CD piracy is rampant, but legal downloading is on the rise

If CD piracy is indeed as rampant as the report claims, that doesn’t necessarily mean that the world is full of immoral music thieves who’re out to destroy the world economy. Rather, it’s an economic truism that a huge and thriving black market is evidence not of widespread consumer “immorality” or ignorance of/disrespect for property rights, but of artificial price inflation in the legitimate market. Furthermore, the size of the black market for any product is a direct indicator of the degree of overpricing in the legit market. In other words, as some force (like, say, the recording industry’s monopoly pricing) distorts prices upwards, people begin to turn in ever larger numbers to the black market for the same goods.