Why Software Piracy Isn't Theft

In an earlier article of mine on the dependance of Windows on Piracy, I promised a discussion on whether or not software piracy should be considered as theft. Well, here we are, and I would like to demonstrate how piracy is not theft.

To start of with, let us define theft. The commonly accepted definition is “the taking of someone else’s property without their consent“. The two keywords that need to be looked at here are “taking” and “consent”. I am going to demonstrate in various different ways why software piracy does not come into the same category as theft. My first argument is with the word “take”.

First of all, the word “taken,” as it was originally used, was meant to imply that what you take is no longer there with the owner. In fact, the root of the word piracy itself betrays what it is supposed to mean. Pirates stormed ships forcibly, looted the occupants (not to mention murdered and God knows what else), and took away things that left the original owners without them.

This clearly doesn’t apply to piracy of music CD’s and software. If I download a song from a server, then the original copy is intact and nothing has been lost. To put a different spin on it, if I light a candle, and you (without my consent) light another candle from my flame and run away, can I charge you with having stolen my light? Is that piracy? I don’t think so.

Of course, all software companies and music companies have the right to make it as difficult as possible for people to copy and run their software. Which brings me to my second point as to why I don’t consider piracy as theft.

Piracy

Image Credit: decoder72

I quite understand the meaning of the term opportunity cost. The primary gripe with piracy is that it causes lost sales. This assumption is dubious at best or remarkably overstated. For this argument to ring true, the assumption must be made that if a user illegaly downloads a song, he or she would have purchased it. If the user never intended to purchase the song, then downloading the song illegally has not caused any sort of lost sales.

In fact, this is much more often true than not. The overwhelming majority of people who illegally download software would never have bought it if they were unable to get if for free. So this argument falls flat.

My final argument is an extension of my earlier article on how to charge different prices for your products. Companies usually adopt pricing policies that confer an additional benefit to those who pay high prices. For example, business class passengers in airplanes have shorter lines. Conversely, they make it difficult for customers who are price sensitive and want to save money to ensure that only those who are willing to make some sort of a sacrifice can get the lower priced products. The example is that of discount coupons which force customers to go through all the hassle of cutting out and saving useless bits of paper in order to get a discount.

Piracy can be looked at in this light. It is never easy to download something illegally. You have to find a source, try and crack it, are in constant fear that updates will change something and render the software useless, etc. This is the reason why people pay money for software. They do it to avoid hassles. The very fact that people choose to buy software instead of trying to get it for free demonstrates this. The end result is this: People who would never have bought the software anyway are the ones who usually try and download music and software illegally. The others buy it to avoid the hassles of using non-genuine software.

The fact that people are still buying music and paying for software illustrates this principle. They pay for software even though they can get it for free. As long as companies make it as difficult as possible for their software to be copied illegally (it doesn’t have to be impossible), they will not lose sales since those to whom the software is worth the price will purchase it.

A lot of people of course, have different points of view on this, believe that you should go to an online store and purchase software, and they are most welcome to share with our readers why they feel that piracy is theft or provide further reasons as to why it is not.

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Wall Street Bailout: The World’s Largest Sovereign Wealth Fund?

More than 20 countries have set up sovereign wealth funds while a dozen more have expressed interest in establishing them. Many of these sovereign wealth funds are picking up stakes in U.S. companies, which is raising concerns about the need for regulating them. Up until the $700 billion bailout, which effectively is a U.S. Treasury-directed fund, the United States did not have a sovereign wealth fund.

This fund is the world’s largest, beating the $600 billion sovereign wealth fund of the oil-rich emirate of Abu Dhabi in the United Arab Emirates.

The fund has many characteristics of sovereign wealth funds. It endorses the latest trend – the most powerful financial entities are not risk-happy investment banks but state-sponsored investment entities that are more cautious.

So far, the United States government has stayed away from investing in the markets. The fund presumes that the government must play a crucial role in deciding how best to deploy a nation’s investment capital.

Critics have long argued that sovereign funds be allowed the privilege of holding positions in public companies when the U.S. government did not do so. When the fund was approved by Congress, it took the sting out of this argument. But there is a difference between this fund and sovereign wealth funds. Sovereign wealth funds invest surplus funds, and in many cases they are doing so abroad for the purpose of financial diversification. The money for this fund has to be borrowed by the Treasury: $700 billion. It will only be investing in the United States. It will make no investments abroad.

The mandate to the fund is clear - avoid further financial collapse by extending a lifeline to U.S. institutions hobbled by their exposure to toxic mortgage assets. This is similar to the goal of sovereign wealth funds – advancing national economic goals. The only difference is that sovereign wealth funds openly state that their goals are political. This fund on the other hand seeks the best prices for the assets it buys.

There are some who feel that the fund does not resemble a sovereign wealth fund, but some sovereign wealth funds are beginning to look like the fund. The present credit crisis is not restricted to the U.S. alone. It is having a worldwide impact. There is tremendous pressure of many of the sovereign wealth funds to come to the rescue of home markets that have wobbled in recent months.

The U.S. Treasury fund’s mandate will run out after two years. But the government might have other ideas if, at the end of two years, it has more than $1 trillion in assets - it has the benefit of starting to buy at what may well be the rock bottom. It could become a permanent fund, and its mandate could be broadened to allow it to invest abroad. It would then become a full-fledged sovereign wealth fund.