Let us carefully distinguish between two meanings of the word "pirate," something the RIAA and MPAA do not do, to the detriment of their respective credibility. There is file sharing a la Kazaa where nothing physical is created or transacted - this is technically illegal but is clearly different from, say shoplifting, because it doesn't cost the copyright holder anything to have the file copied. Unlike a store owner, who has paid an actual price for the product in their store, and paid to store and display it, and who cannot sell stock he doesn't have, when a file is copied the "stock" - the file - is in no way depleted.

While the entertainment industry claims that file sharing is taking money from their hands when customers get their product for "free" via file sharing rahter than buy it in the store or from one of their licensed digital content services. But even this is hotly disputed by those who claim studies show that sales may actually be INCREASED by file sharing, which they say functions as promotion. In other words, it might not even be a real problem, and may not be doing artists any real damage at all.

The other kind of "pirate" physically copies a copyrighted work in bulk and sells it for profit. This is a real problem, is clearly illegal and immoral, and does cost the copyright holders, artists and legitimate retailers real money. I have no problem with these kinds of pirates being presecuted to the fullest extent of the law (although even this is distinguishable from the "mix tape" phenomenon discussed elsewhere in Blogcritics).

This is a huge problem in many developing countries - Peru has a music CD piracy rate of 98%:

Peru's state property rights agency on Tuesday crushed 50,000 pirated music CDs with a steamroller on a Lima street as part of a plan to deter a rampant trade in counterfeit goods.

Musicians and singers danced atop the pile of thousands of compact discs protesting pirating that the government says inhibits artistic creativity and starves a cash-strapped state of needed taxes.

"We need to eliminate (piracy) immediately ... We are calling on everyone to come out and help us crush counterfeit goods," Martin Moscoso, director for intellectual property rights of state agency INDECOPI, told Canal N cable television.

....Moscoso told Reuters that the steamrolling operation, which also destroyed pirated videos and chewing gum, prevented losses of $750,000 for the music industry.

He added that enthusiasm for pirated goods is a major problem for poor Peru, robbing the government of $14 million a year in uncollected taxes in fake CDs alone.

Other pirated goods available across Peru — where many people cannot afford original goods — include namebrand clothes, books, software, food and movies yet to hit cinemas. [Reuters]