Thing people miss about "Piracy"... (Economics 101)
First off, just a quick definition from the American Heritage College Dictionary:
piracy noun 2. The unauthorized use or reproduction of copyrighted or patented material.
While that's nice and neat, I'd like to add a few thoughts about the nature of piracy, and what we're all arguing about these days.
If everyone can remember back to their Economics 101, there was this nice little Price (y-axis) vs. Demand (x-axis) chart, with a curve drawn on it. In virtually all known instances, this is a decreasing curve, with demand increasing as price decreases. For any given point on the curve, you have a certain demand (that is, amount sellable) at that given price. The profit a seller makes is defined by the product of the price and demand (Assume price P and demand D, profit is P x D. ). This is a slight exaggeration, but useful for our purposes...
In the real world, this is what piracy is: for a given commodity (and believe me, music is a commodity), there is a "natural" demand. That is, if the price were allowed to fluctuate (given that it has certain minimums, associated with the cost to produces and distribute the product), there is a certain point where the profit is maximized; that is PxD is maximal. Thus, everything should sell at this maximal price - the largest amount of consumers are happy, and the seller makes the most money. In general, this means that everyone who really wants the product can buy it at what appears to be a fair price (this is an overgeneralization, but I'll gloss over it right now...)
Piracy occurs when the seller artificially sets the prices higher than the "natural" price would be. Since demand for the product exceeds the perceived "fair price" (which is what would be charged at the natural point), a certain subset of the people will pirate the product. For arguments sake, let us assume that the number of people that will pirate the music is equal to the number that would buy it at the natural price, minus the number that actually bought it at the artificial price.
There are two fallicies hidden in this nice little problem. First, assume the following: Artifical price A, natural price P, aritifical demand D, natural demand N. By definition, the maximal profit a seller can make is N x P. Instead, they make A x D, which by definition is less than N x P. However, seller claims that they lose money to piracy, and claim that lost profits are equal to A x (N - D). This is completely false, since in order to get demand N, they have to charge P. In any case, they are making less money now than if they charged the proper pricing for their product, based on the determination of N. The difficulties lie in determining what N really will be (thus, to set the price P), and also making the organizational changes that are required to produce and distribute N (which may be very different than the org and dist needs to distribute D). To be completely honest, the seller really can claim to lose P x (N - D) in profits to piracy.
In the Real World, piracy is difficult due to the physical nature of goods, and the difficulties and expenses related to producing, shipping, et al. the pirated goods. Thus, there are very few places where pirated (usually called counterfeit) goods are successful. However, in the digital world, distribution and production costs are virtually nil at the per-copy level, which is what is important for piracy determination. Thus, if the seller does not chose the proper natural price to sell his wares at, the level of piracy skyrockets due to the ease of it; additionally, piracy may eat as his normal customers - the social stigma of piracy is weakened by the rampant piracy by "Natural" customers, and thus a normal customer may pirate. Therefore, in the digital world, improper pricing may eventually erode the profits that you would normally make at a given price point.
Ok, that was the economics behind piracy. Here are some legal/ethical arguments:
By definition, piracy is illegal. We as a society have decided that in order to encourage ideas and inventions, we should invest physical property rights to ideas and inventions. I heartily agree with this philosophy: ideas and inventions should be protected. The extent to which ideas and inventions are protectable, and the period in which they are provided protection are completely separate issues (indeed, I would argue that both WHAT and HOW LONG are severely broken in our current system, but that argument has no bearing on this current one; despite other's wishes to blur the two together, they deserve individual treatment).
Thus, we shall make the following statement: irrespective of the determination of HOW LONG or WHAT is afforded Intellectual Property protection, once something is protected, the following laws and ethics kick in:
Piracy (by the above definition) is illegal.
Piracy is unethical, since it entails the use or acquirement of a products that you are not entitled to.
Piracy is unethical, since you deprive the producer of income (no matter how small, and no matter who the producer is) without the producer's consent. By virtually all known codes of ethics, taking or using something that the law declares owned by someone else without their permission is unethical (instances of critical need excepted, which don't apply here).
Allowing (either by lack of legal enforcement, or by social consensus) widespread piracy is ultimately bad for the society, as it discourages the future production of products, since the producers cannot count on a method of compensation for their works.
Widespread localized piracy is a sure indication of an improperly priced product. Thus, short-term, localized piracy can lead to several beneficial things:
Indications of price-fixing, monopolistic behavior, and/or cartelization. The authorities should immediately investigate to determine if this monopoly is legal and/or justified.
Indications to the seller of what the natural demand really is for their product, so they can re-price their products and increase their profits.
Lack of available options to consumers; thus, it can point out areas where competitors may have an effective market.
A poor understanding of the market dynamics and characteristics by the business community. Hopefully, once businesses understand better how that particular market wishes to operate, they will adjust accordingly and be able to maximize their profits.
Encouraging piracy of non-life-essentials on the basis of the behavior of the seller is unethical, even if the seller is behaving unethically. Piracy as part of an organized boycott/movement against the seller is questionable (it might be useful tool, but then again, its probably not a good one); as practiced by virtually all the members of the digital generation, it's an individual act of theivery.
There is no real difference between digital piracy and normal piracy. The differences lie in the economic costs to produce such an item, which are really immaterial to the overall societal harm piracy causes. Making MP3s from a friend's CD is conceptually (and ethically) no different than photocopying a friend's book, or selling fake Levis.
There might be some good things that come out of the massive MP3 and other digital piracy that is rampant these days. In fact, I sincerely hope so. However, that's all speculation. Especially since in the main, digital piracy isn't aimed at anything more than the "get-something-for-nothing" attitude. Scrub it up all you want, but anyone telling me that they are the digital equivalent of a Civil Rights marcher (or even a letter-writting campain organizer) is being totally self-serving, self-aggrandizing, and ultimately, self-deluding. We can justify the little lapses we make as not really important, but they're still unethical, no matter what rationizations we try.
(who admits to lapses of ethics on an ongoing basis)