Song and animation by Nina Paley, arranged and recorded by Nik Phelps, this piece presents, in 60 seconds, the sum and substance of the anti-IP "argument". A careful consideration of both songs and bicycles, along with an acceptance of the importance of property rights in general, will reveal the logical fallacies.
Copying is not theft, it is argued, because copying something does not deprive the other person of the thing's use. In other words, IP is allegedly not scarce and not rivalrous. As Paley's lyric goes:
Copying is not theft
Stealing a thing leaves one less left
Copying it makes one thing more; that's what copying's for
Copying is not theft
If I copy yours you have it too, One for me and one for you, That's what copies can do
If I steal your bicycle you have to take the bus, but if I just copy it there's one for each of us!
The obvious question left out of the song is: How did you copy the bicycle? Sure, copying a bicycle doesn't interfere with the rights of another bicycle owner, but does that mean it doesn't harm anybody?
The praxeological problem is a failure to distinguish between consumer goods and capital goods. A bicycle is a consumer good, its value is transportation, or the enjoyment of the wind blowing through your hair. To "copy" a bicycle requires a factory. A factory is a capital good. Bike factories don't just exist. Building a factory requires a great investment of resources, time, labor, risk, etc. Once the factory exists, then bicycles can come off the assembly line fairly cheaply. The value of a bike factory is not transportation, but profit.
So if I "copy" your bicycle, the question remains: Whose productive capacity did I use to make the copy? Did I build my own factory first, or did I sneak into your factory at night when you weren't looking? The point to keep in mind is that a bicycle and a bike factory are 2 different things.
A digital media file is very interesting. Depending on how it is used, it can be either a consumer good or a capital good. When you listen to a song, it is a consumer good, like a bicycle. The value is the entertainment you get. However, when you make a digital copy, it is functioning as a capital good, like a bike factory. Digital song files do not just exist. Rather, the writer/artist of the song made a great investment of resources, time, labor and risk in creating the original song file, which has both consumer value AND capital value.
It is true that making a copy of the file does not interfere with anyone else's consumer use, but that is irrelevant. Copying a song is NOT like stealing a bike, it is like sneaking into the bike factory and running the assembly line.
Making a copy of a bike does not interfere with the other bicycle owner's use and enjoyment of riding a bike. Does this mean that physical property is not rivalrous? Of course not. Copying a bicycle interferes with the property rights of the bike factory owner, whose use and enjoyment of his property is dependent upon access to a scarce and limited market of customers.
Do you see? Do you see how the comparison between file copying and bike stealing is flawed? A correct analysis must examine, not just the consumer good, but the creation and ownership of productive capacity, i.e. capital goods. Such an analysis shows that IP is rivalrous in exactly the same way as physical property.