I've been talking for a long time about the fact that piracy is an indication of market inefficiencies. The music industry was so out of step with the world when people began fil-sharing with peer to peer software. The fact was that the disappearance of the single and being forced to overpay for entire cd's when most people only wanted a few tracks on the release was ridiculous in the digital age. The industry response was to sue kids. It took a computer guy, Steve Jobs to show them that they needed to "compete" with piracy, make it easier to buy than to steal.
A new book covers this subject in detail, The Pirate's Dilema by The Pirate's Dilemma: How Youth Culture Is Reinventing Capitalism by Matt Mason.
Another fascinating case study he talks about is the pharmaceutical industry. In India, where most people cannot afford to pay for western drugs, the government decided to ignore IP law and let people knock off drugs. There wasn't a value loss to large pharma companies because they're wasn't a viable market for their products there. However, the impact on life expectancy of this policy decision was dramatic.
I actualy came across Matt VIA my new favorite podcast THINK with Krys Boyd. (Krys, you fuckin rock!)You can listen to Krys's interview with Matt Mason HERE (iTunes link)
This is a SlideShare piece MAtt created to talk about some of his ideas.
Another piece, along a similar lines that I have listened to many many times is Larry Lessig for the TED conference. This is a MUST VIEW.