Does piracy hurt the economy

Piracy does hurt a specific, smaller portion of the economy. Piracy not only affects certain industries and companies, but also has a second and third order of effects that people may not think about. Take DVDs for example. When someone decides to copy and sell these at a lower price, they are taking revenue away from not just the big name people and companies, but also hurting those in distribution such as truck drivers and those that pack the DVDs into the cases. "Given the high fixed cost of producing a quality movie, losses from piracy can be the difference between making a profit or not." (Granados, 2015) Orders for items will drop as fewer people buy the original DVDs and start buying the knockoff. This means fewer shipments and a drop in income for not just the high up people but the lower echelon of people. The people at the bottom of an industry affected by piracy will feel the impact more so than those up high. "Lower residuals also hurt the pension, welfare, and benefits of hundreds of workers behind the scenes." (Granados, 2015) Some argue that there is a redistribution of wealth through piracy. This "redistribution of wealth" is taking much needed money from those at the bottom of an industry and giving it to criminals.

Another way piracy impacts the economy is through taxes. Millions of dollars worth of taxes are lost since those that distribute stolen DVDs or other types of software are not paying taxes on it. "When music is downloaded with no tax charged when it is supposed to be, as dictated by tax laws, that revenue is lost as well. Lost tax revenue reduces funds available by the taxing government to spend." (Gray, 2017) This loss to governments can mean less funds for programs that are needed by its people.

Peer post 2

Piracy does not hurt the economy. It merely hurts individual players and within certain industries. The author articulates a very important point, there is no net negative to the economy, there is merely a different distribution of money than if the non-pirated products were purchased. This reminds me of "The Tale of the Broken Window" by Frederic Bastiat. In it, it looks at a broken window as a positive for the economy, since now the window maker would now have more work. But, then Bastiat argues that this is not a net-gain for the economy, even though the shop-owner put this window money into the economy. (Bastiat, 2-5) The argument is that instead of the window, the shop-owner could have used these funds for other things had the window not broken.