<i>Call me crazy, but I think that the normal and correct way for transactions to occur in a modern, civilized, capitalist economy calls for the producer of the good to set the price -- without fear that his product can be appropriated unlawfully.</i><p>My main problem with this ideal (and I suspect one of the key things that needs to be addressed for the digital economy overall to flourish) is "<i>the</i> price".  It's all well and good to set a single price for <i>physical</i> goods, where marginal costs are nonzero, but the fact is, it costs nothing to distribute one more copy of a digital good, so any time a consumer is willing to pay even a single penny for a song/album/movie/etc. but can't do so because the producer's price is too high, the producer loses.<p>I don't have anything useful to say on the morality of any of this, because piracy is not going away no matter what anyone does - it's clearly "wrong", but the important question is what we should do about it, and I have yet to see any practical solutions other than accepting it as a cost of business and trying to maximize revenues anyways.  DRM schemes are fine in theory, and I'd have no problem if a good one came around, but in practice they have all really sucked because they punish legit consumers with all sorts of annoyances, and they <i>still</i> end up getting cracked, so pirates continue to pirate.  DRM is by definition an impossible technical problem to solve, so we can't expect it to be a silver bullet.<p>I've yet to see any mass exodus from any of the artistic fields that are affected by piracy, so can't believe that it's is killing anything, or that it will in the future.  If I had to guess, more than anything else it's increasing the number of people that obtain a product, most of whom would never have bothered to buy it in the first place.  At worst it's a few percentage point hit to the industries, but IMO those percentage points could be more than reclaimed by adopting a more creative pricing structure (I realize this is not something an individual artist could do, as it would require a lot of data to predict what someone would be willing to pay).<p>Beyond any of this, I don't think the small guys are hurting at all due to piracy, as they never had any sales to speak of to begin with.  Taking music as an example (I've both been a musician and worked at a record company), before the Internet, things looked almost exactly as they did now: big musicians made a lot of money off of albums and selling their fame in other ways, whereas small musicians had trouble making rent and made most of their money from gigs and lessons.  The only difference these days is that small musicians can actually sell a little bit of their music on the net to people that aren't physically at their shows - back when I was playing, a band without a major record deal was lucky if it sold any CDs at all, and worse, they had to pay for large numbers of them to get pressed up front.  I knew very few, if any, unsigned artists that were able to recoup even the <i>physical</i> production costs of their CDs pre-2000, so I'd say things are slightly better for the small guy now, if anything.