explains only why we prohibit people from investing in the blackmail enterprise.