The existence of p2p music trading has made a profound change to the economics of music. Suddenly, what was a tradable commodity, a physical good (albeit only for the hundred years or so since the invention of the phonograph) is now something completely different. Music has become a non-rivalrous good.
A rivalrous good is one that can be "possessed" - if one person has it, another person doesn't. Almost everything we think of when we imagine "goods and services" is rivalrous. Food and shelter (to use an above example) are assuredly rivalrous goods - certainly everyone has a right to eat and sleep, but then, the food you eat is food that I can't.
Music isn't like that anymore. My possession of a piece of music no longer means possession of a CD or other storage medium. I can listen to music freely in the form of mp3s without 'taking' something from someone else.
That's why our vocabulary for discussing music trading is so insufficient. Words like 'thief' don't make sense because one person's downloading of a piece of music doesn't 'take' it away from anyone else. Since many people download many more mp3s than they would ever have purchased without the technology, it's hard to claim that musicians (or anyone else involved in the process) are losing something to which they are otherwise entitled.
The struggling musician
That's not to say that p2p trading is morally acceptable - but it's a difficult question to discuss. Is it killing musicians? No. The "Mitch" in the above examples - small-time musician, struggling to survive - well, the term "starving artist" exists for a reason. The road to success for any artist is difficult, and that was true long before the mp3 revolution began. It's questionable at best whether small musicians are being hurt - indeed, it can be hard to find any music on these peer-to-peer services that's not the work of famous, established, and indeed rich artists. The Mitches of the world who have the wisdom to exploit the medium to its fullest stand to gain a lot more from the increased exposure than they lose from reduced sales.
Most likely, however, mp3 trading hasn't affected Mitch's life one way or the other. Probably relatively few people who have heard of his music have chosen to buy it as a result of mp3 trading. But I suspect a similarly small number have chosen to download his music instead of purchasing it. The people who care about small, struggling musicians enough to listen to their music probably help the musicians by attending concerts and buying albums anyway. Peer-to-peer is only a benefit to small musicians if it increases their exposure.
There is no evidence to suggest that mp3 trading is hurting small or local acts. Indeed, plenty of them seem to be making some sort of profit - albeit a small one - through providing their music freely or for a small fee through services like mp3.com. The idea of the poor starving musician whose livelihood depends on you not 'stealing' their music - an idea created and spread by the RIAA - probably doesn't exist at all. There's certainly no evidence for it, anyway.
The idea of 'theft'
If we're discussing the 'stealing' of music, we have to establish what's being stolen. Music, as I pointed out above, has become a non-rivalrous good. One person's possession of the latest hit single or some obscure garage-band's magnum opus no longer affects anyone else's possession of the item. 'Theft' means taking something else - depriving them of what is theirs. I'm certainly not depriving someone else of the ability to listen to a song by downloading it. Am I depriving them of money that they deserve? That's debatable.
A better comparison is to someone who doesn't pay taxes. Once again, it's the case of someone not making their individual contribution to a larger fund that they benefit from. Just as someone who cheats the IRS can't be stopped from receiving police protection, or national defense, it's no longer possible to stop someone who doesn't pay for music from receiving it.
That's not to say that information wants to be free. That attitude is not a postive one for those of us who like good music and want to see it continue. Nor is it a meaningful statement; it's nothing more than a meaningless rationalization of someone's actions. Not paying your taxes and not paying for your music are both harmful in the end.
The economics of it
Goods are either rivalrous or non-rivalrous, and excludable or non-excludable. Rivalrous goods are ones in which a person's ownership prevents another person from owning it. Most goods and services are rivalrous. Excludable goods are those in which it's possible to prevent people who didn't pay for them from receiving them. Thus, physical goods and services are usually rivalrous and excludable. Back when music was inseparable from its physical medium, it was too.
Now music is non-rivalrous and non-excludable. There's nothing to say that I can't listen to an album, at will, without paying. And when I do so, I'm not depriving anyone else of the ability to do so. Very few businesses want to produce goods like these, because if someone can receive something without paying for it, they have very little incentive to do so. Depending on people do do the right thing is rarely profitable.
Problem is, some very important goods are both non-rivalrous and non-excludable. Clean air, national defense, fire protection, et cetera. It's not feasible to allow a foreign power to conquer some houses and not others. The examples given are public goods, and they're produced by governments in exchange for taxes. Only the government has the power to compel payment in this form.
That's what is unprecedented about the economic situation. There are few comparable examples of a private organization, without government sponsorship and support, attempting to provide something that they can't make people pay for. Imagine a company trying to sell national defense or clean beaches - a ridiculous, impossible task. People have little reason to pay for a good that they can receive for free.
The effect of downloading a song
Last week, I downloaded Madonna's new single, Die Another Day. I used KaZaa (no, I haven't gotten around to getting KaZaaLite.) It's catchy. But, if I hadn't downloaded it, I wouldn't have purchased it. I have no plans to see the movie - but it's not as though I would have attended just to hear the song. I don't even listen to the radio (except for NPR) - but the situation was the same before Napster.
So in this case - in which there is no chance of me paying for a good either way - is it wrong to download it? Well, economically speaking, it's a Pareto-optimal decision: no one was hurt, and one person - me - benefited. Pareto-optimal decisions are easy - an economist would have advised me to download the song.
The only way someone is being harmed per se is if the trading takes the place of the actual purchasing of music. I myself haven't stopped buying CDs because I can download mp3s instead. In fact, since the days of Napster, virtually every artist I've become acquainted with has been the result of music trading. I buy more music as a result of mp3 trading than I would otherwise.
The problem for the labels
So why are the labels concerned - if I buy more music as a result of mp3 trading, isn't that a good thing for everyone involved? Possibly not. You see, while I buy more music, my music choices have changed. I'm able to do the work to discover music that I've never heard of before. Things my friends don't listen to, and that I haven't heard on the radio.
That's the problem. My musical tastes have expanded. I can't interest myself in the radio. I'm not interested in the videos on MTV. I now have a CD collection much more compelling than any of the broadcast services that the labels own. mp3s enable people to find out about things that they never would otherwise, and this is not advantageous for either the labels or the marginally-talented artists who lead to most of their profit.
mp3 trading reduces the RIAA's stranglehold on the music business. Remember that the RIAA makes a lot more money than most of the artists it claims to represent. The labels that the group comprises have a real reason to fear the distribution of music through other routes - they won't be able to control the entire music industry anymore. Consider the source and you'll see that a lot of this is pure, baseless propaganda.
I suspect that the labels' real problem may be that a public who has tastes far broader than what exists on most radio stations will be less satisfied with the manufactured trends they use to sell records. That's not to say that the Britney Spearses of the world will no longer be successful - but will there be any single artist with the same ubiquity and money-making potential when everyone has access to music their local record stores wouldn't dream of stocking?
In summary
'Theft' is a woefully inadequate term for the situation of music trading, as are most terms, because the economics of it are different from just about anything else - and it's too early to say what the final effects will be. But the industry will change greatly as a result. There is really no way around that.
mp3s have made it easy to become familiar with a great deal of music. It no longer takes an enormous amount of effort to familiarize oneself with a wide variety of music. There is a potential for the average person to cultivate their musical taste in a way that only a few people cared to do before the advent of p2p.
It's hard to say the effects on the artists. No one can claim that artists are necessarily being hurt by this; as yet there is no evidence that musicians are, collectively, receiving more harm than benefit from it. What about the labels? Because, whether or not we like them, it's not morally right to 'steal' from them either. Well, that's hard to say as well - but the evidence would suggest that they are going to have to change their methods greatly. It's hard to say what the role of the labels will be in the future. Even if the record companies have hurt musicians with onerous contracts, and left good acts to languish, they have also financed the costs of many, many up-and-coming musicians.
The industry is about to change a great deal, in a way that is impossible to predict. I imagine we won't find answers for the moral dilemmas involved until the situation has unfolded a lot more. But is it immoral to download music? Downloading music is not 'stealing' it in the sense that anything else is stolen. Personally, I'd say that my downloading of music has not only benefited me, but also benefited a number of musicians whom I would probably never have heard of - and bought albums from - without p2p.
Make no mistake about it: information doesn't want to be free. The public doesn't have a divine right to hear music for free. But it's happening anyway, and what we're witnessing now is the beginning of an enormous change. I used the term 'mp3 revolution' above. p2p is going to lead to an enormous amount of change in the music business. We have a while before we'll know what's going to happen as a result of peer-to-peer music trading. The economics of music is changing, though, and any kind of judgments, moral or practical, are questionable until we can say with more certainty who is hurt and who benefits from this change.
Excalibre has since, ironically, purchased the CD single in question. Apparently MP3 trading doesn't stop her from purchasing music.
She purchased it along with 16 other CDs. Now she has no cash whatsoever. Dammit!