It's like the argument that eliminating the gas tax will lower gas prices - if the market price is 4.10/gal, then eliminating the gas tax just means that money goes straight to the gas station instead of being set aside to fix roads - the supply and demand have not changed, so, *by definition*, the market price has not changed.
wrong on two counts. well, maybe. dunno if you live in the US, if so then your gas tax isn't being set aside to fix roads. the federal tax goes to the general fund where it can be spent on silly things like $10,000 toilets and laws prohibiting incandescent light bulbs. (better stock up on them by 2014. personally, i'm gettin' into that black market.) your millage may vary with state taxes.
what you don't take into account is the affect of adjusting the price on demand. it's a simple point to miss, but when you think about it, your assessment would have to assume that your demand for gas is exactly the same as it was when it was $1.50/gal. I dunno about you, but I sure as heck ain't pining for a Hummer H1 anymore (H3's are for pansies who suck at overcompensating )
it would be fair to say that we wouldn't get 100% of the difference the tax would make. the savings wouldn't be phenomonal. still, gas stations and oil companies in general know that enough people scan the town for the cheapest price. even reduction of a few pennies will cause people to flock. competition is what makes capitalism great!
That seems to me to be assuming that the price is *not* being driven my supply and demand. If the cost is driven by Supply curve X Crossing demand curve Y (Simplistic I know, but close enough for forum econ 101) then taxes don't change where that point is.
Sure there may be indirect affects on the supply curve because of profitability on suppliers and so on, but that's the same supply curve that's going to be moved by the demand going up anyway, so I'm not seeing that as all that much of an issue - the affect on price is still going to be so much lower than the tax revenue you're losing that it's kinda silly to contemplate it.
By the same token - reproduction costs being trivial on a per item basis, piracy can'y really affect supply (Only if it becomes so rampant as to make the fixed expenses of production higher than the profit from the market, at which point supply goes from infinite to zero.) and can only marginally affect demand (Since it can only decrease the demand in the market already unwilling to pay the for the item - i.e., in the market that wasn't actually part of the market.)
ahh, but that's not the whole story about the pirate market. most probably wouldn't buy the item. but some would. it's at least worth figuring out how many. back in the days of Napster ("You'll never shut down the real Napster." i'd be impressed if anyone gets the movie reference without googling it) there are many songs i would have bought CDs for had Napster not been available. in fact, when i grew a conscience and got out of my college days narcissism i actually did buy several of them.
though, arguably, DRM has for a while driven people into piracy who weren't there before. there are stories about average joe folks who, say, wanted to copy a dvd because their kids might damage the original copy and, finding they can't because of pesky CSS, they download the movie using Kazaa or equivalent. they aren't bad people, and sometimes they don't know better. all the same, it's clear that fighting piracy will at some point actually bring about further piracy as folks who wouldn't do wrong otherwise are driven to the dark side.
Oh, I certainly wouldn't argue that Piracy has *no* effect. But the effect is entirely demand side, because unlike theft, piracy *can't* affect the supply - the producer can for *effectively* supply all the demand he can get.
So, you have 'mini-markets'
The first two are the non-downloaders - the 'honest' market, who will buy it, or do without - downloading has no effect on this market, and what I'm going to call the bootleggers, people that downloaded illegal copies.
The Bootleg market is divided into
A) the Pirates - the 'dishonest' market, who have no *intent* of buying a copy. This market is also actually unaffected by the downloading - either they were going to get an illegal copy, or do without.
The Rationalizing Market - people that were influenced by the existence of the bootleg copies.
Now, some of those people had money to do two things, and wanted to do three. There is a legitimate problem with this, because if the three things were take the girl out to the movies, dinner afterward, then listen to some Barry White in the apartment, by odd coincidence you can't download the dinner or the movie, so somehow Barry White just got screwed.
Somehow poetic justice, yet still unfair. (And God - there's a *GREAT* Anti-piracy commercial in there somewhere - Barry White, standing in the apartment going "Hey Man, you paid
for her Dinner, You paid
for her movie, and now you're gonna diss me
? You paid for that CHICK FLICK
, and now
you want my
help? For FREE
? You can get Celine Dion for your happy ass white boy!" Cameo "Don't get me involved here Barry - the guy did this to me last
week. Kinda pathetic really . . .")
But - the Rationalizing market is itself more than that. There are people that download, don't like it, and don't buy it. People that download it, like it, and do buy it. People that bought a copy, then downloaded a cracked version because the DRM rendered it unplayable. These all come into play, and if you are going to try to stop piracy, *this* market, is where you need to figure out why people bootleg copies.
The problem comes when the producers assume that the Pirate Market and the Rationalizing Market are all thrown together into one mix - when you actually *need* to distinguish the two, because the Pirate market, however much worse it may *look* is actually not the market you care about because they aren't actually costing you a darn thing. However by lumping these two markets together, you are driving the people you *can* get money from away from you.
So - Ignore the 'pirates'. Sure it's not fair - the law, and 90% of the ethics are on the side of the producers, but at the end of the day, would you rather be right and broke or compromise your principles, admit there *is* a difference, and make more money?