I wrote this in response to a number of “pro piracy” or “piracy rationalization” comments to a CNN article:
http://scitech.blogs.cnn.com/2009/04/20/a-turning-point-for-online-piracy

This appears to be a culture war, and one that is being lost – and will eventually cost us dearly. Many of these comments are consistent with my anecdotal experience with friends and acquaintances. People who are involved in theft, be it digital or material, always try to rationalize their behavior. Nobody actually believes that they are a bad person. I have known people who earn a living by stealing car stereos. Their justification will generally include such points as “insurance will pay for it – and big insurance companies deserve to be robbed..”, or “the guy who owns the car is obviously rich and can afford to get a new stereo”. Either way there is some justification or rationalization that allows the thief to sleep at night.

Digital piracy is no different. There seem to be many well-articulated arguments to justify digital piracy, but all seem to predicated on the assumption that since “stealing” digital content does not deprive the original owner the content, it isn’t really like stealing at all. You wouldn’t steal your friend’s car because then your friend would be without a car (and you would be without a friend). However if such a thing as a car replicator existed that allowed you to duplicate your friend’s car for free, then you probably wouldn’t think twice about “replicating” your friend’s car.

So for pirates who otherwise are not thieves, it seems to boil down to an internal rejection of the notion that digital piracy is, in fact, theft. Fair enough. It is different enough from material theft that we might as well distinguish it from material theft and give it a different name. So piracy is not “stealing” it is simply “piracy”.

Now that we have distinguished it, let’s look at some of the implications of piracy.

1. If a product is freely available via piracy, and in our culture, piracy is considered OK, then anyone who decides to “purchase” that product is really engaging in a form of charity because they believe in the cause of the product or the person who created it. This is why 10 years ago you thought it was OK to pay $20 for a DVD movie (because you were purchasing a product), but now you think that $20 is a rip-off, because you are now engaging in $20 or charity – more difficult to justify (people spend up to 10% of their income on charitable donations, and the other 90% on themselves – by the same formula you’d think that a pirate who likes a movie would be willing to donate $2 to the movie-maker, even though he would have been willing to purchase it from the movie maker for 10 times that).

2. Based on the economic assumption that people are inherently greedy, most people won’t choose to “purchase” a product when they can get it for free.

3. The marginal value of any product that can readily be pirated will approach zero.

4. At a value of zero the product is not worth making, so the supply of good digital products (e.g. music, movies, software, e-books) will also approach zero – you won’t be able to get them anymore.

If, as a culture, we want to preserve our rich climate of art and ideas, it is imperative that we address this issue. Simply lowering prices to reflect what “pirates” perceive as reasonable prices would result in artificially low prices (because a pirate’s perceived value of content is based on how much he would donate out of altruism, not how much the product should actually be worth to him). If we completely eliminated piracy, only then could we find out what a digital product is really worth. If prices are too high, people won’t pay them, and they will come down. If prices are too low so as to deter artists from producing product, then prices will go up until they reach equilibrium.

They cannot reach equilibrium as long as there is a free alternative to every digital product.

Attempts such as Apple’s DRM are certainly a step in the right direction, but have been met with much resistance from the “pirate” community, as they want the ability to copy anything that they buy freely. Unfortunately we’ve seen that people are not responsible enough to handle this privilege, so it is unrealistic to think that any solution without some form of DRM will solve our problem and produce a proper equilibrium.

Given the facts and the implications of those facts, it is imperative that we proceed with whatever reasonable acts are necessary to curtail piracy. It may not be stealing, but it is still bad for society.