Why Is Blackmail Outlawed?

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A man in China sold his kidney for $3,000. His mother asked him where he got the money; he was kind of sleepy. So why is that like blackmail? There's no problem with you giving it to my wife. She wants it. But there's a transaction that makes both of us better off instead of that bad thing. And that transaction is outlawed. We want to keep these outside the commercial sphere. The question is why? Of course, we sell our time. We sell our labor, which is clearly something bodily. I think most people, when they just get a Kidney donation, they just go yuck. It ruins human dignity.

Mike Munger of Duke University talks with EconTalk host Russ Roberts about the psychology, sociology, and economics of buying and selling. Why are different transactions that seemingly make both parties better off frowned on and often made illegal? In theory, all voluntary transactions should make both parties better off. But Munger argues that some transactions are more voluntary than others. Munger lists the attributes of a truly voluntary transaction, what he calls a euvoluntary transaction and argues that when transactions are not euvoluntary, they may be outlawed or seen as immoral. Related issues that are discussed include price gouging after a natural disaster, blackmail, sales of human organs, and the employment of low-wage workers.